[2022] KEHC 12482 (KLR)
The court found that while the judgment creditor is entitled to full settlement of the decretal sum, the judgment debtor's public functions and the operational paralysis caused by freezing all its accounts warranted a balancing of interests. The court exercised its discretion to protect both parties by ordering the...
Source-derived case information.
- Citation
- [2022] KEHC 12482 (KLR)
- Parties
- Applicant: Rachier & Amollo LLP; Respondent: Kenya Bureau of Standards; Respondent: National Bank of Kenya; Respondent: Cooperative Bank of Kenya; Respondent: Kenya Commercial Bank Limited; Respondent: Safaricom Limited
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Miscellaneous Cause E237 of 2022
- Procedural Posture
- Miscellaneous Cause / Ruling on Garnishee Proceedings and Interlocutory Applications
- Outcome
- Conditional lifting of garnishee nisi orders; decretal sum to be deposited in escrow account.
- Judges
- DO Chepkwony
- Legal Topics
- Garnishee Orders, Decretal Sum Enforcement, Escrow Accounts, Public Interest Considerations
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Rachier & Amollo LLP
Applicant
Kenya Bureau of Standards
Respondent
National Bank of Kenya
Respondent
Cooperative Bank of Kenya
Respondent
Kenya Commercial Bank Limited
Respondent
Safaricom Limited
Respondent
Procedural Posture
Miscellaneous Cause / Ruling on Garnishee Proceedings and Interlocutory Applications
Legal Issues
- 1 Whether the garnishee nisi orders freezing the judgment debtor's accounts should be lifted pending full settlement of the decretal sum.
- 2 Whether the judgment debtor should be allowed to deposit the decretal sum in an escrow account to balance public interest and the creditor's rights.
Ratio Decidendi
The court found that while the judgment creditor is entitled to full settlement of the decretal sum, the judgment debtor's public functions and the operational paralysis caused by freezing all its accounts warranted a balancing of interests. The court exercised its discretion to protect both parties by ordering the lifting of the garnishee nisi orders, conditional upon the judgment debtor depositing the entire decretal sum in an escrow account held jointly by counsel for both parties. This approach secures the creditor's interests while allowing the debtor to continue its essential public functions, thus serving the broader public interest.
Court Disposition
Conditional lifting of garnishee nisi orders; decretal sum to be deposited in escrow account.
Orders
- The orders of Garnishee Nisi issued on 22nd April 2021 in respect of the cited accounts are lifted, subject to the Judgment Debtor depositing the entire decretal sum in an escrow account in the names of counsel for the Judgment Debtor and Judgment Creditor.
Full Case Text
Judgment text and source record
30 paragraphs
Rachier & Amollo LLP v Kenya Bureau of Standards; National Bank of Kenya & 3 others (Garnishee) (Miscellaneous Cause E237, E238, E239, E240, E241, E247, E248 & E249 of 2022 (Consolidated)) [2022] KEHC 12482 (KLR) (Commercial and Tax) (26 August 2022) (Ruling)
Neutral citation: [2022] KEHC 12482 (KLR)
Republic of Kenya
In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)
Commercial and Tax
Miscellaneous Cause E237, E238, E239, E240, E241, E247, E248 & E249 of 2022 (Consolidated)
DO Chepkwony, J
August 26, 2022
Between
Rachier & Amollo LLP
Creditor
and
Kenya Bureau of Standards
Judgment debtor
and
National Bank of Kenya
Garnishee
Cooperative Bank of Kenya
Garnishee
Kenya Commercial Bank Limited
Garnishee
Safaricom Limited
Garnishee
Ruling
1. On 19th August, 2022, this matter came up for parties to highlight their respective submissions in respect of the application dated 2nd August, 2022 filed by the Judgment Creditor and 4th August, 2022 filed by the Judgment Debtor.
2. In winding up his highlight, Mr. Nyaanga, counsel for the Judgment Debtor requested that the court allows the Judgment Debtor to open an account in which it can deposit 50% of the decretal amount and they be allowed to operate the other accounts. The reasons given for this is that the Judgment Debtor’s operations have been stalled and it is unable to pay salaries due to the freeze on all its accounts. Counsel for the Judgment Debtor invited the court to take judicial Notice of the important functions performed by the Judgment Debtor which include inspection, market surveillance, products conformity among others. This was vehemently opposed by Dr. Arwa, counsel for the Judgment Creditor who stated that just because the Judgment Debtor operates important public functions, does not mean it should be given preferential treatment as if they are above the law yet, the Judgment Creditor is entitled to full settlement of the decretal amount.
3. It is not denied that the Judgment Creditor has a decree which is pending execution and is subject of the garnishee proceedings herein, which are also in order as a mode of execution. It is also not in dispute that the Judgment Debtor is an agency which carries our public functions.
4. I have taken into consideration the predicament the Judgment Debtor finds itself in view of the Garnishee Nisi Orders in existence against it and the interests of the Judgment Creditor who is entitled to full settlement of the decree herein. In public interest, and bestowed with the duty to accord all parties in a dispute justice, I find there is need to protect the interests of the two contesting parties by securing the amount in contestation.
5. I therefore order that the orders of Garnishee Nisi issued on 22nd day of April, 2021 in respect of the cited accounts be and is hereby lifted subject to the Judgment Debtor depositing the entire decretal sum on an escrow account in the names of counsel for the Judgment Debtor and Judgment Creditor.It is hereby so ordered.
RULING DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBI THIS 26THDAY OFAUGUST , 2022. D. O. CHEPKWONYJUDGE