https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11106

Sanamwala v Mogo Auto Ltd (Miscellaneous Application E1072 of 2025) [2026] KEHC 11106 (KLR) (Commercial and Tax) (23 July 2026) (Ruling) Neutral citation: [2026] KEHC 11106 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Miscellaneous Application E1072 of 2025 BW Murunga, J July 23, 2026 Between John Leeiyo Sanamwala Applicant and Mogo Auto Limited Respondent Ruling Introduction And Background 1.This Ruling relates to an application by way of a Notice of Motion dated 29th October 2025 brought under Order 40 Rules 1, 2 and 4 of the Civil Procedure Rules, 2010, Section 1A, 1B, and 3A of the Civil Procedure Act, and all enabling provisions of the law. The Application sought the following orders: -a.Spentb.That this Honourable Court do issue interim orders suspending further repayment obligations under the loan facility pending the hearing and determination of this Application.c.That this Honourable Court do issue orders compelling the Respondent to regularize and recalculate the loan facility in Kenya Shillings in compliance with the Competition Authority of Kenya's directive.d.That this Honourable Court do issue such other or further orders as it may deem just and expedient in the interests of justice.e.That costs of this Application be awarded to the Applicant. 2.The application is supported by the affidavit of John Leeyio Sanamwala sworn on 29th October, 2025 and is premised on the grounds that the Applicant entered into a loan facility agreement with the Respondent on 30th November, 2022, under which the loan was disbursed in Kenya Shillings but the repayment schedule and loan statements were denominated in United States Dollars. The Applicant contends that the Respondent has continued to calculate repayments in United States Dollars contrary to the directive issued by the Competition Authority of Kenya requiring such loan facilities to be denominated in Kenya Shillings. The Applicant further avers that the Respondent's conduct has exposed him to adverse foreign exchange fluctuations, occasioning financial prejudice and rendering repayment commercially impracticable. He states that the Respondent has threatened to repossess the motor vehicle offered as security and that, unless the interim orders sought are granted, he stands to suffer irreparable loss through enforcement of the security while continuing to make repayments under terms that are unlawful and prejudicial. 3.The Respondent opposed the application through the Grounds of Opposition dated 24th November, 2025 and the Replying Affidavit of Mordecai Gitau Wainaina, its Legal Officer sworn on 15th April, 2026. The Respondent contends that the application is fatally defective, incompetent and an abuse of the court process, having been commenced by way of a Notice of Motion without any substantive suit or other originating process. The Respondent further avers that the interlocutory reliefs sought are not anchored on any pleading and therefore cannot be granted in the absence of a suit. The Respondent deposes that the Applicant voluntarily entered into a USD-denominated loan facility together with a Security Agreement and an Insurance Premium Financing Agreement, and expressly agreed to repay the loan in Kenya Shillings at the prevailing exchange rate, having elected that option in order to benefit from lower interest rates while assuming the attendant exchange rate risk. 4.It is further deposed that the Applicant persistently defaulted in servicing the loan, thereby attracting default interest, penalties and other contractual charges, and that the Respondent lawfully issued demand and default notices before initiating recovery of the motor vehicle offered as security. The Respondent denies that the Competition Authority of Kenya issued a general directive requiring all loan facilities to be denominated in Kenya Shillings, maintaining that the directive relied upon by the Applicant related only to specific negotiated settlements and did not apply to the Applicant's loan facility. The Respondent further states that the Applicant never requested conversion of the loan into Kenya Shillings prior to instituting these proceedings, although it would be willing to consider such conversion on mutually agreed terms. Finally, the Respondent maintains that parties are bound by the terms of contracts freely entered into and urges the Court to strike out or dismiss the application with costs. Applicant's Submissions 5.The Applicant submits that he is entitled to the orders sought on the basis that the Respondent's loan repayment structure has already been found by the Competition Authority of Kenya (CAK) to be misleading and prejudicial to consumers. 6.It is argued that the Applicant's loan facility falls within the scope of the impugned conduct and that the continued enforcement of the USD-denominated repayment structure violates his constitutional consumer rights under Article 46 of the Constitution. 7.The Applicant further submits that he has satisfied the principles for the grant of an interlocutory injunction as set out in Giella v Cassman Brown and Mrao Ltd v First American Bank of Kenya Ltd, having established a prima facie case, the likelihood of irreparable harm through repossession of the charged motor vehicle, and that the balance of convenience favours preservation of the status quo. 8.On the Respondent's objection that the application is incompetent for want of a substantive suit, the Applicant argues that the Court has inherent jurisdiction under Section 3A of the Civil Procedure Act and Article 159(2)(d) of the Constitution to grant appropriate relief in furtherance of a statutory determination by the Competition Authority of Kenya, and therefore urges the Court to allow the application with costs. Respondent's Submissions 9.The Respondent submits that the application is incompetent and incapable of granting the reliefs sought, having been commenced by way of a Notice of Motion without any substantive suit or other recognized originating process as required under the Civil Procedure Act and the Civil Procedure Rules. 10.In support of this argument, reliance is placed on Joseph Kibowen Chemjor v William C. Kisera [2013] eKLR, Samuel Chege Thiari & another v Eddah Wanjiru Wangari & 3 Others [2018] eKLR, and Kalyonge v Karanja (Miscellaneous Application E070 of 2021) [2022] KEHC 16174 (KLR). The Respondent further submits that the Court lacks jurisdiction to determine substantive contractual rights or grant mandatory orders in a miscellaneous application, and that the orders sought would effectively rewrite the parties' contract contrary to the principle enunciated in National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another [2001] eKLR. 11.It is further argued, on the authority of Locabail International Finance Ltd v Agro Export & Another, as adopted in Kenya Breweries Ltd & Another v Washington O. Okeyo [2002] eKLR, that the Applicant has not established the exceptional circumstances necessary for the grant of a mandatory injunction at an interlocutory stage. The Respondent also submits that the Applicant voluntarily elected a USD-denominated loan facility with full knowledge of its terms, and that the issues raised require determination through a substantive suit rather than a miscellaneous application. 12.Finally, it is contended that the directive issued by the Competition Authority of Kenya relates to different parties and loan agreements and is therefore inapplicable to the present dispute, relying on World Explorers Safaris Ltd v Cosmopolitan Travel Ltd & Another [2021] eKLR. Accordingly, the Respondent urges the Court to dismiss the application with costs.Issues For Determinationa.Whether the Notice of Motion dated 29th October, 2025 is competent in the absence of a substantive suit and, if so, whether the Applicant is entitled to the orders sought.b.Who should bear the costs of the Application. Analysis And Determination 13.Regarding the first issue, the Respondent's primary objection is that the Applicant has commenced these proceedings by way of a Notice of Motion without filing a substantive suit. It is contended that a Notice of Motion is not an originating process known to law and that, in the absence of a suit, the Court lacks jurisdiction to entertain the application or grant the reliefs sought. 14.The Applicant, on the other hand, maintains that the application seeks to enforce rights arising from the Competition Authority of Kenya's determination and that this Court has inherent jurisdiction under Section 3A of the Civil Procedure Act and Article 159(2)(d) of the Constitution to grant the reliefs sought notwithstanding the absence of a substantive suit. 15.For clarity, some basics are necessary to commence the analysis even if its just to determine what some words stand for. What, pray, is a "suit" for the purposes of making a determination on the first issue? Black's Law Dictionary defines "suit" as any proceeding by a party or parties against another in a court of law. 16.Section 2 of the Civil Procedure Act then goers ahead to define "suit" as all civil proceedings commenced in any manner prescribed. "Prescribed" under Section 2 means prescribed by rules. 17.The institution of civil proceedings is thus 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. In expounding on this provision, the court in Joseph Kibowen Chemjor v William C. Kisera [2013] eKLR opined that: -“It will be observed that Section 19 does not pretend that the Civil Procedure Rules have a monopoly on how suits should be instituted. It provides that suits may be instituted in the manner prescribed by rules. There could be rules in other statutes on how proceedings may be commenced.” 18.A distinction must be drawn between proceedings that merely seek the Court's discretion or procedural orders and those that seek the determination or enforcement of substantive civil rights. In the latter case, and as applicable here, the proceedings constitute a civil action and must be instituted in the manner 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. In Proto Energy Limited v Hashi Energy Limited [2019] KEHC 12311 (KLR), the court held that: -“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.” 19.The Applicant's reliance on Section 3A of the Civil Procedure Act and Article 159(2)(d) of the Constitution is misplaced. Although Article 159(2)(d) of the Constitution enjoins this Court to administer justice without undue regard to procedural technicalities and Section 3A of the Civil Procedure Act preserves its inherent jurisdiction, neither provision can be invoked to cure a fundamental defect in the institution of proceedings, dispense with mandatory procedural requirements, or confer jurisdiction where none exists. The Court's inherent powers are exercisable only in aid of properly instituted proceedings and cannot be used to circumvent the mandatory provisions governing the commencement of civil actions. 20.The rationale underlying this strict approach is not one of mere formalism. Rules governing the institution of suits exist to ensure that a respondent is placed on proper notice of the case it is called upon to answer, that the issues in controversy are framed with sufficient particularity to permit a fair hearing, and that the Court's coercive powers of injunction are exercised only within defined and identifiable proceedings capable of final determination. 21.To relax these requirements at the convenience of a party would substitute the discipline of pleading with an unstructured process in which neither the Court nor the opposing party can be certain of the claim being advanced or the relief ultimately at stake. It is for this reason that courts have consistently declined to treat Article 159(2)(d) of the Constitution as a general dispensation from the manner of instituting suits prescribed by law. 22.That same position was reiterated in Samuel Chege Thiari & another v Eddah Wanjiru Wangari & 3 others [2018] eKLR, where the Court, after evaluating the binding authority of the Supreme Court in Raila Odinga & others v IEBC [2013] eKLR, held that the applicant was not properly before the court as there was no suit upon which the Notice of Motion could stand, and that the court could not invoke its inherent jurisdiction to cure that defect. 23.Similarly, in Salim Tunje Gambo v Commissioner of Lands & 9 others [2001] eKLR, Waki J emphasized on procedural requirements in civil action suits, stating: -“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.” 24.This position finds further reinforcement in more recent decisions of this Division and of the High Court generally. In Insurance Regulatory Authority v Directline Assurance Company Limited & 4 others; Equity Bank Kenya Limited & another (Interested Parties) [2024] KEHC 11891 (KLR) (Commercial and Tax), the Court struck out a Notice of Motion filed without an accompanying suit on the same reasoning applied in Proto Energy Limited (supra). 25.In Kalyonge v Karanja [2022] KEHC 16174 (KLR) (Commercial and Tax), a decision already relied upon by the Respondent, the Court went further to observe that an interlocutory injunction can only be granted pending the resolution of a suit properly before it, and that a miscellaneous cause commenced by way of a motion terminates the proceedings entirely once the application is determined, leaving no further hearing of the underlying dispute. The same principle was restated as recently as 30th July 2025 in SM v MNM [2025] KEHC 12052 (KLR), underscoring that the requirement is neither dated nor a matter of academic dispute, but remains settled and current law. 26.In the present matter, the Applicant seeks substantive reliefs including suspension of repayment obligations, an order compelling the Respondent to regularize the loan facility, and mandatory orders directing recalculation of repayments. These are substantive prayers that determine the parties' contractual rights and obligations. Such reliefs cannot be granted in vacuo. They must be anchored upon a properly instituted suit. 27.Indeed, Order 40 Rules 1 and 2 of the Civil Procedure Rules contemplate the existence of a suit before interlocutory injunctive relief may be granted. In the absence of a plaint, petition, originating summons or other recognized originating process, there is no suit upon which the interlocutory application can stand. 28.The Respondent further submitted that the mandatory orders sought would effectively rewrite the parties' contract. Although there is force in the argument that courts ordinarily do not rewrite contracts freely entered into by parties, as stated in National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another [2001] eKLR, I find it unnecessary to delve into the merits of that contention. Having found that the application itself is incompetent, any determination on the substantive contractual issues would be premature and merely academic. 29.Similarly, although the Applicant has extensively relied on the findings of the Competition Authority of Kenya and the principles governing interlocutory injunctions in Giella v Cassman Brown & Co. Ltd [1973] EA 358 and Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] eKLR, this Court cannot embark upon an examination of whether those principles have been satisfied in proceedings that have not been properly instituted. To do so would amount to exercising jurisdiction where no competent proceedings exist. 30.For the same reason, the Applicant's invocation of Article 46 of the Constitution on consumer protection, though a serious matter meriting consideration in the proper forum, cannot be determined in these proceedings. The constitutional character of a claim does not exempt it from the procedural requirements governing the institution of civil proceedings, and this Court declines to use Article 46 as an alternative gateway through which to adjudicate a dispute that has not been properly brought before it. Nothing in this Ruling should be understood as a finding on whether the Respondent's loan repayment structure is, or is not, compliant with the Competition Authority of Kenya's directive; that question remains open for determination in a properly constituted suit. 31.Accordingly, I find that the Notice of Motion dated 29th October, 2025, having been filed in the absence of a substantive suit, is incompetent and fatally defective. The defect is not a mere procedural irregularity capable of being cured under Article 159(2)(d) of the Constitution or Section 3A of the Civil Procedure Act. It goes to the very competence of the proceedings and deprives the Court of the basis upon which the interlocutory reliefs sought may be considered. 32.It is the substantive suit that clothes the Court with jurisdiction to grant appropriate reliefs and Article 159(2)(d) of the Constitution or Section 3A of the Civil Procedure Act are not a panacea for matters that go beyond technicalities such as this one which is now, in a sense, a jurisdictional issue. Courts should be moved appropriately through the various substantive suits including but not limited to the most generic ones such as Plaints or Petitions. 33.If I was to be metaphorical and use a tree as my inspiration, the root of the tree would be the cause of action; the trunk is the substantive suit; whilst the branches are the interlocutory applications made. From these interlocutory applications the fruits, being the remedies, may be plucked and enjoyed though the action of cutting down the trunk may still yield the fruits to equate it to the final disposition of the substantive suit. The Notice of Motion in this instant is a branch grafted to no trunk. 34.Regarding the second issue, on costs, Section 27(1) of the Civil Procedure Act vests in this Court a wide discretion to determine by whom, and to what extent, costs are to be paid, subject to the proviso that the costs of any action, cause, matter or issue shall follow the event unless the Court, for good reason, orders otherwise. As was observed in Republic v Rosemary Wairimu Munene (Ex parte Applicant) v Ihururu Dairy Farmers Co-operative Society Ltd, Judicial Review Application No. 6 of 2004, an award of costs is intended to indemnify the successful party for the expense and trouble of litigation, and is not punitive in character. In exercising this discretion, the Court has regard to considerations such as the conduct of the parties, the circumstances that led to the institution of the proceedings, and the stage and manner at which the proceedings were terminated: Cecilia Karuru Ngayu v Barclays Bank of Kenya & another [2016] eKLR. 35.Applying these principles to the present matter, the Respondent has successfully resisted the application on a threshold point of law going to its very competence, and the proceedings have been terminated at that preliminary stage without any fault attributable to the Respondent. The Applicant has not demonstrated any special circumstance that would justify departing from the general rule that costs follow the event. The Respondent, as the successful party, is accordingly entitled to the costs of the Application. 36.With the allegory of the tree above, the costs are the dew that formed on the fruits. Sometimes the dew forms and sometimes it doesn’t. The discretion to determine whether it had formed is made in favour of the Respondent in the now. Disposition 37.Having found that the Notice of Motion dated 29th October, 2025 is incompetent and fatally defective for want of a substantive suit, I decline to consider the merits of the reliefs sought therein. Accordingly, I make the following orders: -a.The Notice of Motion dated 29th October, 2025 be and is hereby struck out.b.The Applicant shall bear the costs of the Application.c.For the avoidance of doubt, this Ruling determines only the procedural competence of the Notice of Motion and does not pronounce on the merits of the Applicant's grievance regarding the denomination of the loan facility. Nothing herein precludes the Applicant from instituting a suit properly constituted in accordance with the law, should he be so advised. Orders accordingly. DATED AND DELIVERED AT NAIROBI THIS 23RD DAY OF JULY, 2026.BENARD WAFULA MURUNGAJUDGEDelivered on virtual platform in the presence of:Kerika instructed by Kerika Leina for the ApplicantMs Maingi h/b for Okoth instructed by KOD for the RespondentKevin Babu - Court Assistant