Kcb Bank Kenya Limited v Charingcross Communications Agency & another (Commercial Case E460 of 2023) [2026] KEHC 7427 (KLR) (Commercial and Tax) (21 May 2026) (Ruling)

Kcb Bank Kenya Limited v Charingcross Communications Agency & another (Commercial Case E460 of 2023) [2026] KEHC 7427 (KLR) (Commercial and Tax) (21 May 2026) (Ruling) Neutral citation: [2026] KEHC 7427 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Case E460 of 2023 MO Ado, J May 21, 2026 Between Kcb Bank Kenya Limited Plaintiff and Charingcross Communications Agency 1st Defendant Shukri Adan Mohamed 2nd Defendant Ruling 1.Before the court is the Notice of Motion dated 16th September 2025 by the Defendants/Applicants seeking principally that this court be pleased to set aside the judgment entered on 27th August 2025 together with all consequential orders and grant the Applicants leave to file their defence out of time and defend the suit on the merits. 2.The application is expressed to be brought under Order 51 Rule 1, Order 10 Rule 11 of the Civil Procedure Rules, sections 1A and 3A of the Civil Procedure Act and all enabling provisions of the law. It is supported by the affidavit of the 2nd Defendant, Shukri Adan Mohamed, sworn on 16th September 2025. 3.The Applicants contend that they only became aware of the existence of the suit upon reading a newspaper article published in the Business Daily on 4th September 2025 titled, “Judge Orders Three Safaricom Dealers to pay KCB Sh140M Defaulted Debt.” They state that upon becoming aware of the suit, they instructed counsel who discovered that the matter had already proceeded ex parte culminating in the judgment delivered on 27th August 2025. 4.The Applicants aver that they were never properly served with summons to enter appearance or notified of the proceedings before judgment was entered. They further state that they have a meritorious defence raising triable issues and intend to issue a Third-Party Notice against Safaricom PLC if granted leave to defend the suit. 5.The Respondent opposed the application through the Replying Affidavit sworn by Ferdinand Kalafwel, a Recovery Manager of the Plaintiff bank, on 21st October 2025. The Respondent contends that the application is misconceived, an abuse of the court process and an afterthought intended to delay enjoyment of the fruits of judgment. 6.The Respondent maintains that the Applicants were duly served with summons and all pleadings through various modes including personal service, WhatsApp service, email service and registered post in accordance with Order 5 Rule 3 of the Civil Procedure Rules. The Respondent further states that interlocutory judgment was entered on 16th February 2024 and thereafter the suit proceeded to formal proof culminating in the judgment delivered on 27th August 2025. 7.The Respondent further argues that the Applicants have failed to demonstrate any sufficient cause for their failure to enter appearance or file defence and that the draft defence annexed to the application is a mere denial which raises no triable issue. Analysis and Determination 8.I have considered the application, the affidavits on record and the rival submissions by counsel. The issue for determination is whether the Applicants have made out a case for setting aside the ex parte judgment. 9.The jurisdiction of the court to set aside an ex parte judgment is donated by Order 10 Rule 11 of the Civil Procedure Rules which provides that:“Where judgment has been entered under this Order the court may set aside or vary such judgment and any consequential decree or order upon such terms as are just.” 10.The principles governing the exercise of that discretion are now settled. In Patel v E.A Cargo Handling Services Ltd [1974] EA 75, the Court held that the main concern of the court is to do justice to the parties and that the discretion is intended to avoid injustice or hardship resulting from accident, inadvertence or excusable mistake. 11.Similarly, in Shah v Mbogo [1967] EA 116, the Court stated that the discretion should not be exercised to assist a person who has deliberately sought to obstruct or delay the course of justice. 12.The court is also required to consider whether the proposed defence raises triable issues. In Tree Shade Motor Limited v D.T. Dobie & Company (K) Limited CA No. 38 of 1998, the Court of Appeal held that where a draft defence raises even one bona fide triable issue, the defendant ought to be granted unconditional leave to defend. 13.The record shows that the suit was instituted by the Plaintiff through a plaint dated 30th August 2023 seeking recovery of monies allegedly due under a Murabaha Financing Agreement dated 25th February 2022. The Plaintiff pleaded that it advanced to the 1st Defendant a facility of Kshs. 50,511,840.00 while the 2nd Defendant executed a personal guarantee and indemnity. 14.The judgment delivered on 27th August 2025 shows that the matter proceeded by way of formal proof after interlocutory judgment had been entered. The court found that the Defendants had breached the Murabaha Financing Agreement and entered judgment jointly and severally against them in the sum of Kshs. 45,800,002.65 together with costs and interest. 15.The Applicants challenge the judgment primarily on the ground that they were not served and were condemned unheard. The Respondent, on the other hand, has exhibited affidavits and documents demonstrating attempts at service through various means, including registered post, email, and WhatsApp communication. 16.From the material before the court, I am satisfied that there was substantial compliance with the rules relating to service. The Respondent has exhibited evidence showing that summons and pleadings were dispatched through the postal address provided in the financing agreement and through the email addresses used by the Defendants in the transaction documents. The Applicants have not specifically denied ownership or use of those contacts. 17.Nevertheless, even where service is regular, the court retains unfettered discretion to set aside a judgment where the interests of justice so demand. The court must balance the right of a successful litigant to enjoy the fruits of judgment against the equally weighty constitutional imperative that disputes be determined on their merits where possible. 18.The Applicants annexed a draft defence and indicated an intention to issue third-party proceedings against Safaricom PLC. Although the proposed defence is not particularly strong, I am persuaded that it raises issues relating to the operation and performance of the Murabaha facility, the extent of liability under the guarantee, and the relationship between the parties and Safaricom PLC. Those are matters which, in my view, merit interrogation at a full hearing. 19.I also take into account the magnitude of the decretal sum involved and the fact that denial of an opportunity to defend the claim would effectively shut out the Applicants from ventilating their case. The prejudice likely to be suffered by the Plaintiff can adequately be compensated by an award of thrown-away costs and appropriate timelines for expeditious disposal of the suit. 20.In the circumstances, and guided by the principles in Patel v E.A Cargo Handling Services Ltd (supra) and Shah v Mbogo (supra), I am satisfied that this is a proper case for the exercise of the court’s discretion in favour of the Applicants. 21.Consequently, the Notice of Motion dated 16th September 2025 is allowed on the following terms:i.The judgment delivered on 27th August 2025 and all consequential orders are hereby set aside.ii.The Defendants/Applicants shall file and serve their Statement of Defence together with all accompanying documents within fourteen (14) days from the date hereof.iii.The Plaintiff/Respondent shall be at liberty to file any reply thereto within fourteen (14) days of service.iv.The Defendants/Applicants shall pay thrown away costs assessed at Kshs. 100,000/= to the Plaintiff within thirty (30) days from the date hereof, failing which the orders herein shall automatically lapse.v.Costs of the application shall abide the outcome of the suit. 22.It is so ordered. DATED, SIGNED, AND DELIVERED AT NAIROBI THIS 21ST DAY OF MAY 2026HON. MR. JUSTICE MOSES ADOJUDGE OF THE HIGH COURTIn the Presence of:Moses C/AMs. Omani………………for the Defendant/ApplicantMs. Mbithe h/b for Garat……………for the Plaintiff/Respondent