[2022] KEHC 3097 (KLR)

Mabati Rolling Mills Limited v Civicon (K) Limited; AEA Limited & another (Objector) (Civil Suit 295 of 2018) [2022] KEHC 3097 (KLR) (Civ) (17 May 2022) (Ruling)

Neutral citation: [2022] KEHC 3097 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Civil

Civil Suit 295 of 2018

JK Sergon, J

May 17, 2022

Between

Mabati Rolling Mills Limited

Plaintiff

and

Civicon (K) Limited

Defendant

and

AEA Limited

Objector

Equity Bank (Kenya) Limited

Objector

Ruling

1. The 1st and 2nd objectors herein have brought the Notice ofMotions dated 18th January, 2021 (“the first application”) and 20th January, 2021 (“the second application”) respectively, under the provisions; inter alia; of Order 22, Rule 51, 52 and 45 of the Civil Procedure Rules.

2. The first application is supported by both the grounds laid out on the body thereof and the facts stated in the affidavit of Nicholus Kithinji, and seeking the following orders:i.Spent.ii.That a temporary order of stay be and is hereby issued staying the execution, attachment and sale of motor vehicles registration numbers KCC 548E, KCC 536E, KCE 455T, KCC 946L, KCN 367N, KCN 378N, KHMA 916B, KCD 825T, KBU 406R, KAH 652X, KBU 409R, KCE 422T and KBL 902Z and other movable properties particularized in the schedules to Notices of Proclamation dated 16th March, 2021 issued by ICON AUCTIONEERS on the instructions of the plaintiff herein as per the Warrants of Attachment issued on 4th November, 2021 and recently extended to 20th January, 2022 whether by themselves of their representatives, servants, agents and/or assigns or howsoever acting and the same be released to the objector pending the hearing and determination of the objector proceedings.iii.That the decree holder through his agents including ICON AUCTIONEERS or any other Auctioneers, whether by themselves of their representatives, servants, agents and/or assigns or howsoever acting be precluded from proclaiming or having proclaimed, from attaching, auctioning or selling the objector’s motor vehicles and other movable properties particularized in the schedules to Notices of Proclamation dated 16th March, 2021. iv.That the costs of the application be provided for.

3. The second application is supported by the grounds laid out on its face and the facts stated in the affidavit of Kariuki Kingori. The orders sought therein are:i.Spent.ii.That a temporary order of stay be and is hereby issued staying the execution of the proclaimed motor vehicles attached by the 1st respondent and Icon Auctioneers, whether by themselves of their representatives, servants, agents and/or assigns or howsoever acting pending the hearing and determination of the objector proceedings.iii.That the 1st respondent through his agents including Icon Auctioneers or any other Auctioneers, whether by themselves of their representatives, servants, agents and/or assigns or howsoever acting be precluded from proclaiming or having proclaimed, from attaching, auctioning or selling the objector’s equipment in answer to the order of this Honourable Court.iv.That the costs of the application be provided for.

4. The plaintiff/1st respondent filed the replying affidavits each sworn by Antony Miring’u Kung’u on 17th February, 2022 to oppose both applications, to which Nicholus Kithinji rejoined with a supplementary affidavit.

5. The defendant/2nd respondent did not at all participate at the hearing of the Motion.

6. At the hearing of the two applications, the parties’ respective advocates made brief oral arguments.

7. I have considered the grounds laid out on the face of the firstand second applications; the facts deponed in the affidavits supporting and resisting the applications; and the rival oral arguments.

8. A brief background of the matter is that at the onset, the 1st respondent instituted the suit against the 2nd respondent and sought the sum of Kshs.19,606,549. 73 plus costs of the suit and interest thereon arising out of a breach of contract.

9. Subsequently, the parties proceeded for mediation and a mediation agreement was entered into by consent of the parties and adopted as an order of the court on 20th July, 2020 and issued on 1st October, 2020 under the terms that the abovementioned sum would be payable by the 2nd respondent to the 1st respondent in line with the timelines set out in the consent order.

10. It is upon the 1st respondent setting in motion the execution proceedings that the 1st and 2nd objectors brought the instant applications.

11. It is clear that both applications concern themselves with the granting of an order for a stay of execution of the decree pending the objection proceedings. I will therefore address the applications contemporaneously.

12. For the 1st objector, it is stated and submitted that it has a legal and/or equitable interest in the motor vehicles listed in the first application and which the 1st respondent intends to sell.

13. The 1st objector states and submits that it had entered into an agreement for sale with the 2nd respondent and had paid consideration in the sum of Kshs.200,000,000/ thereby conferring the title in goods of the motor vehicles to the 1st objector.

14. It is therefore the submission by the 1st objector that unless the attachment and/or sale of the motor vehicles is stayed pending the objection proceedings, is stands to suffer the risk of losing title to the said motor vehicles and hence suffering loss.

15. In retort, the 1st respondent states and submits that the 1st objector has not brought any evidence to indicate that the ownership of the motor vehicles in question was transferred to it and that going by the agreement annexed to the first application, there is no evidence of an RTGS transfer being made by the 1st objector.

16. The 1st respondent adds that the agreement dated 12th June, 2019 and annexed to the first application does not specify the motor vehicles or equipment which constituted the subject of the transaction.

17. In respect to the second application, the 2nd objector has essentially echoed the averments made by its counterpart and states that it has a legal and equitable interest in the motor vehicles registration numbers KCC 548E, KCC 536E, KCE 455T, KCC 946L, KCN 367N, KCN 378N, KCD 825T and KCE 422T and that the said motor vehicles are jointly registered in the names of the 2nd objector and the 2nd respondent.

18. The 2nd objector further states that it has so far entered into various financial obligations with third parties where it has applied the abovementioned motor vehicles as security and hence it is entitled to a grant of the orders sought in the second application.

19. The 1st respondent retorts by stating and submitting that the 2nd objector has not demonstrated that it has any legal or equitable interest in the goods in question and hence the second application is similarly deserving of dismissal.

20. Upon my perusal of the record and documents annexed to the respective applications, I am satisfied that both the 1st and 2nd objector have demonstrated the existence of a legal and/or equitable interest in the attached goods as per the Proclamation Notices dated 16th March, 2021.

21. In view of the foregoing circumstances, I find that it would be in the interest of substantive justice to grant the order for a temporary stay of execution in respect to the listed attached goods until such time as the objection proceedings are heard and determined.

22. In the end therefore, the Notice of Motion dated 18th January, 2021 and 20th January, 2021 are hereby allowed in terms of orders (ii) and (iii) therein, limited to the temporary orders for a stay of execution.

23. Consequently:i.There shall be a temporary order of stay of execution, attachment and sale of motor vehicles registration numbers KCC 548E, KCC 536E, KCE 455T, KCC 946L, KCN 367N, KCN 378N, KHMA 916B, KCD 825T, KBU 406R, KAH 652X, KBU 409R, KCE 422T and KBL 902Z and other movable properties and equipment particularized in the schedules to Notices of Proclamation dated 16th March, 2021 issued by ICON AUCTIONEERS on the instructions of the plaintiff herein as per the Warrants of Attachment issued on 4th November, 2021 and recently extended to 20th January, 2022 whether by themselves of their representatives, servants, agents and/or assigns pending the hearing and determination of the objector proceedings.ii.The 1st and 2nd objectors shall take a date before the Deputy Registrar on priority basis, with the purpose of fixing a date for the objector proceedings within 21 days.iii.Costs of the application to abide the outcome of the objector proceedings.

DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOFT TEAMS AT NAIROBI THIS 17TH DAY OF MAY, 2022. J. K. SERGONJUDGEIn the presence of:……………………………. for the Plaintiff/1st Respondent...for the Defendant/2nd Respondent...for the 1st Objector/Applicant…………………………… for the 2nd Objector/ApplicantNAIROBI HIGH COURT CIVIL SUIT NO. 295 OF 2018 0