[2012] KEHC 5451 (KLR)

[2012] KEHC 5451 (KLR)

The court found that the suit was improperly instituted as there was no company resolution authorizing the action on behalf of the first plaintiff, Shiawase Limited. The court further held that the action was neither a properly constituted company suit nor a valid derivative action by the second plaintiff, as the two are mutually exclusive and the requirements for a derivative action were not met. The absence of authority to file suit rendered the proceedings a nullity, and the preliminary objection was upheld. Consequently, the suit was struck out with costs to the defendant.

Citation
[2012] KEHC 5451 (KLR)
Parties
Plaintiff: Shiawase Limited; Plaintiff: Floriello Davide; Defendant: Pianesi Gino
Court
High Court
Court Station
High Court at Malindi
Jurisdiction
Kenya
Judgment Date
5 September 2012
Case Number
Civil Case 183 of 2011
Procedural Posture
Preliminary Objection / Ruling on Preliminary Objection
Outcome
preliminary objection upheld; suit struck out with costs
Legal Topics
Company Litigation Authority, Derivative Actions, Internal Management Rule, Preliminary Objection Procedure
Source Language
English
Commercial and Corporate Civil Procedure Company Litigation Authority Derivative Actions Internal Management Rule Preliminary Objection Procedure

Case Brief

Summary, issues, holding and outcome

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Parties

Shiawase Limited

Plaintiff

Floriello Davide

Plaintiff

Pianesi Gino

Defendant

Procedural Posture

Preliminary Objection / Ruling on Preliminary Objection

Legal Issues

  1. 1 Whether the suit was properly instituted on behalf of the company without a company resolution authorizing the action.
  2. 2 Whether the suit contravened mandatory provisions of the Companies Act and Civil Procedure Rules regarding company litigation and representation.
  3. 3 Whether the action constituted a valid derivative suit by the second plaintiff.

Ratio Decidendi

The court found that the suit was improperly instituted as there was no company resolution authorizing the action on behalf of the first plaintiff, Shiawase Limited. The court further held that the action was neither a properly constituted company suit nor a valid derivative action by the second plaintiff, as the two are mutually exclusive and the requirements for a derivative action were not met. The absence of authority to file suit rendered the proceedings a nullity, and the preliminary objection was upheld. Consequently, the suit was struck out with costs to the defendant.

Court Disposition

preliminary objection upheld; suit struck out with costs

Orders

  • The plaintiff's suit is struck out with costs to the defendant.