https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7253

Taurus Solutions Ltd & another (Miscellaneous Civil Application E555 of 2026) [2026] KEHC 7253 (KLR) (Civ) (25 May 2026) (Ruling) Neutral citation: [2026] KEHC 7253 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Civil Miscellaneous Civil Application E555 of 2026 BK Njoroge, J May 25, 2026 IN THE МАТТЕR OF THE COMPANIES ACT 2015 AND THE COMPANIES (HIGH COURT) RULES 1964 AND IN THE MATTER OF AN APPLICATION BY In the matter of Taurus Solutions Limited 1st Applicant I&M Bank Limited 2nd Applicant Ruling 1.This Ruling pertains to the Applicants’ exparte Notice of Motion dated 21st May, 2026, Through the said application, the Applicants have moved this Court seeking the following reliefs:1.That this Honourable Court does deem it prudent and expedient to certify this Notice of Motion Application as urgent.2.That there has been an inadvertent delay in registering the First Legal Charge dated 18th May, 2026 made by Taurus Solutions Limited in favour of I & M Bank Limited granting the Bank's Facilities to the Company.3.That this Honourable Court do extend the time to register the said First Legal Charge dated 18th May, 2026 for a further period of Thirty (30) days from the date of this order as provided under Section 888(2) (b) of the Companies Act, 2015, Laws of Kenya. 2.This Application was supported by the sworn affidavit of Lawrence Ng'ang'a, an Advocate of the High Court of Kenya, dated the same day as the Application. Mr. Ng’ang’a practices in the firm of M/s Taibjee & Bhalla, Advocates LLP, who have conduct of this matter on behalf of the Applicants. Issues for Determination 3.The Court has carefully considered the Motion, the statutory provisions cited, the Supporting Affidavit, and the annexures thereto. Upon such consideration, the Court is of the view that only one issue arises for determination:(a)Whether leave should be granted to the Applicant to register the First Legal Charge dated 18th May, 2026 at the Companies Registry out of time. Analysis 4.Pursuant to Section 884 of the Companies Act, the Registrar of Companies is mandated to maintain a register of charges, register such charges, issue certificates of registration thereof, and authenticate the same with the Registrar’s Official Seal. Under Section 885 of the Act, the statutory timeline for registration of a charge is thirty (30) days from the date of its creation. In the event of non-compliance, Section 888(1) of the Companies Act empowers any interested party or the company itself to apply to the Court for an extension of the prescribed period for registration. 5.Furthe r, when considering an extension under Section 888, the Court examines whether the delay was accidental or reasonably explained, whether it prejudiced creditors or members, whether granting the extension is just and fair, and whether the omission is rectifiable. This requirement that such a charge must be registered with the Registrar of Companies within thirty (30) days from the date of its creation is statutory and not discretionary. It is evident that the parties have complied with all the necessary legal requirements in the creation of the charge, save for the registration, which was delayed due to reasons sufficiently explained and which were beyond their control. 6.The Court has considered the reasons for delay as advanced by Counsel for the Applicant. There was delay in completing the transaction for the registration of the First Legal Charge which led to delayed registration. This led to the expiry of the period of thirty (30) days for the registration of the First Legal Charge. This delay is excusable. 7.That the Applicants Advocates had the conduct of preparing the First Legal Charge dated 18th March, 2026. The said First Legal Charge is yet to be registered at the Companies Registry. Although the Stamp Duty on the said First Legal Charge was paid on time, there was an inadvertent delay in completing registration of the transfer in favour of Taurus Solutions Limited and hence, the Thirty (30) days as provided under Section 885(1)(a) of the Companies Act No. 17 of 2015 lapsed in the process. The Advocates had to wait until the said registration was completed and are now ready to lodge the said First Legal Charge for registration at the Companies Registry. Therefore the failure to register the said First Legal Charge within the time prescribed by Section 885(1)(a) of the Companies Act No. 17 of 2015 Laws of Kenya was not with any fraudulent intention but was entirely due to the delay in registering the transfer of the land in favour of Taurus Solutions Limited. 8.Counsel averred that, while they were able to obtain duly registered security documents from the Lands Registry, they were unable to register the First Legal Charge at the Companies Registry as the statutory period for such registration had already lapsed during the period taken to assess, stamp, and register the Charge at the Lands Office. Pursuant to Section 885 of the Companies Act, No. 17 of 2015, the Company was required to register the First Legal Charge with the Registrar of Companies within thirty (30) days from the date of its creation. The delay in presenting the First Legal Charge for registration at the Companies Registry was occasioned by delays in the registration of the First Legal Charge, which delay was unintentional and beyond the control of both the Applicant and the Chargor. 8.The omission in the present case pertains solely to the failure to register the First Legal Charge at the Companies Registry within the statutory period prescribed under Section 885 of the Companies Act. Notwithstanding this procedural lapse, the First Legal Charge was duly executed, assessed for stamp duty, duly franked, and registered at the Lands Registry. The omission is therefore procedural in nature and, in the Court’s view, clearly rectifiable. While it is acknowledged that non-registration at the Companies Registry may affect the enforceability of the First Legal Charge as against third parties, the failure to comply with the prescribed timeline was neither wilful nor negligent. In the circumstances, the delay should not defeat an otherwise valid security instrument. This approach aligns with the provisions of Article 159(2)(d) of the Constitution, which enjoins Courts to administer justice without undue regard to procedural technicalities, and with the general principles of the Companies Act, which favour the promotion of substantive rights and commercial certainty. 9.There is no evidence on record to suggest that the delay in registration has occasioned any prejudice to the company’s creditors or members. On the contrary, the regularisation of the registration will enhance the protection of the lender’s interest and promote commercial transparency. The affidavit and annexures confirm that all substantive steps in the creation of the First Legal Charge, execution, stamping, and registration at the Lands Registry, were duly undertaken in a timely manner, save for the Companies Registry filing. Accordingly, the Court is satisfied that the Applicant has provided a reasonable explanation for the delay, that the omission is capable of remedy, and that no prejudice has been occasioned to any party. The Court therefore finds it just and equitable to exercise its discretion under Section 888(1) of the Companies Act. In the result, the prayers sought in the Notice of Motion dated 21st May, 2026 are hereby granted. Determination 10.The application dated 21st May, 2026 is allowed as follows;a.That this Honourable Court hereby certifies this Notice of Motion Application as urgent and the same is heard exparte.b.That there has been an inadvertent delay in registering the First Legal Charge dated 18th May, 2026 made by Taurus Solutions Limited in favour of I & M Bank Limited granting the Bank's Facilities to the Company.c.That this Honourable Court hereby extends the time to register the said First Legal Charge dated 18th May, 2026 for a further period of Thirty (30) days from the date of this order as provided under Section 888(2) (b) of the Companies Act, 2015, Laws of Kenya.d.That the cost of this application be costs in the course. 13.It is so ordered. 14.The file is hereby marked as closed. DATED, SIGNED AND DELIVERED AT MILIMANI THIS 25TH DAY OF MAY, 2026.NJOROGE BENJAMIN K.JUDGE