https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/8974

Kimenye & another v Kenya Commercial Bank Ltd & 2 others (Civil Case E002 of 2026) [2026] KEHC 8974 (KLR) (Civ) (25 June 2026) (Ruling) Neutral citation: [2026] KEHC 8974 (KLR) Republic of Kenya In the High Court at Nyandarua Civil Civil Case E002 of 2026 KW Kiarie, J June 25, 2026 Between Peter Kiguta Kimenye 1st Applicant Edward Githire Kiguta 2nd Applicant and Kenya Commercial Bank Ltd 1st Respondent Kenol Kobil Limited 2nd Respondent Sanjom Auctioneers 3rd Respondent Ruling 1.The parties agreed to have the two applications heard and decided together. 2.The first application was by plaintiffs/applicants who moved the court through a Notice of Motion dated the 6th day of March 2026, which was brought under section 1A, 3A & 63 of the Civil Procedure Act, Order 40, Rules 1, 2 and 4 of the Civil Procedure Rules. They are seeking the following orders:a.That this Application be certified as urgent and service be dispensed with in the first instance. [Spent]b.That a temporary injunction be issued restraining the 1st and 2nd respondents jointly and severally, their agents, employees, or servants from advertising for sale, selling, auctioning, transferring, or dealing in any manner with the charged property known as L.R.No. Nyandarua/Githioro/1084 (hereinafter "the suit property") pending the hearing inter partes of this application.c.That a temporary injunction be issued restraining the 1st and 2nd respondents jointly and severally, their agents, employees, or servants from advertising for sale, selling, auctioning, transferring, or dealing in any manner with the charged property known as L.R.No. Nyandarua/Githioro/1084 (hereinafter "the suit property") pending the hearing and determination of this suit.d.That a conservatory order be issued suspending any further enforcement of the alleged debt arising from the Guarantee No. CB/CR/LG/RDTM/184-13 paid by the 1st respondent to the 2nd respondent, pending the investigation into the actual amount payable.e.That the costs of this application be in the cause. 3.The application was based on the following grounds:a.That the applicant/plaintiffs have challenged the Arbitral Award rendered on 6th May 2025 and any consequential orders or directions arising therefrom by way of an application to set aside the said award.b.That the 1st respondent is currently taking active steps to sell the plaintiff charged property and has unlawfully issued a notice to sell through its agent Sanjomu Auctioneers, to conduct the sale by public auction.c.The defendant's agent, Sanjomu Auctioneers, has also issued a notification on sale to the defendant and threatened to sell the subject property by public auction on 24th March 2026.d.The defendant’s actions are unlawful and in breach of the law and the mortgage agreement.e.The ostensive exercise of the chargee's power of sale by the defendant grossly offends the agreements and the provisions of Sections 90, 96 and 97 of the Land Act, 2012.f.Unless this Court promptly intervenes, the plaintiff will suffer incalculable and irreparable loss at the hands of the defendant.g.That unless this honourable court intervenes urgently, the applicant will suffer irreparable loss and damage as the property will be disposed of before the court determines the legality of the award. 4.The 2nd defendant/respondent opposed the application and advanced the following arguments:a.The dispute between Peter Kiguta Kimenye (1st Plaintiff), Edward Githiri Kiguta (2nd Plaintiff), Kenya Commercial Bank Ltd (KCB), and Rubis Energy Kenya PLC (formerly Kenol Kobil Limited) originates from dealership agreements and a subsequent contested bank guarantee recovery process.b.In October 2013, Edward Githiri Kiguta entered into two separate License Agreements with Kenol Kobil Limited to operate branded petrol stations at Ikinu (Kiambu County) on October 2 and Githumu (Murang'a County) on October 14. As a condition precedent to these contracts, Edward was required to provide a bank guarantee.c.On March 11, 2014, KCB Bank issued Bank Guarantee No. MD1407000062R for a total of Kshs 7,000,000 (allocated as Kshs 3,000,000 for the Ikinu station and Kshs 4,000,000 for the Githumu station). This guarantee was secured by a charge over a parcel of land known as L.R. No. Nyandarua/Githioro/1084, which is registered to Peter Kiguta Kimenye.d.On April 26th, 2014, Kenol Kobil terminated the dealership agreements and took over the management of both petrol stations. The company cited defaults in payment for supplies and a failure to meet set sales targets as the grounds for termination. Edward Kiguta immediately challenged this action by filing HCCC No. 172 of 2014 on April 30th, 2014.e.The dispute was subsequently referred to arbitration before Sole Arbitrator Protas Saende Gathege. Edward Kiguta (the Claimant) sought special damages totalling Kshs 7,561,347.40 for illegal payments, unrefunded guarantee amounts, and fuel losses, as well as general damages for breach of contract.f.On May 6th 2025, the Arbitrator rendered a Final Arbitral Award dismissing Edward’s claim in their entirety. The Arbitrator found that the termination was justified because the Claimant had failed to meet sales targets. defaulted on advance payments for fuel, and failed to manage the stations personally.g.Through Sanjomu Auctioneers, the bank issued a Notification of Sale on January 8th, 2026, for the charged property (L.R. No. Nyandarua/Githioro/1084) to recover a debt stated as Kshs 2,846,994 plus interest. The public auction was scheduled for March 24, 2026.h.The doctrine of res judicata fundamentally bars the current suit and the application for injunction, as the core issues regarding the indebtedness of the Plaintiffs and the validity of the bank guarantee recall have already been definitively adjudicated in a previous forum.i.Identity of Parties and Subject Matter: The arbitration proceedings involved the same parties—Edward Githiri Kiguta as the Claimant and Kenol Kobil Limited (now Rubis Energy Kenya PLC) as the Respondent.j.The current Plaint and Application seek a declaration that the "actual amount payable under the bank guarantee is currently undetermined" and request a "full audit". These prayers are a transparent attempt to relitigate the very same accounting and indebtedness issues that were the heart of the 2019-2025 arbitration.k.Because a competent legal forum (the Arbitral Tribunal) has already delivered a Final Award dismissing the Plaintiffs' challenges to the guarantee recall and the underlying debt, which Award has not been set aside. The Plaintiffs are legally prohibited from bringing these same issues before the High Court in a new suit. Allowing this suit to proceed would ignore the finality of the arbitral process and permit a collateral attack on a validly rendered award.l.Pending Application to Set Aside: The Plaintiffs expressly admit in their own pleadings that they have filed an application to set aside the Final Arbitral Award dated 6th May 2025. This application, filed under Section 35 of the Arbitration Act, is currently active and is scheduled for directions on 20th May 2026.m.Concurrent Litigation in Different Courts: The application to set aside the award is pending before the High Court at Nairobi. By filing this fresh suit and injunction application in the High Court at Nyandarua, the Plaintiffs are asking two different courts of concurrent jurisdiction to determine the same underlying dispute simultaneously.n.The allegation that the 2nd respondent recalled the Bank Guarantee in "flagrant disobedience" of a court order is entirely misleading.o.No Retroactive Application: A party cannot be held in disobedience of a court order for an action taken before the order was granted. Since the demand, the specific act the court later sought to restrain, was already a fait accompli by 8th May, the 2nd respondent did not violate the order by having previously exercised its contractual right to demand the funds.p.The court order dated 8th May 2014 specifically restrained the 2nd respondent from "demanding" the amount named in the guarantee. It did not restrain KCB Bank from paying out the funds, nor did it order the 2nd respondent to withdraw a demand that had already been made.q.At the time the order was issued, KCB Bank was not a party to the suit (HCCC No. 172 of 2014). As the bank was not a party and was not specifically enjoined from honouring a demand, its decision to pay the 2nd respondent on 9th May 2014 was a standard fulfilment of its independent obligation under the bank guarantee. It did not constitute a breach of the order by the 2nd respondent.r.T he License Agreements for the operation of the Ikinu and Githumu petrol stations, which form the basis of the underlying dispute, were entered into exclusively between Kenol Kobil Limited (now Rubis Energy) and the 2nd Plaintiff, Edward Githiri Kiguta. The Plaintiff is not a party to these agreements.s.The arbitration proceedings that definitively adjudicated the disputes arising from the dealership agreements correctly identified the parties as Edward Githiri Kiguta (Claimant) and Kenol Kobil Limited (Respondent). The Plaintiff was not a party to the arbitration because he had no interest in the dealership contracts themselves.t.Because there is no contract between the 1st Plaintiff and Rubis Energy, the 1st Plaintiff has no cause of action against the 2nd respondent. Consequently, he lacks the locus standi (legal standing) to seek injunctive relief or any other orders to restrain the 2nd Respondent from enjoying the fruits of a contract to which he was a stranger.u.Any grievance the Plaintiff has regarding the intended sale of his property must be directed at KCB Bank, the chargee with whom he has a direct legal relationship, rather than at the 2nd Respondent, who is merely a creditor of the bank under a separate guarantee agreement.v.In summary, as there is no contract between Peter Kiguta Kimenye and Rubis Energy, he is a legal stranger to their dealings. He cannot maintain a suit or obtain orders against them.w.An irreparable injury is one that a remedy in damages cannot adequately compensate. In this case, the Plaintiffs' grievance centres on a specific, liquidated sum of Kshs 2,733,192 paid by KCB Bank to the 2nd Respondent. Because the loss has been quantified to the exact cent, it is, by definition, a financial loss that can be remedied through a monetary award should the Plaintiffs eventually succeed in their main suit.x.While the Plaintiffs claim the property is "family premises," they voluntarily commercialized the land by charging it to KCB Bank to secure a Kshs 7,000,000 business facility. By using the property as a "Security Deposit" for the operation of the Kobil Ikinu and Githumu Service Stations, the plaintiffs acknowledged that the land was a commercial asset liable to be realized in the event of default.y.In light of the foregoing, it is evident that the applicants have failed to satisfy the legal requirements for the grant of an injunction. There is no prima facie case with a probability of success because the core issues regarding the 2nd respondent's debt and the lawfulness of the bank guarantee recall are res judicata, having been definitively dismissed in the Final Arbitral Award dated 6th May 2025. 5.To persuade the court to issue a temporary injunction before the case is heard and decided, the applicants must meet the criteria outlined in Giella v Cassman Brown & Company Limited [1973] EA 358. The court stated:First, an applicant must show a prima facie case with a probability of success. Secondly, an interlocutory injunction will not normally be granted unless the applicant would otherwise suffer irreparable injury that an award of damages cannot adequately compensate. Thirdly, if the Court is in doubt, it will decide an application on the balance of convenience. 6.I have reviewed the application and the rival submissions from the parties. I conclude that the applicants have not shown they will experience irreparable harm that monetary remedies cannot offset. 7.Additionally, I observe that many issues raised in this application need evidence to be presented, and the most effective way to do so is during the hearing. 8.The plaintiffs/applicants appear to be forum shopping. They acknowledged that when Kenol Kobil terminated a contract they had entered into with Edward Githiri Kiguta, he filed HCCC No. 172 of 2014 in the High Court. This ought to be the court where the present application should have been made. Filing another suit in this court is a blatant abuse of the court process. 9.The second application is by the 2nd defendant and is dated the 7th day of April 2026 and was filed by the 2nd defendant by way of Notice of Motion. The applicant is seeking the following orders:a.The Plaintiffs' suit against the 2nd defendant is hereby struck out because it is frivolous, vexatious, and an absolute abuse of the court process.b.In the alternative, and without prejudice to prayer 1 above. The plaintiffs' suit against the 2nd defendant is hereby dismissed.c.The costs of this application and the suit be awarded to the 2nd defendant. 10.The following grounds support the application:a.The issues raised in this suit, specifically the determination of the actual amount payable under the bank guarantee and the lawfulness of its recall, were the subject of a Final Arbitral Award dated 6th May 2025.b.The Arbitrator dismissed the 2nd plaintiff's claims in their entirety after finding that the 2nd defendant was entitled to the funds to settle a debt of Kshs 2,733,192.c.The plaintiffs have already moved the High Court at Nairobi (H. COMM/172/2014) to set aside the aforementioned Arbitral Award. This suit is a collateral attempt to litigate the same issues concurrently in a different court.d.The cause of action regarding the termination of the dealership and the recall of the bank guarantee arose in April and May 2014. This suit was filed in 2026. is barred by the 6-year limitation period for contractual claims.e.There is no contractual relationship between the 1st Plaintiff and the 2nd Defendant. The License Agreements were exclusively between the 2nd Plaintiff and the 2nd Defendant. The 1st plaintiff is a third-party chargor whose relationship is strictly with the 1st defendant bank.f.The 2nd defendant is not a party to the charge created over parcel L.R. No. Nyandarua/Githioro/1084: The property was charged by the 1st plaintiff exclusively in favour of the 1st defendant (KCB Bank) to secure the bank guarantee facility. Consequently, there is no contractual relationship or nexus between the 1st plaintiff and the 2nd defendant regarding the security instrument, and the 2nd defendant has no legal standing or obligations under a document to which it is a total stranger.g.The allegation that the 2nd defendant disobeyed a court order is factually incorrect; the 2nd defendant made the demand on 5th May 2014, while the court order was only issued on 8th May 2014.h.In light of the foregoing, the plaintiffs' suit against the 2nd defendant is a nonstarter, vexatious and an abuse of the court process. It is unjust for the 2nd defendant to incur costs to proceed with a full trial on such a suit, whereas it was not privy to the Charge which gave rise to this suit.i.It is in the interests of justice that the suit against the 2nd defendant be struck out to allow the suit to proceed with only the necessary parties. 11.The 2nd plaintiff opposed the application on the following grounds:a.That the core issue of this suit involves a bank guarantee issued by the 1st defendant bank at my request for purposes of commencing petroleum dealership business, which the 2nd defendant had offered.b.That on the 8th May 2014, the High Court sitting in Nairobi in HCC No. 172 of 2014 issued an order stopping recall or any payment under the guarantee herein to the 1st defendant. The order was duly served upon the defendants herein and duly acknowledged.c.That on the 9th May 2014, and despite the orders in place, the 1st defendant paid out a sum of Kshs 2.7 million directly to the 2nd defendant under the disputed bank guarantee.d.That the matter then proceeded for arbitration and an award was rendered on the 6th May 2025, dismissing my claim against the 2nd defendant.e.That the award is yet to be adopted as an order of the court, and I have filed an application where I am seeking to set aside the findings of the arbitration, as I believe the same was compromised.f.That the 2nd defendant is a necessary party to this suit as they hold the funds that form the subject matter of the dispute. A complete and final resolution cannot be reached without their presence.g.The issue of the 1st defendant bank seeking recovery/indemnity from the Plaintiffs was never a reference point before the Arbitrator.h.That an arbitral award cannot bind or protect a third-party bank, nor can it determine subsequent claims of unlawful payout and debt recovery between a bank and its customer.i.That this suit is neither an abuse of the court process nor an attempt to re-litigate past issues. Rather, it is a fresh, distinct cause of action triggered by the 1st defendant's payout to the 2nd defendant and the 2nd defendant's immediate financial threat to the plaintiffs.j.The plaintiff raises serious, triable issues regarding the premature calling of the guarantee involving both defendants.k.That the 2nd defendant suffers no prejudice by remaining in this suit to defend their receipt of the guarantee funds. In contrast, the plaintiffs will suffer immense financial prejudice if the 2nd defendant is removed. 12.A brief review of the 2nd plaintiff's response clearly shows that the case is an abuse of the court process and that the matter is already before another court. I see no benefit in discussing the other issues further. Therefore, the suit is dismissed with costs awarded to the defendants. DELIVERED AND SIGNED AT NYANDARUA, THIS 25TH DAY OF JUNE 2026.KIARIE WAWERU KIARIEJUDGE