https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10511

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **(CONSTITUTIONAL AND HUMAN RIGHTS DIVISION)** **MILIMANI LAW COURTS** **CONSTITUTIONAL PETITION NO. E078 OF 2025** **LENANA INNOVATIVE SOLUTIONS LIMITED**.........................................................**1ST PETITIONER** **JOSEPH KURIA**..............................................................................................................................**2ND PETITIONER** **WILFRED KAMAU**.......................................................................................................................**3RD PETITIONER** **ERIC WACHIRA**............................................................................................................................**4TH PETITIONER** **VERSUS** **WLB ASSET II D. PTE LTD**...............................................................................................**1ST RESPONDENT** **WLB ASSET VI PTE LTD**.....................................................................................................**2ND RESPONDENT** **Judgment** **Introduction** 1. The Petition before the court is dated 19th February 2025. It was brought by the Petitioners pursuant to Articles 2(1), 10, 27, 40, 46, 258 and 259 of the Constitution of Kenya, 2010. It challenges the legality and constitutionality of two syndicated cross-border lending transactions between the 1st Petitioner and the Respondents, with an aggregate value of US$17,000,000, together with the securities executed in connection with the said transactions. 2. The Petitioners contend that the Respondents, being foreign bodies corporate registered in Singapore and Mauritius respectively, lacked the legal capacity to contract, to lend, and to take securities in Kenya, by reason of their non-registration and non-licensing under the Companies Act, the Banking Act, the Bill of Exchange Act, the Foreign Investment Protection Act, and the Tax Procedure Act. The Petitioners further impugn the constitutionality of section 6(4) of the Movable Property Security Rights Act, 2017 (hereinafter referred to as “MPSRA”). 3. The Respondents opposed the Petition by filing grounds of opposition dated 6th March 2026 on the grounds that: 1. ***The Petition did not meet the threshold for a constitutional petition;*** 2. ***the Respondents, as foreign bodies corporate duly incorporated in Singapore and Mauritius, possess locus standi to sue and be sued in Kenya, independent of registration under the Companies Act;*** 3. ***none of the statutes relied upon by the Petitioners in fact required the Respondents to register or obtain a licence when involved in cross-border financing;*** 4. ***section 6(4) of the MPSRA is a legitimate and constitutional provision promoting certainty in secured transactions; and*** 5. ***the Petitioners, having received and utilized the full US$ 17,000,000, are estopped by the doctrine of unjust enrichment from resiling from their obligations.*** **Background Facts** 1. The 1st Petitioner is a limited liability company incorporated in Kenya and carrying on business within this country. According to the pleadings, it is engaged in digital credit/micro-lending. The 2nd to 4th Petitioners are its directors and shareholders. Between December 2022 and January 2024, the 1st Petitioner obtained two credit facilities: 2. US$5,000,000 from the 1st Respondent, crystallized in a promissory note dated 21st December 2022, an account charge, a subordination agreement (now extinguished), personal guarantees, share pledges, a deed of assignment of receivables and a memorandum of deposit of shares, all dated on or about 21st December 2022; and 3. US$12,000,000 from the 2nd Respondent, crystallized in a promissory note dated 4th January 2024 and analogous security documents. A charge over the 1st Petitioner's movable assets was registered under the MPSRA, and a certificate of mortgage was issued on 6th March 2024. 4. There is no dispute that the Respondents are not registered in Kenya as foreign companies or branches under the Companies Act, are not licensed by the Central Bank of Kenya, and do not hold Kenya Revenue Authority PIN certificates. It is common ground between the parties that the Petitioners received US$ 17,000,000 from the Respondents and have utilized the entire amount. 5. The Petitioners plead that, having fallen into financial difficulty, they sought a restructuring, which was declined. After receiving breach notices from the Respondents, they discovered that the Respondents were not registered in Kenya and instituted this Petition, together with an application for conservatory orders. The orders were granted ex parte on 19th February 2025 and later confirmed by consent. **Parties Written Submissions** 1. Parties to the Petition filed detailed written submissions. The Petitioner’s submissions are dated 25th March 2026 and the Respondent’s submissions are dated 8th May 2026. 2. The Petitioners' submission took the position that this Court is clothed with jurisdiction under Articles 23, 165 and 258 of the Constitution of Kenya, 2010 to hear and determine the Petition, and that the question of jurisdiction had, in any event, already been settled in the Ruling of 14th August 2025. 3. The Petitioners submitted that the Petition meets the threshold set out in Anarita Karimi Njeru v Republic, having pleaded with precision the rights said to be infringed, the particulars of the infringement, the constitutional provisions engaged, and the jurisdictional basis relied upon. 4. On the constitutionality of section 6(4) of the MPSRA, the Petitioners submit that the provision is repugnant to Articles 2(4), 10, 40 and 46 of the Constitution of Kenya, 2010 in that it purports to render a security agreement enforceable irrespective of compliance with other written law, thereby sanctioning illegality, undermining the rule of law, and permitting arbitrary deprivation of property and consumer harm. 5. The Petitioners urged that the fact that the lack of registration of the Respondents under the Companies Act, lack of a license under the Banking Act, and lack of registration as taxpayers, the Respondents lacked capacity to contract, to hold security under the Movable Property Security Rights Act, or to enforce the promissory notes under the Bill of Exchange Act, rendering the transactions and all associated securities void ab initio and unenforceable for. 6. The Petitioners submitted that the doctrine of unjust enrichment does not avail the Respondents, as restitution cannot be granted in aid of an illegal transaction and would be contrary to public policy. 7. The Petitioners further submitted that the conservatory orders, having been confirmed by consent on 11th February 2026, cannot be set aside absent proof of fraud, mistake or misrepresentation. They sought to rely on **Atogo v Wamboye & 6 others (Civil Appeal 53 of 2019)(2025)KECA 327(KLR)(21 February 2025)[2025]KECA 327(KLR).** 8. On the other hand, the Respondents submitted that the Petition is, in substance, a commercial dispute dressed in constitutional language, brought only after the Respondents declined to restructure the debt and issued breach notices, and that it does not disclose a bona fide constitutional grievance. 9. The Respondents urged that the Petition fails to meet the Anarita Karimi Njeru threshold in that the constitutional provisions relied upon, including Articles 10(2), 27, 40 and 46, of the Constitution of Kenya,2010 are invoked broadly and without precision as to how each was infringed, and without distinguishing the personal rights said to have been violated as between the corporate and individual Petitioners. 10. It was urged that their locus standi to sue and be sued in Kenya derives from their incorporation in Singapore and Mauritius respectively, and is not contingent upon registration under section 974 of the Companies Act, relying on **Bruton Gold Trading LLC v Amadi t/a Amadi Associates Advocates & 6 Others [2025] KEHC 12657(KLR) Mission SOS International Incorporated v Mission SOS Africa INC & 4 Others [2024]KEHC 9498(KLR), and Superon Schweisstechnik India Ltd v Oxychem Africa Limited; Registrar of Trademarks (interested party) [2025]KEHC 8298(KLR).** 11. They further submitted that the Petitioners are the ones that sued the Respondents in the present matter and therefore, are estopped from asserting that the Respondents lack standing to defend the suit, on the doctrine against approbation and reprobation. 12. On the statutory compliance issues, the Respondents submitted that they were not “carrying on business” within the narrow meaning of section 974(2) of the Companies Act, as it was the 1st Petitioner, and not the Respondents, that issued the promissory notes and securities; that they do not undertake “financial business” under the Banking Act as they do not accept deposits from the Kenyan public; that capacity to execute the promissory notes falls to be determined under the law of Singapore and Mauritius rather than Kenyan registration. 13. They further stated that under section 20 of the Bill of Exchange Act, registration under the Foreign Investment Protection Act is optional and non-registration does not affect validity; and that any withholding tax obligation under the Tax Procedure Act rests with the borrower and not the lender. The Respondents position is that the Business Laws (Amendment) Act, 2024 and the Central Bank of Kenya (Digital Credit Providers) Regulations, 2022 post-date the transactions and cannot be applied retrospectively. 14. As regards section 6(4) of the MPSRA, the respondents submitted that the provision is constitutional and sought to rely on the decision in **Law Society of Kenya v Attorney General & Another [2019]KESC16(KLR)** and that the Petitioners have not identified with specificity the constitutional provisions said to be contravened. 15. The Respondents argued that Articles 27 and 40 of the Constitution of Kenya, 2010 are not engaged, as differentiated security terms across borrowers reflect ordinary risk-based commercial practice rather than discrimination, and as the Petitioners voluntarily executed the securities with the benefit of legal advice, in consideration for the Credit Facilities, such that realisation of security upon default cannot amount to arbitrary deprivation of property. 16. The Respondents urged that, the Petitioners having admittedly received and utilised USD 17,000,000/=, the doctrine of unjust enrichment as affirmed in **Chase International Investment Corporation and Another v Laxman Keshra and 3 Others [1978]KECA 7 (KLR)** and **National Bank of Kenya Ltd v Anaj Warehousing Ltd[2015]KESC 4(KLR)** entitles the Respondents, at the very least, to restitution of the principal sum, and that the conservatory orders ought to be discharged. **Issues for Determination** 1. Having considered the pleadings and the submissions of the parties, I distil the issues for determination as being: 2. **Whether this Court has jurisdiction to hear and determine the Petition.** 3. **Whether the Petition meets the constitutional threshold of precision established in Anarita Karimi Njeru v Republic [1979] KEHC 30 (KLR).** 4. **Whether the Respondents have locus standi to institute or sustain proceedings, or to be sued, in Kenya;** 5. **Whether the Respondents were required, under the Companies Act, the Banking Act, the Bill of Exchange Act, the Foreign Investment Protection Act and the Tax Procedure Act, to register or obtain licences prior to or in the course of the impugned transactions, and the legal consequence of any established non-compliance;** 6. **Whether section 6(4) of the Movable Property Security Rights Act, 2017 is unconstitutional;** 7. **Whether the impugned transactions and securities violated Articles 27, 40 and 46 of the Constitution;** 8. **Whether the transactions and securities are null and void ab initio;** 9. **Whether the doctrine of unjust enrichment applies;** **Analysis and Determination** 1. **Whether this Court has jurisdiction to hear and determine the Petition** 2. It is trite law that jurisdiction is everything. As Nyarangi JA observed in **Owners of the Motor Vessel “Lillian S" v Caltex Oil (Kenya) Ltd [1989] KECA 48 (KLR)**, a court without jurisdiction must down its tools the moment it becomes aware of that fact. This Court, exercising its jurisdiction under Articles 23, 165(3) (b) and 165(3)(d) of the Constitution of Kenya 2010, has already pronounced itself definitively on the question of jurisdiction in the ruling of 14th August 2025, finding that the Petition raises genuine public law questions. 3. The court determined that the legal status and capacity of the Respondents and the constitutionality of section 6(4) of the MPSRA are not amenable to determination by a private arbitral tribunal seated in Singapore. That finding was not disturbed, the appeal against it having been overtaken by the parties' consent of 11th February 2026 subsuming the interlocutory application into the substantive Petition. 4. The Court reaffirms that it is seized of jurisdiction to hear and determine the Petition in its entirety, including the constitutional validity of section 6(4) of the MPSRA, a question that, in any event, only this Court (and not an arbitral tribunal) may competently determine. 5. **Whether the Petition meets the constitutional threshold of precision established in Anarita Karimi Njeru v Republic** 6. The threshold for constitutional petitions was stated in the **Anarita Karimi Njeru** case (supra), whose holding was endorsed by the Court of Appeal in **Matemu v Trusted Society of Human Rights Alliance & 5 others [2013] KECA 445 (KLR). The said decisions** require a Petitioner to set out, with reasonable precision, the provisions of the Constitution said to be infringed and the manner of infringement. 7. The Respondents have taken the position that several of the allegations of constitutional violations are pleaded in an omnibus and imprecise fashion, most notably the invocation of Articles 10(2)(a) and (b) of the Constitution of Kenya, 2010 which bind State organs and persons applying or interpreting law or public policy, and are not self-evidently engaged merely because a private commercial counterparty is said to have failed to comply with a registration statute. 8. That said, it is evident that certain limbs of the Petition, in particular those concerning Article 40 of the Constitution of Kenya, 2010 as it relates to the registration of a mortgage and charge against the 1st Petitioner's assets by an entity whose legal capacity to hold such a security right is disputed, and the direct constitutional challenge to section 6(4) of the MPSRA under Articles 2(4) and 10 of the Constitution of Kenya, 2010, are pleaded with sufficient particularity to establish the threshold of a Constitutional Petition. That being the case, I find and hold that the threshold was met and that the Petition filed herein does not offend the doctrine of precision in constitutional litigation. 9. **Whether the Respondents have locus standi to institute or sustain proceedings, or to be sued, in Kenya** 10. The Petitioners contend that an entity not registered under sections 974, 975(4), and 979 of the Companies Act is a 'non-existent person' incapable of suing, being sued, or holding enforceable rights in Kenya. This is denied by the Respondents. What is the proper legal position? 11. In my view, the legal personality of a foreign company is rooted in the entity's incorporation in its home jurisdiction and not in any subsequent registration in Kenya. In **Bruton Gold Trading LLC v Amadi (t/a Amadi Associates Advocates) & 6 others [2025] KEHC 12657 (KLR)**, the court held that section 974 of the Companies Act does not create legal personality but regulates the separate question of whether a foreign company may lawfully carry on business in Kenya without registration. Gikonyo, J, was categorical that: ***“Flowing from the above, legal personality or existence of a foreign company is not necessarily given through registration under Part XXXVII – Foreign Companies- of the***[***Companies Act***](https://new.kenyalaw.org/akn/ke/act/2015/17)***. A refresher of class 101 on Company Law is that, upon incorporation in the country of origin, the foreign company becomes a legal person. See Salomon vs. Salomon & Co Ltd.”*** 1. The same position was also taken in **Mission SOS International Incorporated v Mission SOS Africa INC & 4 others [2024] KEHC 9498 (KLR)** and in **Superon Schweisstechnik India Ltd v Oxychem Africa Limited; Registrar of Trademarks (Interested Party) [2025] KEHC 8298 (KLR)**, both of which confirm that locus standi arises from a party's interest in the subject matter of a dispute, and is not conditional upon registration under the Companies Act, 2015. 2. This Court accordingly finds that the Respondents, being validly incorporated bodies corporate in Singapore and Mauritius respectively, and being parties with a direct proprietary and contractual interest in the promissory notes and securities in issue, possess locus standi to defend this Petition and, subject to the findings below on carrying on business, to enforce their rights under the transaction documents in question. 3. The court notes that the Petitioners appear to have approbated and reprobated the question of standing. The Petitioners sued the Respondents, presumably because the Respondents acknowledged they could be sued in their corporate names. I believe due diligence was done, or ought to have been done, prior to filing the matter to determine the status of the Respondents. The same Petitioners cannot then argue that Respondents lack standing to appear and answer that very suit; such a position offends the doctrine that a litigant may not approbate and reprobate. **Royal Ngao Holdings Limited v N K Brothers Limited & another [2021] KEHC 275 (KLR**) is instructive in that regard. With respect to the Petitioners, they appear to be having their cake and eating it. 4. The authorities relied upon by the Petitioners for the contrary proposition are not sound. The case of **Kimanthi Muiu v. Africa Nazarene University [2021] eKLR** cited by the Petitioner is not on the Kenya Law Reports database, and the holding attributed to it cannot be verified by this Court. The decision of **Global Tours & Travel Ltd v Five Continents Stationers Ltd & Another [2015] eKLR**, on the other hand, was concerned with locus standi to present a winding-up petition premised on creditor status, and did not pronounce itself on the capacity of unregistered foreign companies to sue. 5. Counsel should be reminded of their duty of candour to the Court in the citation of authority; submissions containing untraceable or misplaced authorities are accorded no weight. 6. **Whether the Respondents were required, under the Companies Act, the Banking Act, the Bill of Exchange Act, the Foreign Investment Protection Act and the Tax Procedure Act, to register or obtain licences prior to or in the course of the impugned transactions, and the legal consequence of any established non-compliance** 7. Section 974(1) of the Companies Act, 2015 prohibits a foreign company from 'carrying on business' in Kenya without registration, and section 974(2) defines 'carrying on business', for these purposes, to include offering debentures in Kenya or acting as guarantor of debentures offered in Kenya. 8. On the facts and evidence presented to the honourable court, it was the 1st Petitioner, not the Respondents, that issued the promissory notes, executed the account charges, and provided the securities. The Respondents were the lenders and secured creditors who received those instruments, not entities offering debentures or acting as guarantors of debentures in Kenya. 9. The Petitioners' attempt, at paragraphs 107 to 109 of their submissions, to import the wider definition of 'debenture' under the Income Tax Act into section 974 of the Companies Act is misconceived; the Companies Act provides its own definition for its own purposes. 10. On a plain and purposive construction of section 974 of the Companies Act, the Respondents did not 'carry on business in Kenya' within the narrow statutory meaning, so the registration requirement did not arise on the pleaded facts. 11. Sections 3 and 4 of theBanking Act, 2010 restrict the transaction of 'banking business' or 'financial business' to licensed institutions. 'Financial business' is statutorily defined to require both the acceptance of money on deposit from members of the public and the employment of such deposited funds by lending or investment. 12. From the Pleadings, facts and evidence presented before the court, there is no evidence that the Respondents accept deposits from the Kenyan public; on the contrary, the material before the Court indicates that the Respondents are special-purpose lending vehicles deploying their own or syndicated capital sourced from an international investor. 13. That being the case, the business of the Respondents falls squarely outside the statutory definition of financial business, as was held in the analogous circumstances considered in **Momentum Credit Limited v Kabuiya [2022] KEHC 13705 (KLR),** where a non-deposit-taking lender was found not to be a 'financial institution' for purposes of the Banking Act. 14. The Business Laws (Amendment) Act, 2024 and the Central Bank of Kenya (Digital Credit Providers) Regulations, 2022, introduced a registration regime for non-deposit-taking credit providers, predating, in material part, the transactions in issue (December 2022 and January 2024) and, in any event, contain no express or necessarily implied intention to operate retrospectively. The cases of **Macharia & another v Kenya Commercial Bank Ltd & 2 others [2012] KESC 8 (KLR); JOO v MBO & 2 others [2023] KESC 4 (KLR)** are instructive. In my view the Petitioners' reliance on this later legislation to impugn transactions substantially predating it cannot succeed. 15. Section 20 of the Bill of Exchange Act addresses the capacity of a corporation to be a party to a bill by reference to its capacity to contract 'under the law for the time being in force relating to corporations'. That is, the law of the place of incorporation, not a requirement of Kenyan registration. The Respondents' capacity to execute the promissory notes falls to be assessed by reference to Singaporean and Mauritian corporate law, respectively, under which their capacity is not disputed. Therefore, this ground of the Petition fails. 16. Section 3 of the Foreign Investment Protection Act provides for an application for a Certificate that the enterprise in which the assets are proposed to be invested is an approved enterprise. The certification regime under section 3 is, on the plain wording of the Act, permissive ('may apply') and confers optional statutory protections upon a foreign investor; it does not condition the validity or enforceability of a foreign loan upon the grant of a certificate, and no penal or invalidating consequence attaches to its absence. Therefore, this ground of the Petition fails. 17. A person who has accrued a tax liability is mandated to apply to the Commissioner to be registered pursuant to Section 3 of the Tax Procedure Act. However, withholding tax obligations on interest paid to a non-resident lender are statutorily imposed upon the resident payer, the 1st Petitioner in this case, to deduct and remit. The absence of registration by the Respondents does not establish a free-standing precondition to the capacity of the Respondents to lend or to hold security, nor does the Petitioners' pleaded case establish an accrued Kenyan tax liability on the Respondents distinct from the withholding obligations of the borrower. 18. Therefore, on a careful application of the specific statutory definitions, undifferentiated characterisation of the transactions and the position taken by the Petitioners, the Respondents were under a mandatory obligation to register or obtain licences in Kenya prior to or during the subsistence of the impugned transactions. This then implies that the Respondents lacked the capacity to contract, take security, or enforce their rights. This position is misinformed and fails. 19. **Whether section 6(4) of the Movable Property Security Rights Act, 2017 is unconstitutional** 20. There is a rebuttable presumption of constitutionality attaching to every legislative enactment, and the burden of demonstrating inconsistency with the Constitution lies upon the party asserting it, as was held in the case of **Law Society of Kenya v Attorney General & another [2019] KESC 16(KLR).** The proper method of inquiry is to place the impugned provision alongside the Constitution, examining both its purpose and its effect, as was held in **Katiba Institute & 8 others v Director of Public Prosecutions & 2 others [2024] KEHC 2890(KLR)**. 21. Section 6(4) of the Moveable Property Security Rights Act, 2017 provides that a security agreement entered into in accordance with the section is enforceable and creates a security right irrespective of satisfaction of the requirements that may be imposed by any other written law. 22. The legislative purpose of this provision, in my view, is to insulate the core proprietary security right created between the grantor and the secured creditor from collateral, often unrelated, statutory formalities like stamp duty compliance that do not go to the existence of the underlying secured obligation. 23. This is a legitimate and unremarkable feature of secured transactions. They are designed to promote certainty and the free flow of credit, and do not, without more, sanction illegality; a security agreement remains at all times subject to the requirement in section 6(3) of the Act that it be in writing, identify the grantor and secured creditor, and describe the secured obligation and collateral. 24. Given the finding hereinabove that the Respondents were not, in fact, required to be registered under the statutes relied upon, the Petitioners' complaint that section 6(4) unconstitutionally 'cures' the Respondents' non-registration falls away for want of a factual foundation. In any event, section 6(4) of the MPSR Act does not purport to deem an unidentifiable or non-existent creditor to be a valid holder of a security right; it merely provides that satisfaction of the formalities of other statutes is not a precondition to the enforceability of an otherwise validly created security interest. 25. Therefore, it does not offend Article 2(4) of the Constitution of Kenya, 2010, and it does not authorize arbitrary deprivation of property contrary to Article 40(2) of the Constitution of Kenya, 2010. Realization of security remains subject to the ordinary law of contract, equity and the MPSRA's own procedural safeguards upon default. In light of the foregoing, it is my view that the presumption of constitutionality is not rebutted. The prayer for a declaration that section 6(4) of the MPSRA is unconstitutional is thus misplaced and is accordingly declined. 26. **Alleged violation of Articles 27, 40 and 46 of the Constitution of Kenya, 2010.** 27. On the alleged violation ofArticle 27 of the Constitution, it is my view that a claim of unconstitutional discrimination must identify the protected class or ground relied upon and demonstrate an absence of objective and reasonable justification for the differential treatment **(see Gichuru v Package Insurance Brokers Ltd [2021] KESC 12 (KLR); Mohammed Abduba Dida v Debate Media Limited & another [2018] KECA 642) (KLR)).** 28. The Petitioners' claim that other borrowers were extended more lenient security packages does not identify any ground enumerated under Article 27(4), nor does it engage with the self-evident commercial reality that security requirements in lending are done in alignment with the lender's assessment of risk, tenor, currency, collateral quality and the borrower's credit profile. 29. In my view, differentiated security terms across a portfolio of borrowers, without more, do not amount to unconstitutional discrimination. This limb of the Petition fails. 30. Regarding Article 40 of the Constitution of Kenya, 2010, the right to property does not immunize a charger who has voluntarily executed security instruments from the ordinary consequence that the secured property may be realized upon default; a party who offers property as security does so 'on the understanding that it stands the risk of being realized by the lender in the event of default. See **Julius Mainye Anyega v Ecobank Kenya Limited [2014] KEHC 8730 (KLR).** 31. The 2nd to 4th Petitioners voluntarily executed the personal guarantees, share pledges and ancillary instruments, with the benefit of legal advice, in consideration for the disbursement of US$ 17,000,000. There is no arbitrary deprivation of property within Article 40(2) of the Constitution of Kenya, 2010, where the deprivation, if any, arises from a contractually agreed and voluntarily assumed obligation triggered by the Petitioners' own default, rather than from unilateral or unlawful state or private action. 32. Article 46 of the Constitution of Kenya, 2010 provides for Consumer protection. The Consumer Protection Act is principally directed at redressing the structural imbalance between suppliers and ordinary consumers of goods and services. The 1st Petitioner is a borrower that sought and negotiated US$17,000,000 in structured finance and was represented throughout by legal counsel. 33. On the pleaded facts, the transaction does not fall within the mischief that Article 46 of the Constitution of Kenya, 2010, and the Consumer Protection Act were enacted to address, and the Petitioners have not particularized, with precision, how the specific protections in Article 46(1) (a) to (d) were infringed. This limb, too, fails. 34. **Whether the transactions and securities are null and void ab initio;** 35. The Petitioners have sought to rely on the maxim that an illegal transaction cannot found a cause of action. They cited the case of **Macfoy v United Africa Co Ltd [1961] 3 All ER 1169 and the maxim, ex turpi causa non oritur actio**, as applied in **Kenya Airways Limited v Flora [2013] KECA 545 (KLR), and Patel v Mirza [2016] UKSC 42.** These are landmark authorities, but they are of no assistance to the Petitioners once the necessary premise that the Respondents' participation in the transactions was itself unlawful for want of registration or licensing has not been established, for the reasons given hereinabove. 36. Without proven illegality, the Petitioners cannot turn around to seek the court's declaration on the validity of the promissory notes, guarantees, charges or other securities. Therefore, the prayer for declarations of nullity in respect of the Contracts and the securities is accordingly misplaced. 37. **Whether the doctrine of unjust enrichment applies;** 38. Although the finding above renders this issue largely academic, the Court observes, for completeness, that even had illegality been established, the doctrine of unjust enrichment would ordinarily require restitution of the principal sums advanced and received. 39. The elements of the doctrine of unjust enrichment, corresponding detriment, and the injustice of retention as was referenced to in **Chase International Investment Corporation and Another v Laxman Keshra and 3 others [1978] KECA 7(KLR)** are squarely met on the Petitioners' own pleaded admission that they received and utilized US$ 17,000,000. 40. The Supreme Court's approach in **National Bank of Kenya Ltd v Anaj Warehousing Ltd [2015] KESC 4(KLR),** where a technical defect in the execution of security documents was held not to entitle a borrower to retain loan proceeds without repayment is instructive and would, had the Petitioners succeeded in regard to their argument that there was an illegality, have entitled the Respondents to restitution of the principal sums, with reasonable interest, notwithstanding any nullity of the securities themselves. **Disposition** 1. For the reasons set out above, the following orders issue: 2. **A declaration is hereby issued that section 6(4) of the Movable Property Security Rights Act, 2019 is not unconstitutional;** 3. **A declaration is issued that the Respondents have capacity to institute, defend and sustain proceedings, to enter and sign a contract and register securities in the Republic of Kenya, independent of registration under section 974 of the Companies Act;** 4. **The conservatory orders issued on 19th February 2025 and confirmed on 11th February 2026 are hereby discharged, and the Petition dated 19th February 2025 is hereby dismissed with costs to the Respondents.** **Dated** and **signed in Nairobi, this 9th day of July 2026.** **Gregory Mutai** **JUDGE** **In the presence of:** Mr **Charles Madowo,** for the **Petitioners**; Mrs **Gatheru**, with Mr **Obonyo** and Mr **Omollo** for the **Respondents; and** Miss **Neema Lwambia – Court Assistant.**