https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12805

Monacs LLC v Monacs Health Kenya Ltd (Commercial Miscellaneous Application E773 of 2024) [2026] KEHC 12805 (KLR) (Commercial and Tax) (6 August 2026) (Ruling) Neutral citation: [2026] KEHC 12805 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Miscellaneous Application E773 of 2024 WN Molonko, J August 6, 2026 Between Monacs LLC Claimant and Monacs Health Kenya Limited Respondent Ruling 1.The claimant filed a Notice of Motion application dated 9th February 2026 under the provisions of Sections 18(1) of the Arbitration Act, Section 1A, 1B & 3A of the Civil Procedure Act, Order 40 Rule 1 and Order 51 Rule 1 of the Civil Procedure Rules. 2.The claimant sought interim preservation orders over all medical equipment supplied, financed or owned by the applicant and currently installed or used at Monacs Health Kenya Limited pending the hearing and determination of the arbitration proceedings. 3.The application is premised on the grounds on the face of the motion and supported by an affidavit sworn on the same date and a supplementary affidavit sworn on 3rd March, 2026 by Kiluva A.K, an advocate of the High Court of Kenya acting on behalf of the claimant. Mr. Kiluva averred that the applicant filed an Originating Summons dated 19/12/2024 by virtue of which the court delivered its Ruling on 26/09/2025 referring all the disputes arising from Joint Venture Agreement dated 20th August, 2023 between the parties to Arbitration. 4.Mr. Kiluva deposed that the court granted leave to the Parties to seek interim reliefs from the courts pending the Arbitral Award. He averred that the Ruling has not been stayed, set aside nor varied and therefore binding. He further deposed that the equipment currently installed or used at the Monacs Health Kenya Limited is subject to an outstanding loan which remains unpaid. He stated that on 21/09/2023 and 02/12/23, Pius Opendi Ochola; a director of the Respondent, executed written authorizations to obtain financing on behalf of Monacs Health Kenya Ltd for acquisition of the said medical equipment and expansion expenses where he acknowledged and agreed that Monacs Health Kenya Ltd would be solely responsible for repayment of the loan, including interest, with repayment scheduled was to commence in February 2024. 5.He further deposed that that the Respondent continues to use the equipment daily, generating revenue, without servicing the loan and without providing any security. He stated that on 16-01-2026, a formal demand for payment and preservation of the equipment & notice of ownership of property - medical and physiotherapy equipment, was electronically served upon the respondent which he totally ignored and he has also ignored all the attempts to amicably settle the matter through mediation. 6.He also contested a Magistrate's Court order dated 03-02-2026, for invalidity and/or illegality stating that the same was obtained without applicant's authority, knowledge and/or consent and the same was obtained through forgery of the applicant's signature. He pointed out that the court's ruling of 26-09-2025 referred all disputes arising from the Joint Venture Agreement dated 20-08-2023 to arbitration before a sole arbitrator appointed by the Chairman of the Chartered Institute of Arbitrators — Kenya. He also pointed out that the Magistrate’s court order only authorized conditional use of a joint bank account held at Commercial International Bank (CIB) Upper Hill Branch Account Number 0601020015 for operational expenses and did not address ownership, loan obligations, or equipment rights. 7.He stated that the respondent has since expended the company funds allegedly on staff, rent, suppliers and legal fees, while deliberately omitting payment of the equipment loan, thereby deepening the default. 8.The applicant acknowledged that a sum of Kshs. 500,000/= was transferred pursuant to the Magistrate's interim operational order, which he states that the acknowledgment is strictly without prejudice to the applicant's challenge to the contested consent, the pending arbitral proceedings pursuant to Court's Ruling of 26-09-2025, or the applicant's proprietary and security rights in the medical equipment forming the subject matter of the arbitration. 9.He further deposed that the respondent has withheld from the applicant; access credentials and bank statements of the company account from August 2023 to date, MPESA accounts, Payroll records and cash books for the same period. 10.He stated that despite benefiting from continued use of the medical equipment, the Respondent has failed to make any payment towards the outstanding equipment loan, choosing instead to expend funds on other obligations, thereby deepening default and exposing the Applicant to ongoing financial loss. 11.He contended that the continued use of the equipment is causing depreciation, wear, and irreversible loss to the applicant and poses a real risk that the arbitration will be rendered nugatory unless immediate preservation orders are issued. 12.He urged the court to intervene urgently as the continued depreciation, uncontrolled use and possible concealment or encumbrance of the equipment will defeat the arbitral process and render any eventual award illusory. 13.The respondent by a Replying Affidavit sworn by Dr. Pius Ochola Opendi a director of the Respondent deposed that by an Order issued on 2nd February, 2026, Hon. Mr. Justice Visram Aleem Alnashir in HCCOMM/E045/2026 had already directed the parties to mediation which was scheduled for 16th February 2026. 14.He stated that he was aware that the applicant resides in Canada and the United States of America and that all affidavits sworn and pleadings attributed to the applicant in the proceedings were executed outside the territorial jurisdiction of Kenya. He averred that the affidavits sworn were therefore defective by failing to meet the requirements of section 5 of the Oaths and Statutory Declarations Act (Cap 15, Laws of Kenya), that any affidavit sworn outside Kenya for use in Kenyan courts must be sworn by a Notary Public, or a Kenyan consular officer, and must be properly authenticated as such. 15.The Respondent pointed out that the applicant is a duly appointed director and a 50% shareholder of Monacs Health Kenya Ltd which fundamentally alters the nature of the dispute, transforming it from a personal commercial claim into an internal company governance dispute governed by the Companies Act, 2015. 16.He stated that there are no loan agreements, bank disbursement records, repayment schedules, equipment invoices, import documentation, or asset schedules on record to substantiate the claim. He averred that the authorization to explore funding options did not amount to proof that funds were borrowed or injected into the Company. 17.He is emphatic that the orders sought amounts to final orders being sought at an interlocutory stage which will prejudice the respondent as the question of ownership is yet to be determined. He also pointed out that he remitted USD 600 via Western Union in June 2024 to the Applicant and a further bank transfer of KES 500,000 to the Applicant’s account on 6th February, 2026 pursuant to the Magistrate’s court order. 18.The respondent further deposed that the hospital equipment is installed at the hospital premises, already inspected and licensed and is used daily in the treatment of patients. Permitting its removal, isolation, or third-party control of such equipment would paralyze hospital operations and endanger the safety and lives of patients. 19.He further pointed out that the multiple proceedings filed by the applicant in different fora in respect of the same subject matter has resulted in overlapping and potentially conflicting orders and such conduct amounts to an abuse of the court process. 20.Upon consideration of the instant application, the grounds on the face of it and the affidavit filed in support thereof, the replying affidavit and the written submissions by both parties, the issue that arise for determination is whether the application meets the threshold of granting injunctive orders and relate mainly to the principles applicable to grant of temporary injunctions. These are;a.Whether the plaintiff has established a prima facie case.b.Whether the respondent stands to suffer irreparable loss/harm that cannot be adequately compensated by an award of damages if orders sought are not granted.c.Whether the balance of convenience tilts in favour of the claimant.d.Whether orders sought should be allowed. 21.Order 40 Rule (1) of the Civil Procedure Rules relied on by the Applicant provides that:-“Where in any suit it is proved by affidavit or otherwise;a.That any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; orb.That the defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit, the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further orders.” 22.Further, the principles for granting injunctive orders were laid out in the celebrated case of Giella V Cassman Brown & Co Ltd [1973] EA 358 that the applicant must show: - a prima facie case with a probability of success; secondly, an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury, which would not be adequately compensated by an award of damages. Thirdly, if the Court is in doubt, it will decide an application on the balance of convenience. 23.As to what amounts to a prima facie case, the Court of Appeal, in Mrao Ltd vs. First American Bank of Kenya Ltd & 2 Others [2003] KLR 123, stated: -“A prima facie case in a civil application includes but is not confined to a genuine and arguable case. It is a case in which on the material presented to it, the court or a tribunal properly directing itself, will conclude that there exists a right that has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter." 24.This was reiterated by the Court of Appeal in the case of Nguruman Limited V Jan Bonde Neilsen & 2 Others [2014] eKLR, where the Court listed the three principles as follows:-a.Establish his case only at a prima facie level.b.Demonstrate irreparable injury if a temporary injunction is not granted.c.Allay any doubts as to (b) by showing that the balance of convenience is in his favour.” 25.The Court went on to state that: “These are the three pillars on which rests the foundation of any order of injunction, interlocutory or permanent. It is established that all the above three conditions and stages are to be applied as separate, distinct and logical hurdles which the applicant is expected to surmount sequentially.” 26.Upon perusal of the Court record and the pleadings filed in this suit, the Applicant has demonstrated that it entered into a Joint Venture Agreement on 20th August, 2023 with the Respondent authorizing the applicant to source for funds, which has not been disputed by the Respondent. It is on this basis that the applicant avers that she went ahead and supplied the subject equipment to the hospital. It is in the replying affidavit of the respondent that he admitted there was an agreement for the supply of the hospital equipment by the applicant amounting to USD 38,000 which was to be repaid at an interest rate of 15%. Additionally, an amount of USD 6,000 could be paid to the appellant as travel costs. 27.It is in this court’s view that the supply of the equipment cannot be overlooked. The respondent was aware of the arrangement between the parties. There was an agreement that the applicant be paid an amount of Kshs. 500,000/- from the business account and an amount of Kshs. 50, 000/- per month for six months subject to review based on the business outlook. It is in the admission of both parties that Kshs. 500,000/- was indeed paid to the applicant. The fate of Kshs. 50,000/- per month for six months is unknown. Based on the circumstances of this case and the evidence on record, this court is of the opinion that the appellant has demonstrated a prima facie case against the Respondent. 28.Concerning proof of irreparable injury, loss or damage, it was held in the case of Barclays Bank -VS- Kenneth Kiruani Wanjohi & 2 others [2020] eKLR that:-“An injury is irreparable where there is no standard by which the amount of compensation can be measured with reasonable accuracy or where damages cannot be a sufficient or adequate remedy”. 29.It is noteworthy that the subject of contention is hospital equipment already installed at the hospital premises, and being utilized on a daily basis in the treatment of patients. Permitting its removal, isolation, or dismantling would endanger the safety and lives of patients which cannot be adequately compensated by way of damages. The subject equipment is the substratum of this case, which can be determined at the substantive stage. On this premise, the balance of convenience tilts in favor of the Respondent and issuing orders sought in prayers 5 and 6 will be far reaching and detrimental to the patients already receiving treatment or seeking services from the hospital. 30.In the circumstances, and in the interim, this court issues the following orders-a.Pending the hearing and determination of the arbitration proceedings, the Respondent shall not, either by itself or through its agents, servants or nominees remove, alienate, lease, charge, encumber, pledge or dispose any equipment subject to the dispute pending the hearing and determination of the dispute.b.The Respondent is hereby ordered to render full financial disclosure limited to the terms expressed under prayer 4.c.Each party to bear its own costs. 31.It is so ordered. DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 6TH DAY OF AUGUST, 2026W.N. MOLONKOJUDGEDelivered Virtually in the presence of-Kiluva for the Applicant.Mulama for the Respondent.Susan Nzioka- Court Assistant