Gikandi v Wamalwa & 2 others (Commercial Case E943 of 2025) [2026] KEHC 12480 (KLR) (Commercial and Tax) (30 July 2026) (Ruling)

 **REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **MILIMANI HIGH COURT** **COMMERCIAL & TAX DIVISION** **CASE NO. HCCOMMMISC/E943/2025** **SAMUEL GIKANDI..............................................................APPLICANT/RESPONDENT** **-VERSUS-** **PAUL WAMALWA.............................................................................1ST RESPONDENT INTERNATIONAL FINANCE** **CORPORATION..........................................................2ND RESPONDENT/APPLICANT** **ORANGE DIGITAL VENTURES US LLC.........................................3RD RESPONDENT** **RULING** **INTRODUCTION AND BACKGROUND** 1. This Ruling relates to the 2nd Respondent/Applicant's (International Finance Corporation) Notice of Motion dated 7th November 2025 brought under Article 159 of the Constitution of Kenya, 2010, Sections 2 and 6 of The Arbitration Act, the Arbitration Rules, 1997, Sections 1A, 1B and 3A of the Civil Procedure Act, Order 51 Rule 1 of the Civil Procedure Rules, and all other and further enabling powers and provisions of the law. 2. The Application sought the following orders: - 3. *Spent* 4. *Spent* 5. *THAT this Honourable Court be pleased to strike out the Miscellaneous Application herein for having been brought improperly and for being fatally defective or, in the alternative to this prayer 3:* 6. *THAT this Honourable Court be pleased to refer the dispute herein for resolution in strict compliance with the dispute resolution mechanisms set out under Paragraph 80 of the Articles of Association and Clause 32 of the Shareholders Agreement dated 25th April 2018.* 7. *THAT this Honourable Court be pleased to stay any/all proceedings in this suit pending the exhaustion of all the dispute resolution mechanisms available to the parties under Paragraph 80 of the Articles of Association and Clause 32 of the Shareholders Agreement dated 25th April 2018.* 8. For the avoidance of doubt, the present Application is brought in explicit opposition to the baseline Notice of Motion application filed by the Applicant/ Respondent (Samuel Gikandi) on 19th September 2025. 9. In that underlying application, the Originating Applicant sought compelling orders to forcefully convene, hold, and conduct a meeting of the Board of Directors of Africastalking (K) Limited to address operational deadlocks, legal representation, and dynamic quorum hitches caused by an alleged failure of the Series A Shareholders to maintain board representation. 10. Upon the presentation of the 2nd Respondent/Applicant's challenge, this Court issued interim orders on prayer 2 directing “*Accordingly, all proceedings in this matter are hereby stayed pending the hearing and determination of the present application, which shall take precedence over any other applications filed in this suit.”* 11. The present application is supported by the Supporting Affidavit of Elom Lassey sworn on 7th November 2025 and is premised on the grounds that the Miscellaneous Application herein has been initiated by way of a Notice of Motion Application, without being anchored on any suit. 12. The Applicant contends that a Notice of Motion is not one of the legally recognized methods of originating process before the Courts of Kenya, and that the manner of initiating a suit cannot be termed as a mere case of technicality as it forms the basis of jurisdiction. 13. Without prejudice to the foregoing, the Applicant avers that the Parties herein have irrevocably and unconditionally agreed, pursuant to Paragraph 80 of the Articles of Association, as well as Clause 32 of the Shareholders Agreement dated 25th April 2018, to have any dispute touching on the affairs of the Company submitted to and resolved through the Rules of Arbitration of the International Chamber of Commerce. 14. The 2nd Respondent/Applicant further states that noting that English law, and NOT Kenyan law, applies to the said Shareholders Agreement, it would be most appropriate and efficient to have the dispute resolved by Arbitrators who are versed in English law. 15. The Applicant underscores that this Honourable Court is enjoined, by virtue of Article 159 of the Constitution of Kenya, to give effect to Alternative Dispute Resolution Mechanisms, and that the 2nd Respondent/Applicant remains ready and willing to submit to the processes initiated in accordance with the provisions of the Articles of Association and the Shareholders Agreement. 16. The Applicant/Respondent did not file any replying affidavit in the matter. **2ND RESPONDENT’S/APPLICANT’S SUBMISSIONS** 1. The 2nd Respondent/Applicant moves this Honourable Court to dismiss the suit with costs on both a preliminary and substantive basis. As a threshold issue, the Applicant highlights that the Plaintiff completely failed to comply with the court's strict timelines issued by Hon. Justice Visram, neglecting to file any response or Replying Affidavit for more than six months. 2. Consequently, the Application dated 7th November 2025 stands entirely unopposed and should be allowed *in limine*. 3. Substantively, the 2nd Respondent/Applicant submits that the entire suit is fatally and incurably defective because the Plaintiff initiated the proceedings by way of a Notice of Motion. 4. Relying on **Norah Ndunge Henry & another v Abednego Mutisya & another [2022] eKLR, Abdulkarim v Mulla & 3 others [2024] eKLR**, and **Proto Energy Limited v Hashi Energy Limited [2019] eKLR**, the Applicant contends that a Notice of Motion is not a legally recognized mode of originating process and can only be filed within a properly instituted suit. 5. Furthermore, the Applicant relies on the Court of Appeal decisions in **Scope Telemantics International Sales Limited v Stoic Company Limited [2017] eKLR** and **Civicon Limited v Fuji Electric Co Limited & Another [2020] eKLR** to argue that the manner of initiating a suit forms the very basis of jurisdiction. It is a mandatory statutory imperative that cannot be bypassed or treated as a mere procedural technicality under Article 159 of the Constitution. 6. Without prejudice to the foregoing, the 2nd Respondent/Applicant submits that this Court is bereft of jurisdiction because the parties contractually, irrevocably, and unconditionally agreed to resolve all internal disputes touching on the affairs of the Company through the Rules of Arbitration of the International Chamber of Commerce (ICC). 7. The Applicant points out that pursuant to Clause 31 of the Shareholders Agreement, the contract is governed by English law, making a foreign arbitral panel uniquely suited to determine the dispute. 8. Relying on **John Shantilal Malde & 9 others v Transmara Investment Limited & others [2018] eKLR** and **Burn Manufacturing USA LLC v Sage South Africa (PTY) Limited [2020] eKLR**, the Applicant asserts that courts must enforce the clear intentions of contracting parties and cannot allow a litigant to ignore contractually agreed dispute pathways. Since Article 159(2)(c) of the Constitution mandates the promotion of alternative dispute resolution, the dispute must be referred to ICC arbitration. **APPLICANT’S/RESPONDENT’S SUBMISSIONS** 1. The Applicant/Respondent submitted his lengthy submissions, albeit beyond the required length advised by this Court where he opposes the 2nd Respondent’s /Applicant's Notice of Motion dated 7th November 2025 in its entirety. The application seeks to stay the proceedings and refer the dispute to arbitration pursuant to section 6 of the Arbitration Act on the basis of the arbitration clause contained in the Shareholders' Agreement dated 25th April 2018. 1. The Applicant/Respondent submits that the present proceedings do not concern the enforcement of private contractual rights under the Shareholders' Agreement but rather seek urgent judicial intervention to preserve the governance of a Kenyan incorporated company, prevent continuing corporate paralysis, and ensure compliance with the Companies Act, 2015. 2. Consequently, the dispute falls within the supervisory jurisdiction of the High Court and is not one that ought to be referred to arbitration. 3. The Applicant/Respondent argues that the proceedings are properly before the Court notwithstanding that they were commenced by way of a Miscellaneous Application. 4. It is submitted that jurisdiction is derived from the Constitution and statute rather than the procedural form adopted by a litigant. Reliance is placed on Article 159(2)(d) of the Constitution, sections 1A and 1B of the Civil Procedure Act and authorities including **Microsoft Corporation v Mitsumi Computer Garage Ltd, D.T. Dobie & Company (Kenya) Ltd v Muchina** and **Nicholas Kiptoo Arap Korir Salat v IEBC & 7 Others** for the proposition that procedural technicalities should not override substantive justice. 5. On arbitrability, the Applicant/Respondent submits that section 6 of the Arbitration Act does not require an automatic stay merely because an arbitration agreement exists. Rather, the Court must first determine whether the dispute before it falls within the scope of the arbitration agreement. 6. The Respondent contends that the relief sought is statutory and protective in nature, intended to restore lawful corporate governance and ensure compliance with mandatory obligations under the Companies Act, 2015, as opposed to enforcing contractual rights under the Shareholders' Agreement. Accordingly, the dispute is not arbitrable. 7. The Applicant/Respondent further argues that the governing law clause designating English law does not oust the supervisory jurisdiction of Kenyan courts over companies incorporated in Kenya. It is submitted that while parties may choose the law governing their contractual relations, they cannot by private agreement exclude the application of Kenyan company law or the supervisory jurisdiction conferred upon the High Court by statute. 8. The Respondent cites **Salomon v Salomon & Co Ltd, Victor Mabachi & Another v Nurtun Bates Ltd, Dina Management Ltd v County Government of Mombasa, Prest v Petrodel Resources Ltd, Howard Smith Ltd v Ampol Petroleum Ltd** and **Fulham Football Club (1987) Ltd v Richards** in support of this position. 9. The Applicant/Respondent also contends that, even assuming the dispute were arbitrable, the 2nd Respondent/Applicant has failed to satisfy the statutory requirements for stay under section 6 of the Arbitration Act. 10. It is argued that the 2nd Respondent/Applicant has not demonstrated readiness and willingness to arbitrate, having taken no steps for over three and a half years to invoke the dispute resolution mechanism under the Shareholders' Agreement. 11. The Applicant/Respondent submits that no Notice of Dispute, negotiations or arbitral proceedings were commenced prior to filing the application, demonstrating that the application is merely a tactical attempt to delay the proceedings rather than a genuine effort to pursue arbitration. Reliance is placed on **Corporate Insurance Co. Ltd v Wachira, UAP Provincial Insurance Co. Ltd v Michael John Beckett and Lofty v Bedouin Enterprises Ltd.** 12. The Applicant/Respondent therefore urges the Court to dismiss the 2nd Respondent/Applicant’s Notice of Motion with costs and allow the Court to continue exercising its supervisory jurisdiction over the governance of the company. **ISSUES FOR DETERMINATION** 1. The issues for determination are: 2. ***Whether the Miscellaneous Application was improperly instituted by way of a Notice of Motion and is therefore fatally defective*** 3. ***Whether, in light of the arbitration agreement between the parties, this Court ought to decline jurisdiction and stay the proceedings pending arbitration.*** **ANALYSIS AND DETERMINATION** 1. On the first issue of whether the Miscellaneous Application was improperly instituted, this Court is tasked with determining whether the Notice of Motion constitutes a competent mode of commencing proceedings under Kenyan law or whether the application is incurably defective. 2. The 2nd Respondent/Applicant maintains that the present proceedings were improperly instituted, contending that the Notice of Motion filed under a Miscellaneous Application is not a competent mode of commencing substantive proceedings. 3. Conversely, the Applicant argues that the application is properly before the Court under the Companies Act, 2015 and that the procedural objection raised ought not to defeat the substantive determination of the dispute. 4. The Court has carefully considered the rival submissions, the authorities cited by the parties, and the applicable law. 5. It is necessary, at the outset, to establish what constitutes a "suit" for purposes of determining the competence of the present proceedings. Black's Law Dictionary defines a *suit* as any proceeding by a party or parties against another in a court of law. 6. Similarly, Section 2 of the Civil Procedure Act defines a *suit* as *all civil proceedings commenced in any manner prescribed*, while the term *"prescribed"* is defined to mean prescribed by rules. 7. The institution of civil proceedings is therefore governed by the Civil Procedure Act and the Civil Procedure Rules. Section 19 of the Civil Procedure Act provides that every suit shall be instituted in such manner as may be prescribed by the Rules. 8. The court in **Joseph Kibowen Chemjor v William C. Kisera [2013] eKLR**, observed: ***“it is always advisable for a claimant to commence action by way of plaint unless there is an alternative provided by statute or the rules thereunder…”*** 1. **In Norah Ndunge Henry & another v Abednego Mutisya & another [2022] KEELC 382 (KLR),** the court expressed itself as follows; ***‘as a general rule, a suit can only be instituted by way of a plaint, petition or an originating summons. A notice of motion is not legally recognised as an originating process. A notice of motion can only be within a properly instituted suit.’*** 1. The import of the foregoing decision is that while the Civil Procedure Rules provide the general framework for instituting civil proceedings, Parliament may enact legislation prescribing a different procedure for commencing proceedings under a particular statute. 2. The Court must therefore examine whether the provisions of the Companies Act, 2015 relied upon by the Applicant prescribe a procedure different from that contemplated under the Civil Procedure Rules. 3. The Applicant has, inter alia, invoked Section 280 of the Companies Act, 2015, which confers jurisdiction upon the Court to order that a meeting be convened where it is impracticable to do so in accordance with the Act or the company's constitution. 4. The provision, however, does not prescribe the procedure by which such jurisdiction is to be invoked. Nor do the Companies Act or the Companies (General) Regulations provide a special mode of commencement for such applications. The Court must therefore determine the proper procedural vehicle by reference to the applicable procedural law. 5. In those circumstances, the applicable procedure is that prescribed under the Civil Procedure Rules. Order 3 Rule 1 of the Civil Procedure Rules provides that every suit shall be instituted by presenting a plaint or in such other manner as may be prescribed. 6. The phrase *"or in such other manner as may be prescribed"* contemplates a mode of commencement expressly authorized either by the Civil Procedure Rules or another written law. In the present case, neither section 280 of the Companies Act nor any other provision cited by the Applicant prescribes commencement of proceedings by way of a standalone Notice of Motion or Miscellaneous Application. 7. The Court is persuaded by the reasoning in **Proto Energy Limited v Hashi Energy Limited [2019] KEHC 12311 (KLR)**, where it was held: ***"As a general rule a suit can only be instituted by way of a Plaint, Petition or an Originating Summons. A Notice of Motion is not legally recognized as an originating process. A Notice of Motion can only be filed within a properly instituted suit."*** 1. The foregoing principle has consistently been affirmed by the courts. In **Abdulkarim v Mulla & 3 Others [2024] eKLR**, the Court reiterated that where no statutory procedure authorizes commencement by Notice of Motion, proceedings initiated in that manner are incompetent. 2. The Applicant has urged this Court to invoke Article 159(2)(d) of the Constitution together with sections 1A, 1B and 3A of the Civil Procedure Act. While this Court is alive to the constitutional imperative that justice be administered without undue regard to procedural technicalities, it is equally settled that Article 159(2)(d) was never intended to abrogate mandatory procedural requirements governing the institution of proceedings. 3. Likewise, the inherent jurisdiction preserved under section 3A of the Civil Procedure Act exists to aid the administration of justice in properly instituted proceedings and cannot be invoked to circumvent express provisions of the law. 4. The Supreme Court in **Nicholas Kiptoo Arap Korir Salat v IEBC & 7 Others [2014] eKLR** cautioned that Article 159 is not a panacea for all procedural deficiencies. The same position was reiterated in **Samuel Chege Thiari & Another v Eddah Wanjiru Wangari & 3 Others [2018] eKLR**, where the Court held: ***"Failure by the applicant to file proper pleadings renders the Notice of Motion incompetent and therefore a nullity and it cannot be saved by Article 159 of the Constitution or Section 3A..."*** 1. Similarly, in **Salim Tunje Gambo v Commissioner of Lands & 9 Others [2001] eKLR**, Waki J. observed: ***"Section 3A of the Civil Procedure Act is not a panacea for all wrongs. The inherent powers of the court ought not to be used indiscriminately when there are specific provisions of the law which can be invoked."*** 1. Having considered the applicable statutory framework and the authorities cited, this Court is satisfied that although section 280 of the Companies Act creates a substantive right to seek the Court's intervention, it does not prescribe a special mode of commencing proceedings so as to displace the ordinary procedure under the Civil Procedure Act and the Civil Procedure Rules. 2. The Applicant was therefore required to institute the present proceedings in the manner prescribed by law. By commencing the matter through a standalone Notice of Motion in a Miscellaneous Application seeking substantive reliefs, the Applicant adopted a procedure that is not sanctioned either by the Companies Act or the Civil Procedure Rules. 3. Accordingly, this Court finds that the present Miscellaneous Application was improperly instituted and is therefore incompetent. The defect goes to the very mode by which the proceedings were commenced and is not a mere procedural irregularity capable of being cured under Article 159(2)(d) of the Constitution or the Court's inherent jurisdiction under section 3A of the Civil Procedure Act. The objection on this ground consequently succeeds. 4. On the second issue, the 2nd Respondent contends that the present dispute falls squarely within the arbitration agreement contained in Paragraph 80 of the Company's Articles of Association and Clause 32 of the Shareholders' Agreement dated 25th April 2018. It therefore urges the Court to decline jurisdiction and refer the parties to arbitration in accordance with section 6 of the Arbitration Act. 5. The Applicant, on the other hand, maintains that the dispute concerns statutory issues of corporate governance under the Companies Act, 2015, which fall within the supervisory jurisdiction of this Court and are therefore not amenable to arbitration. 6. The Court has considered the rival arguments and the applicable law. The starting point is Section 6(1) of the Arbitration Act, which provides that where proceedings are brought before a court in a matter that is the subject of an arbitration agreement, the Court shall, upon application by a party made not later than the time of entering appearance or otherwise acknowledging the claim, stay the proceedings and refer the parties to arbitration unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed, or that there is in fact no dispute between the parties concerning the matters agreed to be referred to arbitration. 7. The provision gives effect to the fundamental principle of party autonomy, which recognizes that parties are bound by the dispute resolution mechanism they have voluntarily chosen. Consequently, where parties have agreed to submit disputes to arbitration, the role of the Court is not to determine the merits of the dispute but to give effect to that agreement unless one of the statutory exceptions under section 6 is established. 8. The Court of Appeal has consistently affirmed this principle. In **UAP Provincial Insurance Co. Ltd v Michael John Beckett [2013] eKLR**, the Court stated: - ***"It is clear from this provision that the enquiry that the court undertakes and is required to undertake under section 6(1)(b) of the Arbitration Act is to ascertain whether there is a dispute between the parties and if so, whether such dispute is with regard to matters agreed to be referred to arbitration. In other words, if as a result of that enquiry the court comes to the conclusion that there is indeed a dispute and that such dispute is one that is within the scope of the arbitration agreement, then the court refers the dispute to arbitration as the agreed forum for resolution of that dispute. If on the other hand the court comes to the conclusion that the dispute is not within the scope of the arbitration agreement, then the correct forum for resolution of the dispute is the court."*** 1. In the present case, there is no dispute that both the Articles of Association and the Shareholders' Agreement contain arbitration clauses requiring disputes concerning the affairs of the Company to be referred to arbitration under the Rules of Arbitration of the International Chamber of Commerce (ICC). 2. Equally, Clause 31 of the Shareholders' Agreement provides that the agreement shall be governed by English law. I am unable to agree that the governing law clause is determinative of the present objection. 3. A distinction must be drawn between the law governing the substantive rights and obligations arising under the contract and the procedural law governing the Court's jurisdiction when proceedings are instituted before it. The governing law clause determines the substantive law applicable to the Shareholders' Agreement but does not, of itself, displace the jurisdiction conferred upon this Court by section 6 of the Arbitration Act to determine whether the dispute should be referred to arbitration. 4. The issue before this Court is therefore not which system of law governs the parties' contractual rights, but whether the dispute falls within the scope of a valid arbitration agreement and whether the statutory conditions for referral have been satisfied. It therefore becomes necessary to determine whether the present dispute falls within the arbitration agreement. 5. The Applicant/Respondent has submitted for the Court’s guidance the decision of the English Court of Appeal in **Fulham Football Club (1987) Ltd v Richards [2011] EWCA Civ 855**, where it was held that disputes concerning the internal management of a company are generally capable of resolution through arbitration notwithstanding that they arise within the framework of company law, provided that the relief sought concerns rights exercisable between the parties and does not affect the rights of third parties or involve matters reserved exclusively for judicial determination. I am persuaded by this view. 6. Having considered the pleadings and the reliefs sought, this Court is satisfied that the dispute principally concerns the parties' rights and obligations arising from their contractual arrangements relating to the governance and management of the Company. Those issues fall squarely within the ambit of the arbitration clauses contained in the Articles of Association and the Shareholders' Agreement. 7. The Applicant further contends that the 2nd Respondent delayed in invoking the arbitration agreement and has therefore failed to demonstrate readiness and willingness to arbitrate. The Court is not persuaded by this argument. 8. The 2nd Respondent has raised the arbitration agreement by way of the present application at the earliest available opportunity in these proceedings before taking any substantive step on the merits of the dispute. 9. The Court in **Lofty v Bedouin Enterprises Ltd [2005] eKLR** stated: - ***"On the plain reading of that section, before the court can consider the issues raised in paragraphs (a) and (b) of section 6(1) of the Act, the court has to satisfy itself that the party applying for reference to arbitration has applied to the court 'not later than the time when that party enters appearance or files any pleadings or takes any other step in the proceedings.”*** 1. It is also important to note that Article 159(2)(c) of the Constitution enjoins courts to promote alternative forms of dispute resolution, including arbitration, as a means of facilitating the expeditious and efficient resolution of disputes. 2. In the circumstances of this case, the Court is satisfied that there exists a valid and binding arbitration agreement between the parties; that the dispute falls within the scope of that agreement; and that none of the statutory exceptions under section 6(1) of the Arbitration Act has been established. 3. To assume jurisdiction in the face of the parties' express contractual bargain would be contrary to both the Arbitration Act and the constitutional policy favouring alternative dispute resolution. 4. Accordingly, this Court finds that the dispute ought to be referred to arbitration in accordance with Paragraph 80 of the Articles of Association and Clause 32 of the Shareholders' Agreement. The Court declines to assume jurisdiction over the dispute and directs that the parties pursue the dispute resolution mechanism they voluntarily adopted. **DISPOSITION AND ORDERS** 1. Flowing from the foregoing, I find merit in the 2nd Respondent/Applicant's Notice of Motion dated 7th November 2025. I am satisfied that the Applicant/Respondent’s Miscellaneous Application was improperly instituted through a Notice of Motion dated 19th September 2025 notwithstanding that it seeks substantive reliefs requiring adjudication through a properly instituted suit. In the circumstances, the application is incompetent. 2. Accordingly, I make the following orders: 3. *Prayer 3 of the Notice of Motion dated 7th November 2025 is hereby allowed.* 4. *Having allowed Prayer 3, the alternative prayers 4 and 5 are spent and require no determination.* 5. *Costs are awarded to the 2nd Respondent/Applicant.* **DATED, SIGNED AND DELIVERED AT NAIROBI THIS 30th DAY OF JULY 2026.** **MURUNGA, J** *Delivered on virtual platform in the presence of:* *Omino for the Applicant* *Mafumbo h/b Okullo for the Respondent* *Kevin Babu - Court Assistant*