[2024] KECPT 71 (KLR)

Mwambi v Mwalimu National Sacco (Tribunal Case E173/83 of 2022) [2024] KECPT 71 (KLR) (11 January 2024) (Ruling)

Neutral citation: [2024] KECPT 71 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case E173/83 of 2022

BM Kimemia, Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members

January 11, 2024

Between

James Oirere Mwambi

Claimant

and

Mwalimu National Sacco

Respondent

Ruling

1. The matter for determination is a Notice of Motion dated 29. 11. 2023 under Certificate of Urgency seeking the following orders:a.That this Application be certified as urgent, to proceed to hearing immediately in view of its urgency and heard ex-parte in the first instance.b.That this Honourable Tribunal be pleased to discharge, vary or set aside the orders of status quo given by the chairman of the Honourable Tribunal on 15. 12. 2022 and allow for elections as the Respondent needs to hold elections for the said position in the Nairobi Branch in line with its By-laws as the term of that particular delegate the subject matter of this case lapses this year.c.That the costs of this Application be provided for.The Application is opposed vide the Replying Affidavit of James Oirere the Claimant deponed on 7. 12. 2023. The parties filed written submissions dated 11. 12. 2023 and 15. 12. 2023 respectively.

Applicant/respondent’s Submissions 2. The Applicant seeks that the status quo orders issued on 15. 12. 2022 be set aside lifted and/or reviewed to enable the Respondent to carry out elections for the delegates position.

3. That the Claimant’s term is aligned to that of Banda Godfrey Mayenda which comes to an end this year hence the position of the Claimant needs to be declared vacant for election in the 2024 Annual General Meeting.

4. That the Claimant would not suffer any prejudice since he would have an opportunity to offer himself as a candidate in the elections to fill the vacancy.That the matter for determination is whether the status quo orders of 15. 12. 2022 should be discharged, varied or set aside to allow for elections of the Applicant’s Nairobi Branch since the terms of the delegate expires this year.

5. That the Claimant participated in the elections and lost hence he is estopped from stating that his term ends in December 2024.

6. That the Claimant participated in the elections in 2022 therefore his terms cannot end in 2024. That the Claimant challenged the non-declaration of the seat of Banda Godfrey as vacant and sought orders on that basis. That the status quo is therefore tied to the same seat as per the By-laws. That the said Banda Godfrey was transferred from Nairobi and the subsequent non-declaration of his seat as vacant was based on that transfer. That the two are therefore tied together and cannot be separated as the Claimant is proposing.

7. That the Claimant has not stated that he will suffer prejudice or loss if the seat is declared vacant since he can vie again.

8. That injunction orders can be varied, discharged or set aside if the ends of justice so demand or if the injunction does not serve the ends of justice it was intended to serve.

9. That the claim of the Claimant is that he remains a delegate prior to 1. 2.2021 hence its clear that elections need to be carried out in February 2024 and the current status quo orders affects as it seem to imply that he can be retained as a delegate without any time limit.

10. The Respondent has cited:i.Thugi River Estate Limited versus National Bank of Kenya and 3 others[2015]eKLR. That status quo orders need not be in a vacuum without the description of the status quo being maintained.ii.Beni Development Limited versus First Community Bank Limited[2021] eKLR held: Interim injunctive orders were discharged as they had already served their purpose.

That the Interim Injunctive orders of status quo have already served their purpose as the Claimant has been retained as a delegate until the position that he challenged has run its course.iii.Ochola Kamili Holdings versus Guardian Bank Limited [2018]eKLR held: An order of injunction is meant to protect the Plaintiff from possible injury and not to oppress the other party.

The Respondent therefore seeks for the said orders be discharged, varied or set aside as they have already served their purpose to enable the Respondent to carry out elections in February 2024.

Respondent/claimant’s Submissions 11. The Claimant submitted that he was to remain a delegate of the Nairobi Branch prior to the election held on 5. 2.2022. That there were 5 delegates who applied for 4 positions.That there should have been 5 vacancies declared vacant and not 4 in view of the fact that Mr. Banda Godfrey was transferred to Bungoma from 3. 1.2022.

12. That By-law 32. 1(b) provides that a delegate ceases to be a delegate once he ceases working in the Branch.That as at 5. 2.2022, there were 5 vacancies to be filled since Banda Godfrey had ceased to be a member and delegate.That the Claimant was to remain a delegate pending the hearing and determination of the suit.

13. That the Respondent has not demonstrated any such new and important matter or evidence that was not within their knowledge as provided under Order 45 Rule 1 Civil Procedure Rule.

14. That elections are held annually as per Section 31 Cooperative Societies Act and the By-laws. That the Respondent should have endevoured to have the matter heard and determined in December 2023 to pave way for the elections but they filed their documents late.That if the orders are granted, the claim will be rendered nugatory.

15. We have considered the Application of the Applicant and note that the issue of contention in the main claim was for the nullification of the elections.

16. We note that four positions were declared vacant and there were 5 candidates, but there was an issue of the transfer of one delegate from Nairobi and there was no declaration of that vacancy.The minutes of 5. 2.2022 at 10. 00 a.m MIN/AGM/6/2022 indicates that 4 delegates were retiring and 5 had been cleared to vie being –-James Oirere,- Grace Otom- Reuben Barasa- Antony Kairuki- Victor Wanga.MIN/AGM/7/2022: Election Results indicates that the Claimant received the least votes of 483 and the other 4 were declared winners for the 4 available positions.

17. The Claimant wrote the letter dated 10. 2.2022 indicating that there was the position held by Mr. Banda Godfrey who had been transferred out of Nairobi with effect from 3. 1.2022 therefore there was an extra vacancy. That therefore there were 5 vacancies in Nairobi Branch since Mr. Banda had ceased to be a delegate of Nairobi Branch.

18. That there was no declaration of the vacancy left by Mr. Banda so there were 5 vacancies and therefore this prejudiced his candidature as a delegate.

19. In the said letter, the Claimant sought various reliefs including:i.Declaration that Mr. Banda ceased to be a delegate for Nairobi Branchii.Declaration that the 5 vacancies be declared as filled…..”iii.That flesh Annual General Meeting or Special General Meeting be conducted to fill the 5 vacant positions.”

20. The Director Cooperative Development wrote a reply dated 16. 2.2022 to the Respondent to either proceed with the Annual General Meeting or fill the vacancy the next year, or to organize a fresh elections.

21. The Respondent responded on 25. 2.2022 indicating that they were yet to confirm the transfer of Mr. Banda from Teacher Service Commission.

22. We note now in the current Application that the Claimant contends not to have filled up the position of Mr. Banda whose position and that the position should be filled up in the upcoming Annual General Meeting.Despite the fact that the Claimant contends the elections, we note that the terms of the delegates lapses and there needs to be elections in February 2024.

23. We note that the vacancy of Mr. Banda is yet to be filled vide an elections as per the communications cited earlier letters dated 10. 2.2022, 16. 2.2022 and 25. 2.2022.

24. In the said letters, the main contention of the Claimant is that there was no declaration of the vacancy of the position of Mr. Banda, and he was holding the position by virtue of there being an undeclared vacancy, there having been 4 positions vacant with 5 people having declared their interest. We note that the elections were called out for the 4 declared positions and the Claimant’s status quo orders deemed the position of Mr. Banda filled.

25. The Respondents prays to set aside the status quo orders to allow for proper elections to be carried out as required under the By-laws of the society..

26. We note that the Claimant can also as well declare his interest in the vacant positions pending the hearing and determination of this matter.

27. The Cooperative Tribunal has the mandate to ensure smooth running of the Cooperative Societies and in this regard, the Respondent is required/mandated to hold their Annual General Meeting in February 2024 as per the Cooperative Societies Act and the By-laws of the society. We also note that the By-laws also require for those vying for the election as delegates need to be vetted.

28. We note that the interests of the members in general are more important/crucial than those of an individual.In any case, may be this matter will be resolved vide the holding of the Annual General Meeting and elections in February 2024 thus this would also save on judicial time.

29. We note that the main contention of the of the claim is that there was an undisclosed and unknown vacancy of Mr. Banda and that this position was not declared.The Respondent as at the time of filing this claim had not declared the vacancy of the position of Mr. Banda and hence the reason why the status quo orders were issued.

30. We therefore note that there is a new matter which has arisen and is likely to cause difficulties or hardship to the members of the Respondent. This new matter is in accordance to Order 45 Rule 1 Civil Procedure Rules.The review/setting aside of the status quo order therefore will allow the Respondent to regularize the delegate system for Nairobi by declaring the position of Mr. Banda vacant.The Tribunal is mandated to look at the substantive justice and the interests of the general membership as opposed to technicalities.

31. By declaring the position of Mr. Banda vacant, the Claimant will also presumably have an opportunity to vie for the elections as a delegate for Nairobi Branch. We note that this far, the status quo orders have served their purpose as the Claimant has remained a delegate for the entire year.

32. The validity of the elections previously held in February 2022 will be heard and determined and there will be no prejudice to either party in the matter, noting that an Annual General Meeting is on avenue for resolutions of any disputes arising in the society. The same is also mandatory as per By-laws 33 and the delegates who will be vying are also required to be vetted under By-law 32. In Ochola Kamili Holdings -versus - Guardian Bank Limited [2018] eKLR“It was held that an order of injunction is meant to protect the Applicant from possible inquiry but not to oppress the other party”.

33. We note as per the minutes, 4 positions were vacant, 4 positions were filled and it is only fair to the members that they get an opportunity to have the position of Mr. Banda declared vacant and elections held for the same.We note that this issue will not prejudice the substance of the claim since the status quo orders have ran their utmost cause and remaining in force, there will occasion hardship to the members of the Applicant.

34. In the circumstances, we note that there is a need to hold an Annual General Meeting and elections for the Respondent in February 2024. The elections of the year 2022 are challenged by the claimant to the effect that the position of Mr. Banda had not been declared vacant and elections were held for only 4 positions. In the circumstances, we note that the status quo of the Tribunal was the temporary fill up of the said vacant position held by Mr. Banda, which position the claimant has been holding onto vide the status quo orders of the Tribunal.

35. We also note that the Respondent now wishes to hold the Annual General Meeting and conduct elections but due to the status quo orders, they have not been able to declare the vacancy of the position of Mr. Banda.

36. The members of the Respondent have a right to elect a delegate of their choice in the upcoming Annual General Meeting and despite that there is a dispute in the previous elections we note that the same is based on information provided by the Claimant in his letters.

37. The members interest is far higher than those of an individual hence it would be in the interest of the members of the Respondents to exercise their voting rights, to elect a delegate of their choice as the issue of the previous elections is deliberated on by the parties before the Tribunal to determine the validity or otherwise.We note that if there is any loss or damages occasioned to the Claimant by virtue of setting aside the status quo orders, the same can be computed by the Tribunal and compensated to the injured party.

38. In the circumstances, the terms of the delegates having lapsed, it would be in the interest of justice to allow for the members of the Respondent to hold fresh elections.

39. We find that the Application dated 29. 11. 2023, has merits and is allowed as prayed with costs in the cause. In accordance to Rule 3 and 4 of the Cooperative Tribunal (Practice and Procedure) Rules 2004. Matter to proceed for hearing of the main claim on 6. 2.2024 as ordered on 15. 9.2023.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 11TH DAY OF JANUARY, 2024. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 11. 1.2024HON. BEATRICE SAWE MEMBER SIGNED 11. 1.2024HON. FRIDAH LOTUIYA MEMBER SIGNED 11. 1.2024HON. PHILIP GICHUKI MEMBER SIGNED 11. 1.2024HON. MICHAEL CHESIKAW MEMBER SIGNED 11. 1.2024HON. PAUL AOL MEMBER SIGNED 11. 1.2024TRIBUNAL CLERK JEMIMAHMORARA ADVOCATE FOR CLAIMANT.THIMBA ADVOCATE FOR APPLICANT/RESPONDENTRULING DELIVERED ACCORDINGLY.HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 11. 1.2024