[2022] KEHC 11580 (KLR)

Maina v Francis & 10 others (Civil Suit E112 of 2021) [2022] KEHC 11580 (KLR) (Commercial and Tax) (19 May 2022) (Ruling)

Neutral citation: [2022] KEHC 11580 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Commercial and Tax

Civil Suit E112 of 2021

A Mabeya, J

May 19, 2022

IN THE MATTER OF THE ARBITRATION ACT CAP 49, LAWS OF KENYA AND IN THE MATTER OF THE DISPUTE BETWEEN

Between

Samuel Thenya Maina

Applicant

and

Brian Martin Francis

1st Respondent

Estate of Hiram Ngaruiya

2nd Respondent

Isaac Njoroge Gitoho

3rd Respondent

James Njuguna Gitoho

4th Respondent

Krisco Holdings Limited

5th Respondent

Muiboro Enterprises Limited

6th Respondent

KCB Bank Kenya Limited

7th Respondent

Kemboy Law Advocates LLP

8th Respondent

Njeri Benson Ngugi

9th Respondent

Igeria Arthur Konye

10th Respondent

Njoroge David Ngumbu t/a Igeria & Ngugi Advocates

11th Respondent

Ruling

1. This is a ruling on a motion on notice dated 2/9/2021 by the 7th, 9th, 10th and 11th respondent. It was brought under section 5(1) of the Judicature Act and section 3A of the Civil Procedure Act.

2. The application sought orders that the 8th respondent be found to be in contempt of this court’s order of 8/4/2021 and be penalized with a fine of Kshs 5,000,000/=. That consequently, the 8th respondent be committed to civil jail for a period of 6 months. In the alternative, the application sought that the 8th respondent be compelled to fully comply with the orders of 8/4/2021.

3. The application was supported by the affidavit of Benson N Ngugi sworn on 2/9/2021. The grounds were that the 8th respondent had filed a suit against the 9th, 10th and 11th respondents in High Court Civil Suit No. 21 of 2020 (formerly suit no 233 of 2019) Bilha W Mwangi & Anor vs Njeri Benson Ngugi & 2 others seeking orders for enforcement of a professional undertaking (“PU”) for the sum of Kshs 102,378,022. 98/= plus costs and interests.

4. The undertaking had been issued on behalf of the 7th respondent and their client who is the applicant in this suit. The PU was in respect of a transaction involving the purchase of property known as Ad Life plaza. The suit was determined in favour of the 8th respondent and the defendant in that suit was directed to submit the said sums.

5. Before the 9th, 10th and 11th respondent, could effect payment of the decretal amount through the 7th respondent, the instant suit was filed and joined the 7th, 9th, 10th and 11th respondents. The court then directed that the 7th, 9th, 10th and 11th respondent should not remit the sums to the 8th respondents. Those orders were duly served upon all respondents including the 8th respondent. They were subsequently extended in the presence of all parties including the 8th respondent on 8/4/2021, 24/5/2021 and 29/6/2021, respectively.

6. In contravention of the said orders, the 8th respondent appointed Hariki auctioneers who served the 9th-11th respondent with warrants of attachment dated 18/8/2021 and a proclamation dated 30/8/2021 wherein the auctioneers proclaimed the 9th-11th respondent’s tools of trade to recover Kshs 146,105,692. 90/=. That the 8th respondent’s action was directly in contravention of the said orders and amounted to contempt.

7. The 1st to 6th and 8th respondent filed a notice of preliminary objection dated 15/9/2021. On 16/9/2021, this court directed that the preliminary objection be heard as part of the grounds of opposition to the application.

8. The objection was that; this court lacked jurisdiction to entertain the application to stay or interfere with the execution of the judgment of another court of equal jurisdiction in a freshly filed suit. That no orders had been issued staying the execution of judgment in HCCC No 21 of 2020 to warrant the orders sought and that the orders issued herein did not restrain the court of concurrent jurisdiction from execution of its own judgment.

9. That this court lacked jurisdiction to permit the applicant to disregard orders of a court of equal jurisdiction. That no penal notice was appended to the order allegedly disobeyed, that the order did not require the 8th respondent to do anything or refrain from doing anything, that the order only restrained the 7th, 9th, 10th and 11th respondent from releasing a sum of Kshs 102,378,022. 98/= held by the 7th respondent. That no order had been served on the 8th respondent.

10. The parties made oral submissions on 16/9/2021 which the court has carefully considered.

11. This application was brought under section 5 of the Judicature Act which provides as follows;“(1) The High Court and the Court of Appeal shall have the same power to punish for contempt of court as is for the time being possessed by the High Court of Justice in England, and that power shall extend to upholding the authority and dignity of subordinate courts.”

12. In Samuel M N Mweru & Others v National Land Commission & 2 others[2020] eKLR, the court held that: -“Therefore, the law that governs contempt of court proceedings is the English law applicable in England at the time the alleged contempt is committed. Section 5 of the Judicature Act imposes a duty on the High Court, the Court of Appeal and law practitioners to ascertain the applicable law of contempt in the High Court of Justice in England, at the time the application is brought.”

13. The record shows that on 1/3/2021, an order was issued directing the 7th, 9th, 10th and 11th respondent not to remit the sum claimed to the 8th respondent. The orders were extended on 8/8/2021, 8/4/2021, 24/5/2021 and 29/6/2021. During the mention of 8/3/2021, Mr Kingara, Advocate for the 8th respondent was present and he opposed the extension. Counsel could not have opposed and order his client was unaware of. Even in the subsequent extensions, the 8th respondent was represented by counsel.

14. The purpose of service of process is to notify the other party of such process. The 8th respondent was always aware of the existence and nature of the orders of 1/3/2021. He was also aware of the subsequent extensions. Accordingly, service of the order cannot be a serious challenge to the application at hand.

15. It is not in dispute that the 8th respondent instructed auctioneers who proceeded to issue the applicants with warrants of attachment and proclamation dated 18th and August 30, 2021. They seek to recover a sum of Kshs 146,105,692. 90 being the decretal sum in the aforementioned suit. The order of 1/3/2021 had restrained the 7th, 9th, 10th and 11th respondent from remitting the sum of Kshs 102,378,022. 98 plus costs and interest to the 8th respondents. This is the amount which the 8th respondent was attempting to recover.,

16. The order of 1/3/2021 was issued after the court comprehended the previous suit. There is an ongoing arbitration which touches on the amount of Kshs 102,378,022. 98. That is the amount this suit seeks to ringfence pending the said arbitration. The funds are the substratum of this suit and the effect of the order is that the funds are not available for execution.

17. Consequently, no attachment or execution of the funds can be levied pending the determination of the suit. The actions of the 8th respondent relating to the issuing of instruction to auctioneers to serve warrants of attachment and proclamation notices was therefore in direct contravention of the said order of 1/3/2021. The said warrants and proclamation are in the premises a nullity.

18. The 8th respondent’s preliminary objection dated 15/9/2021 which summed up as the grounds of opposition is not merited. The grounds raised on jurisdiction is res judicata as this court had already ruled on its jurisdiction to entertain this suit vide its ruling of 8/4/2021.

19. The contention that the orders did not directly restrain the 8th respondent from doing anything is ill founded. The 8th respondent was well aware that the effect of the order was that the decretal sum was not available for execution. Any action towards execution was therefore null.

20. In Samuel M N Mweru & Others v National Land Commission & 2 others [2020] eKLR, it was firmly put that: -“It is essential for the maintenance of the rule of law and order that the authority and the dignity of courts is upheld at all times. The court will not condone deliberate disobedience of its orders and will not shy away from its responsibility to deal firmly with proved contemnors. It is the plain and unqualified obligation of every person against, or in respect of whom, an order is made by a court of competent jurisdiction, to obey it unless and until that order is discharged. The uncompromising nature of this obligation is shown by the fact that it extends even to cases where the person affected by an order believes it to be irregular or void. It is the duty of the court not to condone deliberate disobedience of its orders nor waiver from its responsibility to deal decisively and firmly with contemnors.The court does not, and ought not be seen to make orders in vain; otherwise the court would be exposed to ridicule, and no agency of the constitutional order would then be left in place to serve as a guarantee for legality, and for the rights of all people... It is a crime unlawfully and intentionally to disobey a court order. This type of contempt of court is part of a broader offence, which can take many forms, but the essence of which lies in violating the dignity, repute or authority of the court. The offence has in general terms received a constitutional ‘stamp of approval, since the rule of law – a founding value of the Constitution – ‘requires that the dignity and authority of the courts, as well as their capacity to carry out their functions, should always be maintained.’

21. I echo the foregoing here. The order of 1/3/2021 was not made in vain. The 8th respondent’s attempt to execute was an intentional attempt to undermine the integrity of this court, and was aimed at defeating the entire purpose of this suit before it is determined on merit.

22. Be that as it may, the law in England requires that the order served do have a notice of penal consequences appended thereon. It is only then that a party can be punished for contempt. The service of the order with a notice of penal consequences was not established in this case. in the circumstances, I will not hold the 8th respondent to be in contempt and therefore liable to sanctions. Instead, I will grant the alternative prayer.

23. Accordingly, the application dated 2/9/2021 is allowed on the following terms: -a. The warrants of attachment dated 18/8/2021 and the proclamation dated 30/8/2021 and any consequential actions streaming from the attachment and proclamation are declared null and void.b. Prayer 6 of the application is allowed as prayed.c. Costs of the application are awarded to the applicants.It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 19TH DAY OF MAY, 2022. A. MABEYA, FCIArbJUDGE