https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/8297

Grae Investments Ltd v Total Energies Marketing Kenya PLC (Civil Case E018 of 2025) [2026] KEHC 8297 (KLR) (12 June 2026) (Ruling) Neutral citation: [2026] KEHC 8297 (KLR) Republic of Kenya In the High Court at Kisumu Civil Case E018 of 2025 A Mabeya, J June 12, 2026 Between Grae Investments Limited Plaintiff and Total Energies Marketing Kenya PLC Defendant Ruling 1.This ruling is on the Motion dated 27/10/2025. The same was brought under Sections 1A, 1B, 3 & 3A of the Civil Procedure Act, Sections 97, 102, 103 & 104 of the Land Act, Order 40 Rules 1,2 & 3 and Order 51 Rules 1 of the Civil Procedure Rules. 2.The applicant sought to restrain the respondents from in any way interfering with the operation of its petrol station operating as Nairobi Road Total Service or in the alternative, an order allowing it to enter into a supply agreement with any other petroleum company to re-open and operate the station situated on LR No. Kisumu/Nyalunya/4597. 3.The application was based on the grounds set out on the face of the Motion as well as the supporting affidavit of JOHNSON EZEKIEL OKOTH OWINO sworn on the 16/12/2025. He deposed that vide an agreement dated 8/2/2017, the parties herein entered into a Branding and Supply Agreement giving the respondent exclusive fuel supply rights to the applicant’s Nairobi Road Total Service Station situate on LR No. Kisumu/Nyalunya/4597. 4.That sometime in 2023, the applicant found the agreement unsustainable and offered to lease the station to the respondent who declined and countered with a proposal for a full buyout which it rejected, causing the relationship to turn sour and resulting in deliberate fuel delivery delays. 5.That subsequently, on the 1/6/2023, a heavy rainstorm damaged a single iron sheet on the station's canopy and the respondent then halted all fuel supply, demanding repairs and an independent integrity check. That despite the canopy being repaired and an inspection report showing no urgent hazards, the respondent refused to supply fuel for seven months (June – November 2023) whilst withholding Kshs. 6,128,866/- in pre-paid fuel funds thus causing an outstanding debt of Kshs. 22,125,815/- to accumulate. 6.That the branding and supply contract was eventually terminated and a notice to vacate issued to the respondent. However, the respondent refused to de-brand the station thereby preventing the applicant from finding a new supplier whereas the respondent resorted to opening a competing station less than 500 meters away. 7.That on the 6/11/2024, the respondent deployed G4S security guards to the applicant’s property without written consent in an attempt to execute a forceful takeover and subsequently on the 27/9/2024 and 2/10/2024, the respondent’s agents and police visited the station, threatening to forcefully dismantle and remove five fuel dispensing pumps but it resisted claiming it owns the pumps through an unreturned Kshs 7.5 million security deposit. 8.That in December 2025, having received a notice from the Bank of Baroda intending to auction the petrol station due to unpaid construction loans, the applicant instituted the present suit. 9.The application was opposed by a replying affidavit of ARTHUR OMBIMAH sworn on 27/2/2026. He deposed that the applicant had not exhibited a board resolution authorizing the institution of the suit or swearing of affidavits on behalf of the company and consequently, both the application and the suit are incompetent and should be struck out. 10.That the parties entered into a Branding and Supply Agreement on 8/2/2017 and that the agreement did not contain hidden or undisclosed costs reiterating that it was executed after full consideration of its terms. 11.The respondent disputed the applicant’s claim that it wrongfully failed to formalize a lease agreement maintaining that its actions were justified and that relations between the parties remained cordial. That damage to the service station canopy resulted from poor and substandard construction by the applicant and consequently fuel supply was suspended until repairs were undertaken due to safety concerns affecting employees, customers and property. 12.The respondent maintained that all fuel paid for by the applicant was supplied and attributes fuel shortages at the station to the applicant’s failure to make timely and adequate payments. That due to financial difficulties, the applicant proposed selling the fuel dispensing pumps to the respondent and the pumps were purchased for Kshs. 7.5 million, with the proceeds credited to the applicant’s security account. That consequently, upon payment of the purchase price, ownership of the pumps lawfully transferred to it and therefore, the applicant cannot claim continued ownership of the pumps. 13.That the applicant exhausted the Kshs. 7.5 million credit facility and accrued further debt and thus owed Kshs. 16,493,874.72 as at 13/1/2026. That thus the applicant is in admitted and continuing breach of the Branding and Supply Agreement due to unpaid debt as the applicant’s purported termination of the agreement was irregular and intended to avoid its repayment obligations. 14.The respondent deposed that the applicant came to court with “unclean hands” because it is in breach of its contractual obligations and as such does not merit grant of the discretionary equitable orders sought. 15.I have considered the application, the responses and submissions filed in respect thereof. The issues for consideration crystallize into three; firstly, whether the suit and application before this court is valid in the absence of a board resolution authorizing Johnson Ezekiel Okoth Owino to bring the suit/application, secondly, whether the court should grant the injunctive relief sought and thirdly, whether the court ought to issue an order allowing the applicant to enter into a supply agreement with any other petroleum company to re-open and operate the station situated on LR No. Kisumu/Nyalunya/4597. 16.On the first issue, the respondent seeks striking out of the suit. I bear in mind that striking out is a draconian remedy that should only be resorted to in the clearest of cases. I am alive to the wise counsel of Madan JA in D.T. Dobie & Company (Kenya) Limited v Joseph Mbaria Muchina & another [1980] eKLR. 17.In the present case, the reason advanced by the respondent for seeking striking out is that there is noncompliance with mandatory provisions of Order 4 rule 1(4) of the Civil Procedure Rules 2010 to the extent that the deponent of the supporting affidavit verifying the Motion has not exhibited any authority under seal to do so and that the motion/suit is therefore for striking out under Order 4 rule 1 (6). 18.I have perused the Motion and the supporting affidavit sworn by Johnson Ezekiel Okoth Owino. The applicant describes itself as a limited liability company and the deponent as one of its directors. Therefore, the deponent of the supporting affidavit was required to exhibit an authority under seal of the applicant company pursuant to Order 4 rule 1(4). I see no such authority annexed to the supporting affidavit and the deponent does not depose that he obtained an authority under seal. 19.Order 4 rule 1(4) states:“Where the plaintiff is a corporation, the verifying affidavit shall be sworn by an officer of the company duly authorized under the seal of the company to do so.” 20.Order 4 rule 1(6) states:“The court may of its own motion or on the application by the plaintiff or the defendant order to be struck out any plaint or counterclaim which does not comply with sub-rule (2) (3), (4) and (5) of this rule.” 21.Though the portion of the rule requiring filing of an authority under seal is couched in mandatory terms, the portion on consequences of noncompliance is not. The court therefore has discretion on whether or not to order striking out of any pleading that is non-compliant. In exercising that discretion, the court must be alive to its obligations under Article 159 of the Constitution of Kenya, 2010 to see to it that justice is administered without undue regard to procedural technicalities. 22.I do not consider that failure to exhibit an authority under seal should result, in the present dispensation, to striking out of the Motion and suit in the first instance. The Court should give the litigant a chance to comply with the rules. It is only after failure to comply that such drastic consequences as striking out should come into operation. 23.As regards the prayer for injunctive relief, the principles for grant of temporary injunctions were settled in the case of Giella –versus- Cassman Brown and Company Limited (1973) E.A 385. These are that first; an applicant must show a prima facie case with a probability of success. Secondly, that an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury, which would not adequately be compensated by an award of damages. And thirdly, if the court is in doubt, it will decide the application on a balance of convenience. 24.A prima facie case was defined in Mrao Limited –versus- First American Bank of Kenya and 2 Others (2003) KLR 125, to be a case in which, on the material presented to the court, a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter. A prima facie case is more than an arguable case 25.In Nguruman Limited vs. Jan Bonde Nielsen & 2 Others [2014] eKLR, the Court of Appeal held: -“The party on whom the burden of proving a prima facie case lies must show a clear and unmistakable right to be protected which is directly threatened by an act sought to be restrained, the invasion of the right has to be material and substantive and there must be an urgent necessity to prevent the irreparable damage that may result from the invasion ... The standard of proof of that prima facie case is on a balance or, as otherwise put, on a preponderance of probabilities. This means no more than that the Court takes the view that on the face of it the applicant’s case is more likely than not to ultimately succeed.” 26.In the present case, the applicant based its case on the alleged fact that the respondent has gained access to its petrol station and is hindering it from operating the same putting the applicant in a position whereby it cannot service its loan obligations. 27.However, the respondent countered by stating that the respondent is in breach of its contractual obligations and as such does not merit grant of the discretionary equitable orders sought as it has accrued debt of Kshs. 16,493,874.72 as at 13/1/2026 for fuel products supplied and its purported termination of the Branding and Supply agreement was irregular and intended to avoid its repayment obligations. 28.The applicant did not counter, deny or challenge the averments of being in breach of the Agreement and in debt to the respondent by way of a further affidavit in response thereto. That being the case, the evidentiary burden shifted back to the applicant to discharge which it failed to. Accordingly, the averments of wrongdoing by the respondent remain unproven. 29.It is not disputed that the applicant is in debt to the respondent. It is trite that parties are bound by their contracts. It is not part of the Court’s business to interfere in such circumstances unless one of the parties want to steal a match against the other. In any case, the Branding and Supply Agreement between the parties does not provide for cases of breach by either parties. The contract between the parties is for 10 years from 8/2/2017. 30.The applicant having willingly entered into the Branding and Supply Agreement executed on the 8/2/2017, it has a duty to fulfill its obligations as agreed therein and in breach, the respondent has the right to exercise its right to recover monies owed to it. 31.Consequently, the applicant has failed to establish a prima facie case in its favour. 32.On the second principle of irreparable harm, in Paul Gitonga Wanjau v Gathuthi Tea Factory Company Ltd & 2 Others [2016] eKLR, the Court considered the Halsbury’s laws of England on what irreparable loss is and stated that: -“First, that the injury is irreparable and second, that it is continuous. By the term irreparable injury is meant injury which is substantial and could never be adequately remedied or atoned for by damages, not injury which cannot possibly be repaired and the fact that the plaintiff may have a right to recover damages is no objection to the exercise of the jurisdiction by injunction, if his rights cannot be adequately protected or vindicated by damages.” 33.The applicant needed to demonstrate that it was likely to suffer harm that cannot be compensated on monetary sums. In NGURUMAN LIMITED V. JAN BONDE NIELSEN & 2 OTHERS [2014] eKLR, it was stated as follows on irreparable injury or damage: -“On the second factor, that the applicant must establish that he “might otherwise” suffer irreparable injury which cannot be adequately remedied by damages in the absence of an injunction, is a threshold requirement and the burden is on the applicant to demonstrate, prima face, the nature and extent of the injury. Speculative injury will not do; there must be more than an unfounded fear or apprehension on the part of the applicant. The equitable remedy of temporary injunction is issued solely to prevent grave and irreparable injury; that is injury that is actual, substantial and demonstrable; injury that cannot “adequately” be compensated by an award of damages. An injury is irreparable where there is no standard by which their amount can be measured with reasonable accuracy or the injury or harm is such a nature that monetary compensation, of whatever amount, will never be adequate remedy.” 34.In this case, the applicant willingly entered into the Branding and Supply Agreement. The parties failed to provide for the way forward in case of breach. However, part of the obligations of the applicant are to continue the respondent’s brand during the course of the contract and not to interact with or sell any other petroleum product from a competing brand. There has now been default. The respondent is a stable transnational institution with sufficient capacity to compensate the applicant in the event that it suffers loss. The applicant fails also on the second limb of irreparable harm. 35.As to the balance of convenience, the same tilts in favour of allowing the respondent to recoup its arrears before the debt becomes too much and impossible to recover. There is thus no reason abounding for grant of the injunctive relief sought. This limb of the Motion thus fails. 36.Finally, as to whether the Court should issue an order in favour of the applicant allowing it to enter into a supply agreement with any other petroleum company to re-open and operate the station situated on LR No. Kisumu/Nyalunya/4597, this Court is cognizant of the principle pacta sunt servanda (agreements must be kept) and generally will not interfere with or rewrite a contract freely entered into by consenting parties unless when fraud, coercion, undue influence, or illegality are proven. 37.It is trite law that a court cannot rewrite an agreement or contract made between parties. See the case of National Bank of Kenya Limited v Pipe Plastic Samkolit (K) Ltd [2002] eKLR. Accordingly, this court cannot turn a blind eye to the Branding and Supply agreement dated 8/2/2017 between the parties herein and proceed to terminate the same in favour of one allowing the applicant to proceed to enter into another agreement. This limb of the Motion is therefore without merit. 38.The upshot of the above is that the Court finds the application dated 16/12/2025 to be without merit and dismisses the same with costs.It is so ordered. DATED AND DELIVERED AT KISUMU THIS 12TH DAY OF JUNE, 2026.A. MABEYA, FCI ArbJUDGE