[2022] KEHC 15361 (KLR)

Ethics & Anti-Corruption Commission v Kanyi Joseph Karanja, Cecilia Faith Mango and Micheal Kioko Maundu t/a Kanyi J & Company Advocates & 9 others (Anti-Corruption and Economic Crimes Civil Suit 16 of 2017) [2022] KEHC 15361 (KLR) (Anti-Corruption and Economic Crimes) (10 November 2022) (Ruling)

Neutral citation: [2022] KEHC 15361 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Anti-Corruption and Economic Crimes

Anti-Corruption and Economic Crimes Civil Suit 16 of 2017

EN Maina, J

November 10, 2022

Between

Ethics & Anti-Corruption Commission

Plaintiff

and

Kanyi Joseph Karanja, Cecilia Faith Mango and Micheal Kioko Maundu t/a Kanyi J & Company Advocates

1st Defendant

Kikambala Development Company Limited

2nd Defendant

Ephraim Maina Rwingo

3rd Defendant

Jane Njeri Karanja

4th Defendant

Seline Consultants Limited

5th Defendant

Fredrick Otieno Asiema

6th Defendant

Joy Kavutsi Asima

7th Defendant

Joan Zawadi Karema

8th Defendant

Juma Renson Thoya

9th Defendant

Harry John Paul Arigi

10th Defendant

Ruling

1. This ruling pertains to two applications. The first is the notice of motion dated May 6, 2022 by which the 1st to 5th defendants seek to stay hearing and determination of this suit pending Mombasa Environment and Land Court (ELC) Case No 128 of 2020.

2. The second is the notice of motion dated June 13, 2022 by which the 7th to 10th defendants seek to have this suit dismissed on account of consents dated November 23, 2018 and March 27, 2018 entered between the plaintiff and the 1st defendant.

3. The gravamen of the 1st to 5th defendants’ application as can be discerned from the grounds on its face, the supporting affidavit and the submissions of their counsel is that this case and the ELC No 128 of 2020 are related in that the gist of both cases is a sale agreement dated December 18, 2014; that the plaintiff herein is a party in both suits and that by a ruling dated April 27, 2022 the ELC Court decided that it was imperative for the rights of the parties in the agreement for sale to be determined before it could deal with any other matter. The 1st to 5th defendants therefore aver that it is in the interest of justice that those rights be determined before the issues arising in this case are determined. It is further contended that the sum of Kshs 70 million which is the subject matter of this case is held in an interest earning account in the joint names of counsel for the plaintiff and the 1st defendant and hence no prejudice shall be occasioned to the plaintiff.

4. On their part the 7th to 10th defendants contend is that the plaintiff and the 1st defendant entered into two written consents dated November 23, 2018 and March 27, 2019 which resulted in the 1st defendant depositing the entire sum of Kshs 70 million in an escrow account opened and controlled by the 1st defendant and counsel for the plaintiff; that however the 1st defendant and the plaintiff have engaged in a standoff regarding the issue of interest and costs, hence delaying the final resolution of this matter; that the 7th to 10th defendants have no other interest other than the return of the sum of Kshs 70 million to the pension fund and they do not understand why they continue to be parties to this suit while the amount claimed is in the actual control of the plaintiff. It is their contention that their right to fair administrative action and the expeditious determination of this suit is being compromised and that this court should bear that in mind when considering the application of the 1st to 5th defendants. They urge this court to dismiss the 1st to 5th defendants’ application but allow their application with costs.

5. In their written submissions the 6th and 11th defendants support the application of the 1st to 5th defendants to stay this suit they are opposed to the 7th to 10th defendants to have the suit dismissed. It is their contention that costs should be awarded to them in any event.

6. The plaintiff/respondent has vehemently opposed both applications through replying affidavits dated June 8, 2022 and June 29, 2022 respectively. The plaintiff/respondent also filed written submissions dated August 15, 2022. In regard to the application of the 1st to 5th defendants the plaintiff/respondent submits that they have not met the threshold for stay of proceedings and has cited the case of Kenya Wildlife Service v James Mutembei [2019] eKLR to support its submission. As for the application of the 7th to 10th defendants the plaintiff submits that the negotiations for an out of court settlement are yet to crystalize because of the insistence of the 1st to 5th defendants that the criminal proceedings against them in the lower court must be terminated before they can release the Kshs 70,000,000/= to the plaintiff. Placing reliance on the case of Yaya Towers Limited v Trade Bank Limited (In liquidation) [2000] eKLR the plaintiff/respondent submits that it has a right to pursue its claim through the court and also that to remove the 7th to 10th defendants from the proceedings would be prejudicial to its case. It is the plaintiff/respondent’s prayer that the applications be dismissed with costs.

7. I have carefully considered the application dated May 6, 2022 and the one dated June 13, 2022, the grounds thereof, the affidavits in support and in reply, the grounds of opposition and the rival submissions of learned counsel for the parties. It is my finding that none of the applications has merit.

8. As correctly submitted by counsel for the plaintiff/respondent whether or not to grant a stay of proceedings is in the discretion of the court. That discretion must however be exercised judicially and within well settled principles and it is trite that stay of proceedings impedes a litigant’s right to conduct its litigation expeditiously and as such it must be exercised sparingly. See the case of Kenya Wildlife Service v James Mutembei [2019] eKLR where the court stated:-“15. ...... Stay of proceedings is a grave judicial action which seriously interferes with the right of a litigant to conduct his litigation. It impinges on right of access to justice, right to be heard without delay and overall, right to fair trial. Therefore, the test for stay of proceedings is high and stringent.”

Similarly in the case of Michael Sistu Mwaura Kamau v Ethics & Anti-Corruption Commission & 3 others[2015] eKLR the Court of Appeal held:-“20. The jurisdiction to stay a proceeding either of civil or criminal nature before any court is always sparingly exercised....”

9. It is my finding that the grounds raised to support the application by the 1st to 5th respondents have no basis. ELC 128 of 2020 is a matter between the 2nd defendant and the Kenya Ports Authority Retirement Benefits Scheme with the plaintiff herein being only an interested party. The suit concerns the interest and rights of the main parties therein and in my view it would not prejudice the parties in this case were the proceedings herein to continue. The issues in dispute in this case while they may be related to those in the ELC Case No 128 of 2020 do not depend on the outcome of the ELC case. The two suits are as distinct as day and night. The plaintiff/respondent like any other kenyan has a right to have the cases it has filed in the courts heard expeditiously as guaranteed in article 159 (b) of the Constitution and sections 1A and 1B of the Civil Procedure Act. In a ruling delivered on July 8, 2022 in this very matter Onyiego J, observed: -“26. The issue of expeditious delivery of justice is a factor to which each party should be willing to participate. If parties enter consent judgment for payment of the principle sum, they can submit on the award of costs and interest which can take a short time and the court shall deliver a ruling.”

I fully agree and associate myself with the above finding.

10. The plaintiff/respondent has pointed out that although the sum of Kshs 70,000,000 which is the subject matter of its claim against the defendants was deposited in an account which is held jointly by itself and counsel for the 1st defendant the latter has made it clear that it cannot and shall not release the money unless and until the criminal proceedings against its client are terminated. In my view the present application by the 1st to 5th defendants is no more than an attempt by them to arm-twist the plaintiff/respondent into submission. That to me is an abuse of the court process which should not be sanctioned by this court. The application is not merited and it is dismissed.

11. As for the application of the 7th to 10th defendants the same is premised on the two consents which culminated in the deposit of the funds in the escrow account. It has become evident that the said deposit did not finally determine the dispute between the parties. The dispute is yet to be resolved. Indeed, it has come to the attention of this court that the 1st to 5th defendants have attached conditions to the release of the funds to the plaintiff/respondent. My reading of the plaint and other material on the court record has disclosed that the 7th to 10th defendants are necessary parties to the case and that striking them out at this stage would gravely prejudice the plaintiff/respondent’s case. Their application ought therefore to be rejected.

12. In the premises the applications are both dismissed and it is directed that this suit shall be heard on its merits. Costs follow the event unless the court rules otherwise and the order that best commends itself to me here is that the costs of both applications be to the plaintiff.Orders accordingly.

DATED, SIGNED AND DELIVERED VIRTUALLY THIS 10TH DAY OF NOVEMBER 2022E N MAINAJUDGE