https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/8588

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI COMMERCIAL AND TAX DIVISION CORAM: F. MUGAMBI, J COMM PETITION NO. E032 OF 2024 BETWEEN HENRY PETER MUNYOKI ..……............................ PETITIONER AND ALICE WAMBUA ........…………..…………………1ST RESPONDENT BENEDICT KUTU META …………..……………… 2ND RESPONDENT BETTERLINE WATER LIMITED ………….…….. 3RD RESPONDENT RULING Introduction and Background 1. By its ruling dated 3rd October 2025, this Court stayed the proceedings in this matter and referred the dispute between the parties to arbitration in accordance with Article 31 of the Articles of Association of the 3rd Respondent ("the Company"). The Court further directed that the Petitioner was at liberty to pursue his application dated 16th HCCOMM PET NO. E032 OF 2024 RULING Page 1 December 2024 for interim measures of protection pending the arbitration, brought under section 7 of the Arbitration Act. It is that application that is the subject of this Ruling. 2. The Petitioner’s application seeks inter alia, injunctive orders stopping the 1st and 2nd Respondent from effecting any changes to the Company's register at the Registrar of Companies, increasing the share capital or dealing with the shares of the Company in any manner; and opening new bank accounts, incurring new financial obligations, or disposing of or charging any assets of the Company. 3. He further seeks mandatory injunctions directing the Respondents to pay his monthly salary from November 2024 onwards and school fees for his two children VWM and AUM for the first term/semester of 2025 and beyond. He also seeks an order appointing an independent audit firm to conduct a business review from January 2020 to date and value the Company’s shares, that the Respondents be ordered to release a schedule of all Company assets and liabilities, with title documents and that they disclose all bank HCCOMM PET NO. E032 OF 2024 RULING Page 2 accounts, account numbers, signatories, bank statements from January 2020 to date, and current cash balances across multiple banks including Equity, National Bank of Kenya, KCB and Family Bank. 4. The application is supported by the grounds set out on its face and by the affidavits sworn by the Petitioner on 16th December 2024 and 24th October 2025 respectively. It is opposed by the Respondents through the replying affidavit sworn on 15th October 2025 by the 1st Respondent. The parties have further supplemented their respective positions by filing written submissions, all of which I have considered together with the pleadings. I shall make relevant references to the submissions and pleadings in the analysis and determination that follows. Analysis and Determination 5. Although the Respondents challenge the competence of the Petitioner's application, I am inclined to proceed to determine it on its merits considering that he filed the application on the premise that the dispute would be determined in HCCOMM PET NO. E032 OF 2024 RULING Page 3 this court and not arbitration. I will therefore not fault his application for failing to adhere to the requirements of the Arbitration Act and Rules. I am further satisfied that no prejudice will be occasioned to the Respondents by this approach, as they have themselves engaged with and argued the merits of the application in their response and written submissions. 6. There is no dispute that an application of this nature is governed by section 7 of the Arbitration Act, which confers upon the High Court the power and jurisdiction to grant interim measures of protection in the context of arbitration proceedings. The provision reads as follows: “Interim measures by court (1) It is not incompatible with an arbitration agreement for a party to request from the High Court, before or during arbitral proceedings, an interim measure of protection and for the High Court to grant that measure. HCCOMM PET NO. E032 OF 2024 RULING Page 4 (2) Where a party applies to the High Court for an injunction or other interim order and the arbitral tribunal has already ruled on any matter relevant to the application, the High Court shall treat the ruling or any finding of fact made in the course of the ruling as conclusive for the purposes of the application.” 7. One of the leading authorities on the principles governing the grant of interim measures of protection is Safaricom Limited V Ocean View Beach Hotel Limited, Salim Sultan Moloo & Alsai (K) Limited, , [2010] KECA 346 (KLR) cited by the Respondents, in which Nyamu JA observed as follows: “Interim measures of protection in arbitration take different forms and it would be unwise to regard the categories of interim measures as being in any sense HCCOMM PET NO. E032 OF 2024 RULING Page 5 closed (say restricted to injunctions for example) and what is suitable must turn or depend on the facts of each case before the Court or the tribunal – such interim measures include, measures relating to preservation of evidence, measures aimed at preserving the status quo measures intended to provide security for costs and injunctions. Under our system of the law on arbitration the essentials which the court must take into account before issuing the interim measures of protection are: a) The existence of an arbitration agreement. b) Whether the subject matter of arbitration is under threat. c)In the special circumstances which is the appropriate measure of protection after HCCOMM PET NO. E032 OF 2024 RULING Page 6 an assessment of the merits of the application. d) For what period must the measure be given especially if requested for before the commencement of the arbitration so as to avoid encroaching on the tribunal’s decision-making power as intended by the parties.” 8. The Petitioner’s case is that he is a director and shareholder of the Company since 2020 holding 150 of 1,000 shares, that he was the Operations Director until 27th October 2024, when he claims he was forced to leave due to a hostile work environment created by the Respondents whom he states are husband and wife. That since his exit, he has been sidelined, denied access to company communications, bank accounts, vehicle tracking systems, and excluded from decision-making. 9. He claims that the Respondents allegedly transferred 650 shares to the 2nd HCCOMM PET NO. E032 OF 2024 RULING Page 7 Respondent and appointed him as a director without the Petitioner’s knowledge. The Petitioner claims that he is owed Kshs. 9,934,167.76 being a loan to the Company, his November 2024 salary of Kshs. 148,000.00 per month, airtime and fuel allowances, and school fees for his two children, which the Company previously paid. 10. In response, the Respondents deny that the Petitioner operates in a hostile work environment, or that he has been locked out of, sidelined from, or denied access to the Company's accounts. They further contend that the Petitioner remains a signatory to the said accounts. As regards the Petitioner's claims for salary, airtime, and fuel allowances, the Respondents assert that these benefits are payable only to active directors or members of staff, and that, having abandoned his work station, the Petitioner is no longer entitled to receive them. 11. The Respondents further contend that the grant of the interim orders sought would cause undue and unjustified hardship and would completely paralyse HCCOMM PET NO. E032 OF 2024 RULING Page 8 the Company's operations. They assert that the Company is a going concern, that there is no threat to the subject matter of the arbitration, and that Henry remains a director of the Company and a holder of 150 shares out of the total issued share capital of 1,000 shares. 12. Having carefully considered the rival affidavits and written submissions, and as noted above, section 7 of the Arbitration Act is designed to grant interim measures of protection for the purpose of preserving assets, evidence, or the status quo pending the outcome of arbitration. The nature and scope of such measures must therefore be understood within that limited remit. 13. The Petitioner seeks mandatory injunctions directing the payment of his salary, allowances, and school fees, as well as orders for the appointment of an independent auditor, the valuation of the Company's shares, and the disclosure of the Company's assets, liabilities, and bank accounts. Having considered the dispute as presented in the Petition, I take the view that these are not preservation orders. Granting them would HCCOMM PET NO. E032 OF 2024 RULING Page 9 result to granting the very substantive reliefs that are properly the subject of the arbitration, or pre- judging the outcome of the arbitral process altogether and leave very little of substance remaining for the arbitral tribunal to determine, which is precisely the outcome that section 7 is designed to guard against. 14. I further find that the Petitioner has not demonstrated that the Respondents are about to dissipate the Company's assets, destroy evidence, or otherwise render the arbitration nugatory. From the evidence before this Court, he remains a director and shareholder of the Company. The change in shareholding of which he complains occurred prior to this Court's ruling referring the matter to arbitration and is, in any event, the very dispute that falls to be determined by the arbitral tribunal. His allegations of fraud are presently the subject of a police report and a complaint to the Business Registration Service, neither of which constitutes a ground for this Court to bypass the arbitration agreed upon by the parties. HCCOMM PET NO. E032 OF 2024 RULING Page 10 15. This Court has already determined that the parties bargained for arbitration, and that bargain must be respected. As the Court of Appeal cautioned in Safaricom Limited v Ocean View Beach Hotel Limited (supra), courts must be slow to make orders that risk prejudicing the outcome of arbitral proceedings. That is not to say that the Applicant does not have any remedies for the remedies he seeks are quantifiable. Conclusion & Disposition 16. The application dated 16th December 2024 is accordingly dismissed with costs to the Respondents. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 19 TH DAY OF JUNE 2026. F. MUGAMBI JUDGE Delivered in presence of: Osoro for Petitioner/applicant Ms Akinyi for Makamba for Respondent Court Assistants: Lillian & Gloria HCCOMM PET NO. E032 OF 2024 RULING Page 11