[2008] KEHC 2388 (KLR)

[2008] KEHC 2388 (KLR)

The court held that the Plaintiffs must first prove the indebtedness of the fourth Defendant before the indemnity obligation of the first to third Defendants can be enforced. The mere allegation of default by the fourth Defendant is insufficient to crystallize the indemnity liability. The Defence raised by the Defendants is reasonable and not frivolous, warranting a full trial. Additionally, the court found that the application to dismiss the Defence was procedurally incompetent, as Order VI rule 13 of the Civil Procedure Rules only allows for striking out pleadings, not dismissal. Consequently, the Chamber Summons seeking dismissal of the Defence and entry of judgment for the Plaintiff...

Citation
[2008] KEHC 2388 (KLR)
Parties
Plaintiff: Mercantile Life & General Assurance Company Ltd.; Plaintiff: Mohammad Hassim Pondor (Suing on behalf of The International Air Transport Association – IATA); Defendant: Dilip M. Shah; Defendant: Pankaj Meghji Shah; Defendant: Kamal M. Shah; Defendant: Five Continents Travel Limited
Court
High Court
Court Station
High Court at Nairobi (Milimani Commercial Courts)
Jurisdiction
Kenya
Judgment Date
13 June 2008
Case Number
Civil Case 550 of 2006
Procedural Posture
Civil Case / Ruling on Chamber Summons to Dismiss Defence and Enter Judgment
Outcome
Application dismissed; no order as to costs.
Judges
CM Kariuki
Legal Topics
Indemnity Liability, Directors Duties, Striking Out Pleadings, Locus Standi
Source Language
English
Commercial and Corporate Civil Procedure Indemnity Liability Directors Duties Striking Out Pleadings Locus Standi

Case Brief

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Parties

Mercantile Life & General Assurance Company Ltd.

Plaintiff

Mohammad Hassim Pondor (Suing on behalf of The International Air Transport Association – IATA)

Plaintiff

Dilip M. Shah

Defendant

Pankaj Meghji Shah

Defendant

Kamal M. Shah

Defendant

Five Continents Travel Limited

Defendant

Procedural Posture

Civil Case / Ruling on Chamber Summons to Dismiss Defence and Enter Judgment

Legal Issues

  1. 1 Whether the first to third Defendants' liability to indemnify the first Plaintiff has crystallized under the Deeds of Indemnity.
  2. 2 Whether the Defence of the first to third Defendants should be dismissed and judgment entered for the Plaintiff as prayed.
  3. 3 Whether the application to dismiss the Defence is competent under Order VI rule 13 of the Civil Procedure Rules.

Ratio Decidendi

The court held that the Plaintiffs must first prove the indebtedness of the fourth Defendant before the indemnity obligation of the first to third Defendants can be enforced. The mere allegation of default by the fourth Defendant is insufficient to crystallize the indemnity liability. The Defence raised by the Defendants is reasonable and not frivolous, warranting a full trial. Additionally, the court found that the application to dismiss the Defence was procedurally incompetent, as Order VI rule 13 of the Civil Procedure Rules only allows for striking out pleadings, not dismissal. Consequently, the Chamber Summons seeking dismissal of the Defence and entry of judgment for the Plaintiff...

Court Disposition

Application dismissed; no order as to costs.

Orders

  • The Chamber Summons filed on the 5th April 2007 is dismissed.
  • No order as to costs.