https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12976

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **COMMERCIAL AND TAX DIVISION** **HCCOMM CASE NO. E063 OF 2025** **STEVE MWAI MIANO………….………………PLAINTIFF/APPLICANT** **VERSUS** **GEORGE NGARUIYA** **NJOMBAI……………………………..1ST DEFENDANT/RESPONDENT** **REGISTRAR OF COMPANIES…..2ND DEFENDANT/RESPONDENT** **AND** **SOSMO GENERAL CONTRACTORS** **LIMITED………………………………………….1ST INTERESTED PARTY** **ELIZABETH WANGARI KAMAU……………2ND INTERESTED PARTY** **RULING** 1. The Plaintiff/Applicant’s Notice of Motion dated 31st January 2025 is brought under the provisions of Section 1A, 1B, and 3A of the Civil Procedure Act, Order 40 Rule 2(1) and Order 51 of the Civil Procedure Rules and Section 103 of the Companies Act. In a nutshell, the Applicant seeks: 1. *A temporary injunction restraining the 1st Defendant/Respondent, whether by themselves, their servants, agents, proxies, or advocates, from carrying out any transactions, dealings, or acting on behalf of the Company in any manner whatsoever, interfering with the Plaintiff's rights and interests, and further barring them from transferring any shares in the Company, disposing of, alienating, and/or selling any of the Company's properties of whatever nature, being****SOSMO GENERAL CONTRACTORS LIMITED****, situated at Ngong Road Professional Centre, Pent House Suite.* 2. *An order of injunction restraining the 1st Defendant/Respondent from executing or operating the Company's bank account and withdrawing any amount from the Company's account domiciled at KCB BANK, Meru Branch, Account Number 1226838960, in the name of Sosmo General Contractors Limited.* 2. The Applicant, Steve Mwai Miano, a director and shareholder of Sosmo General Contractors Limited since 2014, avers that in January 2025, upon conducting a CR-12 search, he discovered he had been unlawfully removed as director and shareholder and replaced by the 1st Defendant and Elizabeth Wangari Kamau. He denies resigning, transferring shares, or authorizing any changes, and contends that the signatures purporting to be his are forged. He further asserts that the Business Registration Service failed to follow due process and withheld records, hampering his investigation. He has lodged a complaint with the DCI and fears irreparable harm unless the Court intervenes. 3. In his affidavit on 16th May 2025, he denies the resignation, pointing to contradictory letters dated September 2023 and July 2024, which he claims bear forged signatures and an incorrect postal address. He alleges that the 1st Respondent fraudulently altered his email address and impersonated him to confirm the resignation. He highlights that communication from the Registrar was purportedly sent on a Sunday using an email and phone number not belonging to him. He further states that a Companies Registrar admitted the email change was effected through a "digital linking" process initiated by the 1st Respondent, but the Registrar has refused to disclose the linking history. He believes the removal was designed to exclude him from lucrative government tenders. 4. The 2nd Defendant opposes the application. Sarah Wainaina, in her replying affidavit sworn on 26th March 2025, deposes that the Registrar acts as custodian of company records in accordance with the Companies Act. She outlines the company's shareholding history since incorporation in 2009, tracing changes culminating in the Applicant's appointment as director with 300 shares in 2014. She states that on 3rd July 2024, documents were lodged indicating the Applicant's resignation as director and shareholder, supported by a resignation letter and an affidavit purportedly sworn by him. The Registrar confirmed the resignation via email, and the Applicant allegedly acknowledged the resignation and forfeited his shares on 7th July 2024. The shares were subsequently assigned to Elizabeth Wangari Kamau. The deponent asserts that the Registrar acted lawfully and denies any misconduct. 5. The application was canvassed by way of written submissions. The Applicant’s submissions are dated 27th February 2026, while the 1st Defendant, 1st and 2nd Interested party filed submissions dated 11th March 2026 **Analysis and determination** 1. Having considered the Notice of Motion, the rival affidavits, and the submissions filed on behalf of the parties, the sole issue for determination is whether the Applicant has met the threshold for the grant of a **temporary injunction.** 2. The principles governing the grant of an interlocutory injunction are well settled. The Court of Appeal in **Giella v Cassman Brown & Co. Ltd [1973] EA 358** established the following three conditions: 1. *The Applicant must establish a prima facie case with a probability of success;* 2. *The Applicant must demonstrate that he will suffer irreparable injury which would not adequately be compensated by an award of damages;* 3. *If the Court is in doubt, it will decide the application on the balance of convenience.* 3. The Court of Appeal in **Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR held** that these three conditions are sequential and not conjunctive. Unless an applicant establishes a prima facie case, the Court need not consider the remaining two principles. 4. A prima facie case was defined in **Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] KLR 125**, as: ***“…a case which, on the material presented to the court, a tribunal properly directing itself would conclude that there exists a right which has apparently been infringed by the opposite party so as to call for an explanation or rebuttal.”*** 1. The Applicant asserts that he has been a director and shareholder of Sosmo General Contractors Limited since 2014, holding 300 shares, and that he only discovered his removal after conducting a CR-12 search in January 2025. He contends that he never resigned, transferred his shares, or executed any documents authorizing changes to the company's shareholding or directorship. He further alleges that the documents relied upon by the Registrar are forged and points to inconsistencies that cannot be ignored. 2. I have considered the documentary evidence and note material inconsistencies concerning the Applicant’s alleged resignation. The 1st Respondent alleges that the Applicant resigned in September 2023, whereas the 2nd Respondent relies on a different resignation letter dated 3rd July 2024. The two versions are plainly inconsistent and cast doubt on the authenticity of the impugned documents. 3. Further, the documents lodged with the Registrar bear strikingly identical signatures and an incorrect postal address. There are also unexplained changes to the Applicant’s email address and telephone number. Although a Deputy Registrar attributed the email change to a “digital linking” process initiated by the 1st Respondent, the Registrar has not produced the relevant linking or audit history despite a formal request. 4. Viewed cumulatively, these discrepancies raise serious questions regarding the authenticity and regularity of the impugned changes. Without making a definitive finding of fraud at this interlocutory stage, I am satisfied that the Applicant has established a prima facie case of possible fraud and procedural impropriety warranting determination at the substantive hearing. 5. The 2nd Respondent's assertion that it merely acted as a **custodian of records**and verified the resignation through the email response is **difficult to reconcile** with the glaring irregularities. The Registrar had the Applicant's correct email address on record yet chose to communicate with a different address on a Sunday. This raises serious questions about the**due diligence**and**good faith**exercised by the Registrar. 6. A transfer of shares and the removal of a director effected by forged documents are fraudulent, illegal, and void; and the appointment of directors using documents purportedly signed by the plaintiff but actually forged is irregular and null and void. (See **Sciommeri v Tasmac Limited & 4 others [2026] KEHC 1728 (KLR).** 7. **Section 103 of the Companies Act**, empower the Court to intervene where disputes arise concerning company records and the register of members. 8. Based on the material before me, I am satisfied that the Applicant has established a **prima facie case** with a **probability of success.** 9. On irreparable injury, the dispute concerns not merely shares but control and management of a private company. If the current directors continue to dispose of company assets, transfer shares, or operate the company's bank accounts, the substratum of the suit may be lost before the Court determines the validity of the impugned changes. Such loss cannot easily be quantified or adequately compensated by an award of damages. 10. Even if I were in doubt, the **balance of convenience** tilts in favour of preserving the company’s assets and in granting the injunction. The Applicant has been a director and shareholder of the Company since **2014**. The actions complained of were allegedly effected **without his knowledge or consent.** The 1st Respondent has not demonstrated that he will suffer any prejudice if the orders are granted. On the other hand, if the injunction is not granted, the Applicant may suffer **irreparable loss** and the substratum of the suit may be defeated. 11. However, I observe that the Applicant requests orders that fully prevent the 1st Defendant from representing the company or managing its bank account. If granted as asked, such orders would directly resolve management issues prior to trial and could halt the company's operations. At this preliminary stage, the Court should avoid issuing final decisions or orders that definitively settle disputed rights. 12. In these circumstances, justice favors preserving the company's assets and shareholding while allowing normal operations to continue under safeguards until the suit is heard. No withdrawals or transactions outside ordinary business should occur without all directors' approval or Court orders. 13. For the reasons set out above, I find the application dated 31st January 2025 succeeds in part and is allowed in the following terms: 1. ***A temporary injunction is hereby issued restraining the 1st Defendant/Respondent, whether by themselves, their servants, agents, proxies, or advocates, from carrying out any transactions, dealings, or acting on behalf of the Company in any manner whatsoever interfering with the Plaintiff's rights and interests, and further barring them from transferring any shares in the Company, disposing of, alienating, and/or selling any of the Company's properties of whatever nature, being SOSMO GENERAL CONTRACTORS LIMITED, pending the hearing and determination of this suit.*** 2. ***The prayer seeking to restrain the operation of the company's bank account is declined. However, no withdrawals or transactions outside the ordinary course of the company's business shall be undertaken without the concurrence of all the persons claiming directorship or further orders of the Court.*** 3. ***Costs of the application shall be in the cause.*** It is so ordered. **RULING** delivered virtually, dated and signed at **NAIROBI** This **13th** day of **August** 2026. **PETER M. MULWA** **JUDGE** **In the presence of:** *Mr. Kamau* for 1st Defendant and 1st & 2nd Interested Parties Court Assistant*: Sharon*