https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12658

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT MOMBASA COUNTY COURT NAME: MOMBASA HIGH COURT CASE NUMBER: HCCA/E040/2026 OMRA MEAT PROCESSING LIMITED AND DINIH ABDIRAHMAN DIRIYE VS MATHE WAMBEREKI T.A ETS MU. LE VAINQUEUR BUNIA AND DIANA DAVASO KAMIDI T.A ARDIALE TRADING ENTERPRISES AND 1 OTHERS JUDGMENT . Introduction 1. This is an interlocutory appeal against the ruling of the Chief Magistrate’s Court at Mombasa delivered on 20 February 2026 in MCCC No. E007 of 2026. In the impugned ruling, the learned Magistrate allowed the respondents’ 2. application for security before judgment and directed the appellants to furnish security for the satisfaction of any decree that may ultimately issue in favour of the respondents in the sums of USD 58,741 and Kshs. 2,827,509.47, together with costs in the cause and liberty to apply. 3. The appellants, being dissatisfied with that decision, preferred this appeal contending that the learned Magistrate misdirected herself in law and fact by granting security without sufficient evidence of any intention by the appellants to obstruct, delay, or defeat execution of a decree. They further challenged the order against the 2nd appellant personally, arguing that it was made solely on account of his position as a director of the 1st appellant company. The Judiciary of Kenya Doc IDENTITY: 43190462849926518776325563905 Tracking Number:OON6B42026 1/ 6 Background and Facts 4. The respondents filed suit before the Chief Magistrate’s Court claiming damages arising from alleged loss and destruction of refrigerated cargo. 5. The respondents’ case was that the 1st appellant had sold a refrigerated container and that transportation arrangements were subsequently undertaken. They alleged that the cargo was destroyed by public health authorities in Mombasa, resulting in loss claimed at approximately USD 58,741 and Kshs. 2,777,509.47. 6. Before the trial court, the respondents sought security before judgment on the basis that there was a risk that any decree obtained in their favour would not be satisfied. They relied principally on the fact that the 2nd appellant was resident in Australia, that he had sworn an affidavit from that jurisdiction, that the cargo had been destroyed, and that no defence had been filed at the time of the application. 7. The learned Magistrate was persuaded that there existed sufficient risk to justify an order for security and directed the appellants to furnish security. This appeal challenges that exercise of discretion. Grounds of Appeal 8. The appellants challenged the decision on several grounds, which may be summarised as follows: a) The learned Magistrate misapplied Order 39 rules 1, 2 and 5 of the Civil Procedure Rules; b) The respondents failed to establish that the appellants had absconded, were about to abscond, or intended to dispose of property to defeat execution; c) The learned Magistrate improperly directed the order for security against the 2nd appellant personally merely because he was a director of the 1st appellant; d) The trial court relied on speculation and conjecture rather than evidence; and e) The order issued was oppressive and prejudicial before determination of the substantive dispute. Issues for Determination 9. Having considered the record and submissions of counsel, the issues for determination are: a) Whether the learned Magistrate properly exercised discretion in granting security before judgment under Order 39 of the Civil Procedure Rules; The Judiciary of Kenya Doc IDENTITY: 43190462849926518776325563905 Tracking Number:OON6B42026 2/ 6 b) Whether the circumstances justified extending the order for security to the 2nd appellant personally; and c) What orders should issue. Analysis and Determination Whether the Requirements of Order 39 Were Satisfied The power of the court to order security before judgment is provided 10. under Order 39 rules 1, 2 and 5 of the Civil Procedure Rules. 11. The jurisdiction is intended to prevent a defendant from frustrating the court process by absconding, disposing of property, or otherwise acting with the intention of defeating execution of a decree that may ultimately issue. 12. However, the remedy is exceptional. It is not available merely because a plaintiff fears that recovery may become difficult. The applicant must place before the court credible evidence demonstrating circumstances falling within the statutory provisions. The court must therefore distinguish between a genuine concern 13. regarding recovery and conduct amounting to an intention to obstruct or defeat execution. 14. In the present case, the respondents placed before the trial court evidence relating to the alleged loss, destruction of the cargo, the 2nd appellant’s residence outside Kenya, and the fact that a defence had not been filed at the time of the application. 15. Those matters undoubtedly raised concerns regarding the respondents’ ability to recover any decree that may ultimately be issued. However, the question before the court was not whether there existed a possibility of difficulty in recovery, but whether the respondents had demonstrated that the appellants had acted, or were about to act, with the intention of frustrating execution. 16. In my view, the evidence before the trial court did not cross that threshold. 17. The fact that the 2nd appellant resides outside Kenya, without more, cannot amount to evidence that he intends to evade execution. Likewise, the failure to file a defence at an early stage of proceedings, without additional evidence of deliberate obstruction, cannot by itself justify an order under Order 39. 18. A court must be careful not to convert commercial uncertainty, foreign residence, or delay in litigation into proof of an intention to defeat justice. The Judiciary of Kenya Doc IDENTITY: 43190462849926518776325563905 Tracking Number:OON6B42026 3/ 6 19. The learned Magistrate therefore erred by placing undue weight on circumstances that, while relevant, did not satisfy the statutory requirements for the exceptional remedy sought. Whether Security Could Properly Issue Against the 2nd Appellant The second issue concerns the order requiring the 2nd appellant 20. personally to furnish security. It is a settled principle of company law that a company is a separate legal 21. entity from its directors and shareholders. A director does not ordinarily become personally liable for the obligations of the company merely because of his office. 22. The respondents were required to demonstrate an additional basis for imposing a personal obligation upon the 2nd appellant. Such circumstances may include personal assumption of liability, a personal guarantee, fraudulent conduct, abuse of the corporate structure, or evidence that the company was being used as a device to defeat lawful claims. The material before the trial court did not demonstrate any such 23. circumstances. 24. The mere fact that the 2nd appellant was a director, exercised control over the company, or resided outside Kenya was insufficient to justify making him personally responsible for securing a prospective decree against the company. 25. The learned Magistrate therefore erred in extending the order for security to the 2nd appellant without establishing an independent legal basis for doing so. Whether the Order Prejudiced the Appellants 26. The court is mindful that security before judgment serves an important purpose in protecting successful litigants from frustration of their remedies. However, the remedy must be balanced against the equally important principle that a defendant should not be subjected to onerous restrictions before liability has been established. 27. An order requiring a defendant to secure the entire amount claimed may have the practical effect of compelling payment before trial and may interfere with the right to defend the suit. The protective jurisdiction of the court must therefore be exercised 28. cautiously and only where the legal threshold has been clearly met. Conclusion The Judiciary of Kenya Doc IDENTITY: 43190462849926518776325563905 Tracking Number:OON6B42026 4/ 6 Having considered the evidence and the applicable law, I find that 29. legitimate concern regarding although the respondents demonstrated a recovery of any future decree, they did not establish the statutory grounds required for an order of security before judgment. 30. The learned Magistrate therefore exercised discretion on an insufficient evidential basis. Order s 31. The appeal accordingly succeeds. 32. The following orders shall issue: a) The appeal is hereby allowed. b) The ruling and orders of the Chief Magistrate’s Court at Mombasa delivered on 20 February 2026 in MCCC No. E007 of 2026 are hereby set aside. c) The respondents’ application for security before judgment is hereby dismissed. d) The appellants shall proceed with the defence of the suit before the trial court without the requirement of furnishing security. e) The respondents shall bear the costs of this appeal and the costs of the application before the trial court. 33. For clarity, this judgment determines only the interlocutory issue concerning security before judgment. It does not determine the merits of the respondents’ claim, which remain for determination by the trial court after hearing the parties. DATED AT MOMBASA THIS 28TH DAY OF JULY, 2026. WENDY KAGENDO JUDGE OF THE HIGH COURT Counsel: For the Appellants: Hassan Alawi & Co. AdvocatesFor the Respondents: Amakobe & Associates Advocates SIGNED BY/FOR: The Judiciary of Kenya Doc IDENTITY: 43190462849926518776325563905 Tracking Number:OON6B42026 5/ 6 □ TH E J U D I C I A R Y O F K E N Y A ★ HON. LADY JUSTICE WENDY MICHENI Mombasa High Court High Court Civil Date: 2026-07-28 15:37:40