[2018] KEHC 5966 (KLR)
The court found that the applicants' request for a freezing order over the 1st defendant's bank accounts was futile as there were no substantial funds to preserve, and thus declined to grant it. The court granted the injunction restraining the disposal of the 1st defendant's movable assets, as there was no serious...
Source-derived case information.
- Citation
- [2018] KEHC 5966 (KLR)
- Parties
- Applicant: Oilfield Movers Limited; Applicant: Mayphil Investment Limited; Applicant: C & G Ventures Limited; Respondent: Kenya Energy Services Ltd; Respondent: East African Oilfield Services Limited
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Suit 58 of 2018
- Procedural Posture
- Civil Suit / Ruling on Interlocutory Application
- Outcome
- interlocutory injunction partially granted
- Judges
- F Tuiyott
- Legal Topics
- Injunctive Relief, Shareholder Rights, Asset Preservation
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
More case intelligence is available
Unlock the full research layer for this judgment.
Parties
Oilfield Movers Limited
Applicant
Mayphil Investment Limited
Applicant
C & G Ventures Limited
Applicant
Kenya Energy Services Ltd
Respondent
East African Oilfield Services Limited
Respondent
Procedural Posture
Civil Suit / Ruling on Interlocutory Application
Legal Issues
- 1 Whether a temporary injunction should issue restraining the defendants from disposing of movable assets of the 1st defendant.
- 2 Whether a freezing order should be granted over the 1st defendant's bank accounts.
- 3 Whether an interim injunction should restrain the 2nd defendant from interfering with the board of the 1st defendant.
Ratio Decidendi
The court found that the applicants' request for a freezing order over the 1st defendant's bank accounts was futile as there were no substantial funds to preserve, and thus declined to grant it. The court granted the injunction restraining the disposal of the 1st defendant's movable assets, as there was no serious objection from the 1st defendant and the order would serve to preserve the subject matter of the dispute. The request to restrain the 2nd defendant from interfering with the 1st defendant's board was declined because the 2nd defendant is the majority shareholder and the plaintiffs have no direct interest in the 1st defendant, making such an order unreasonable and unjustified....
Court Disposition
interlocutory injunction partially granted
Orders
- Prayer 5 (injunction restraining disposal of movable assets of the 1st defendant) is granted.
- Prayer 6 (freezing order over bank accounts) is declined.
Full Case Text
Judgment text and source record
33 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
COMMERCIAL & ADMIRALTY DIVISION
CIVIL SUIT NO. 58 OF 2018
OILFIELD MOVERS LIMITED ........................... 1ST PLAINTIFF/APPLICANT
MAYPHIL INVESTMENT LIMITED .................. 2ND PLANTIFF/APPLICANT
C & G VENTURES LIMITED ............................. 3RD PLAINTIFF/APPLICANT
VERSUS
KENYA ENERGY SERVICES LTD ........... 1ST DEFENDANT/RESPONDENT
EAST AFRICAN OILFIELD
SERVICES LIMITED ................................. 2ND DEFENDANT/RESPONDENT
RULING
1. The prayers in the Notice of Motion of 9th February 2018 have all but been overtaken by events or compromised. The motion seeks;-
5. THAT pending the hearing and determination of this suit a temporary injunction be issued against the 1st and 2nd Defendants/Respondents whether by itself, agent, employee or representative from disposing of any movable assets belonging to the 1st Defendant.
6. THAT pending the hearing and determination of this suit a freezing order be issued in respect to A/C No.1002401815 and 1002401823 held by the 1st Defendant at NIC Bank Kenya PLC, Prestige Branch.
7. THAT pending the hearing and determination of the suit an Interim Injunction be issued against the 2nd Defendant whether by itself, agent, employee or representative from interfering with the Board of Directors of the 1st Defendant/Respondent.
8. THAT leave be granted to serve summons or notice of summons to the 2nd Defendant in Seychelles.
9. THAT cost of the Application be provided for.
2. At the hearing of the Motion, the Applicants concede that the Freezing Order of the 1st Defendant’s account may serve no purpose as there are no substantial funds therein. As the Applicants acknowledge the futility of such an order, there is no need to grant it and it is therefore declined.
3. As to disposal of movable assets of the 1st Defendant, it has turned out that the substantial movable assets of the 1st Defendant comprise of 12 Tower lights and two Power Generators. The 1st Defendant contends that it has not taken any steps to dissipate any of its Assets or to move them outside the jurisdiction of the Court. I did not hear the 1st Defendant to have any particular or serious objection to the grant of Prayer 5 and I therefore grant it.
4. Prayer 8 which is for service of Summons outside jurisdiction is no longer necessary as both Defendants have appointed Counsel to act for them in this matter.
5. Prayer 7 seeks that the 2nd Defendant whether by itself, agents, employee or representatives be restrained from interfering with the Board of Directors of the 1st Defendant. Yet it is common cause that the 2nd Defendant is the majority Shareholder of the 1st Defendant (see for example paragraph 22 of the Plaint). Another feature of this dispute is that the Plaintiffs are not, and have never been, Shareholders or Directors of the 1st Defendant Company. The Plaintiff alleged that they paid for the purchase of Shares in the 2nd Defendant but the funds from the purchase were used to invest in the operations of 1st Defendant. In the substantive Claim, the Plaintiffs do not ask for control of the affairs of the 1st Defendant and that may not be a feasible Claim as they do not have a direct interest in the 1st Defendant. If it is the 2nd Defendant and not the Plaintiffs who are the majority Shareholders of the 1st Defendant then to grant the Order sought would be to unreasonably stifle the affairs and management of the 1st Defendants. The Court is disinclined to grant the order.
6. Ultimately, the Court makes the following orders in respect to the Notice of Motion dated 9th February, 2018:-
(i) Prayer 6 and 7 are declined.
(ii) Prayer 5 is granted.
(iii) Costs shall be in the cause
Dated, delivered and signed in open Court at Nairobi this 5th day of June 2018.
F. TUIYOTT
JUDGE
In the presence of;
Wachira for the Plaintiff
Kahara for the Respondents
Nixon-Court Assistant