https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11670

Khaemba t/a Sipeto Construction Engineering & General Contractors v Kenya Investment Authority & another (Civil Suit E002 of 2025) [2026] KEHC 11670 (KLR) (Commercial and Tax) (23 July 2026) (Ruling) Neutral citation: [2026] KEHC 11670 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Civil Suit E002 of 2025 BK Njoroge, J July 23, 2026 Between Wilson Wafula Khaemba t/a Sipeto Construction Engineering & General Contractors Plaintiff and Kenya Investment Authority 1st Defendant Gulf African Bank Limited 2nd Defendant Ruling 1.The Applicant filed the Notice of Motion dated 22nd January, 2025 seeking the following orders:a.The suit against the 2nd Defendant be struck out with costs.b.The Costs of this application be borne by the Plaintiffs. 2.The Application was premised on the grounds that the Plaintiff's claim is statute-barred under Sections 4(2) and 26(a) of the Limitation of Actions Act, arguing that the cause of action accrued on or about 2nd September, 2014. This is when the Plaintiff allegedly discovered the fraudulent opening of an account and the alleged acts of fraud. Consequently, the limitation period expired on or about 1st September, 2017, yet the Plaint was not filed until 23rd December, 2024. This is approximately seven years after the claim became time-barred. The 2nd Defendant therefore urges the Court to strike out the suit with costs. It maintains that, under Order 2 Rule 15(1)(a) and (2) of the Civil Procedure Rules, no evidence is admissible in determining an application to strike out a pleading. 3.The Respondent filed a Replying Affidavit sworn on 29th March, 2025 and stated that the claim is founded on fraud and therefore falls within the exception provided under Section 26 of the Limitation of Actions Act. The provision postpones the operation of the limitation period in cases involving fraud. 4.The Plaintiff contended that although the cause of action arose on 2nd September, 2014, the 2nd Defendant cannot rely on limitation as a defence because the claim is expressly excluded from the ordinary limitation period. Accordingly, the Plaint filed on 23rd December, 2024 is said to be within the statutory exceptions. The Plaintiff further described the application to strike out the suit as an abuse of the Court process, asserting that it would occasion him further hardship and injustice arising from the alleged fraudulent acts. Issues for determination 5.The Court has carefully considered the Application, the response, the written submissions and oral highlights by Counsel for the parties. The Court frames a single issue for determination as follows:(a)Whether the suit against the 2nd Defendant is time barred. Analysis 6.It was the Applicant’s case that the Plaintiff's claim is statute-barred under Section 4(2) of the Limitation of Actions Act. The law requires actions founded on tort to be commenced within three years of the accrual of the cause of action. By virtue of Section 26(a), time began to run on or about 2nd September, 2014, when the Plaintiff allegedly discovered the fraudulent account. Hence, the limitation period consequently expired on or about 1st September, 2017. Since the present suit was not filed until 23rd December, 2024, approximately seven years after the claim became time-barred, it is incompetent and ought to be dismissed. 7.Section 4(2) of the Limitation of Actions Act provides as follows: 2.An action founded on tort may not be brought after the end of three years from the date on which the cause of action accrued:Provided that an action for libel or slander may not be brought after the end of twelve months from such date. 3.An action for an account may not be brought in respect of any matter which arose more than six years before the commencement of the action. 8.Section 26 (a) of Limitation of Actions Act states as follows:Where, in the case of an action for which a period of limitation is prescribed, either—a.the action is based upon the fraud of the defendant or his agent, or of any person through whom he claims or his agent; orb.the right of action is concealed by the fraud of any such person as aforesaid; orc.the action is for relief from the consequences of a mistake, the period of limitation does not begin to run until the plaintiff has discovered the fraud or the mistake or could with reasonable diligence have discovered it… 9.The Plaintiff’s suit is based upon the alleged fraud of the Defendants. As stated in Section 26(a) of the Limitation of Actions Act, where an action is based on fraud, time does not begin to run until the Plaintiff discovers it. The Plaintiff in his Replying Affidavit admitted that the cause of action arose on 2nd September, 2014 when he discovered the fraud. 10.At paragraphs 16, 19 and 20 of the Plaint, it is pleaded that the discovery of the fraud was on 2nd September, 2014. This date is thus cast in stone in the pleadings and forms the point of reckoning for purposes of calculation of time. 11.The Court agrees with the Applicant that the cause of action arose on 2nd September, 2014 when the fraud was discovered. Thus, it became time-barred on 1st September, 2017 as provided under the above provisions of the Limitations of Actions Act. See Iga v. Makerere University [1972] EA 65, Masulal Maganlal Rawal v Maneklal Maganlal Rawal [1989] KEHC 93 (KLR) and Kenya Civil Aviation Authority v Kihoro & 2 others [2019] KECA 400 (KLR). 12.Therefore, the Plaintiff’s suit as against the 2nd Defendant is hereby struck out. 13.As to costs, the same follow the event. The Court awards the costs of the suit to the 2nd Defendant. Determination 14.The 2nd Defendant/Applicant’s application by way of a Notice of Motion dated 22nd January, 2025 is allowed in the following terms:a.The suit against the 2nd Defendant is HEREBY struck out with costs.b.The Costs of this application be borne by the Plaintiff. 15.It is so ordered. DATED, SIGNED AND DELIVERED AT MILIMANI THIS 23RD DAY OF JULY, 2026.NJOROGE BENJAMIN K.JUDGEIn the presence of:N/A for Mr. Oonge for the Plaintiff/Respondent.N/A for the 1st Defendant/Respondent.Mr. Anzala holding brief for Mr. Kigata for the 2nd Defendant/Applicant.Mr. John Paul - Court Assistant.