https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1550

**IN THE COURT OF APPEAL** **AT NAIROBI** **(CORAM: KORIR, NDOLO & HASSAN, JJ.A.)** **CIVIL APPEAL NO. E090 OF 2025 BETWEEN** **STICHTING RABOBANK FOUNDATION. APPELLANT** **AND** **AVA CHEM LIMITED......................................1ST RESPONDENT CHRISTOPHER IRUNGU MWANGI..................2ND RESPONDENT** *(An appeal from the Ruling and Order of the High Court of Kenya at Nairobi (J.W.W. Mongare, J.) dated 25th July 2024* ***in*** ***High Court Commercial Case No. E374 of 2022)*** ***\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\**** **JUDGMENT OF THE COURT** 1. **INTRODUCTION** 2. This appeal raises an important question concerning the juridical status of a foreign company which has not been registered under Part XXXVII of the Companies Act, 2015, and, in particular, whether non-registration under section 974 of that Act, without more, deprives such a company of the capacity or standing to institute proceedings before a Kenyan court. 3. Closely connected to that question is a second issue: whether the making of a cross-border loan or financial support arrangement by a foreign entity to a Kenyan company necessarily amounts to “carrying on business in Kenya” within the meaning of section 974 of the Companies Act. 4. A third issue concerns the proper province of a preliminary objection. The Court is called upon to determine whether a dispute as to the geographical location, nature, frequency and character of a foreign company’s activities may properly be resolved as a pure point of law, without evidence. 5. These questions are of considerable commercial importance. Modern commerce is frequently transnational. Contracts may be negotiated electronically across several jurisdictions, executed in counterparts, funded from a foreign bank account, performed partly in Kenya, and enforced in a forum chosen by the parties. The mere presence of a foreign element in a commercial transaction cannot, without careful statutory analysis, answer the distinct questions of corporate registration, regulatory compliance, contractual enforceability, and access to justice. 1. The appeal arises from the ruling of the High Court at Nairobi (J.W.W. Mongare, J.) delivered on 25th July 2024 in Commercial Case No. E374 of 2022. The learned Judge upheld a preliminary objection taken by the respondents and struck out the appellant’s suit for want of locus standi. 2. The central basis of the High Court’s decision was that the appellant, being a foreign entity not registered in Kenya under section 974 of the Companies Act, lacked the requisite standing to institute and maintain the suit. 3. The appellant challenges that conclusion. It contends, principally, that section 974 does not make registration a condition precedent to the institution of proceedings by a foreign company; that the section prescribes its own consequence for contravention; and that, in any event, the question whether the appellant was “carrying on business in Kenya” involved contested questions of fact which could not properly be determined through a preliminary objection. 4. The respondents support the decision of the High Court. Their position is that the appellant was a foreign company; that it had not been registered under the Companies Act; that the financial arrangement giving rise to the suit amounted to carrying on of business in Kenya; and that its non-registration disentitled it from maintaining the proceedings. 1. **BACKGROUND** 2. The appellant, Stichting Rabobank Foundation, instituted High Court Commercial Case No. E374 of 2022 against the respondents seeking recovery of USD 230,868.51, together with costs and interest. The dispute had its origin in a financial relationship between the parties. 3. According to the appellant, on or about 3rd October 2016, the respondents applied for financial support amounting to USD 180,116. A Financial Support Agreement was subsequently executed, under which the 2nd respondent (Christopher Irungu Mwangi), a director of the 1st respondent (AVA Chem Limited), furnished a personal guarantee by way of a deed of suretyship. Following execution, the appellant advanced the agreed funds to the 1st respondent. 4. On 6th December 2018, the parties entered into an amendment agreement restructuring the repayment obligations. This arrangement addressed the outstanding principal and accrued interest and provided for repayment by instalments. 1. The appellant contended that the respondents thereafter defaulted in meeting their repayment obligations. Central to the dispute was the correspondence dated 28th April 2022, in which, according to the appellant, the 1st respondent acknowledged its indebtedness and undertook to make an initial payment followed by monthly instalments. The 2nd respondent similarly acknowledged the 1st respondent’s indebtedness and, according to the appellant, undertook to make payment in the event of default by the 1st respondent. 2. The debt was not settled to the appellant’s satisfaction. Consequently, by a plaint dated 14th September 2022, the appellant instituted proceedings against the respondents seeking judgment for USD 230,868.51, together with interest and costs. The respondents entered appearance and filed a defence. 1. The pleadings revealed that the existence of the financial relationship was not wholly denied. The respondents explained that difficulties in repayment had arisen from adverse business circumstances. On 13th December 2022, the appellant filed an application seeking judgment on admission. Before that application was determined, however, the respondents lodged a Notice of Preliminary Objection dated 24th May 2024. 1. The preliminary objection rested on two broad propositions: first, that the appellant was not a juristic person capable of instituting and maintaining the suit; and second, that the appellant’s cause of action arose from a Financial Support Agreement which, according to the respondents, amounted to carrying on business in Kenya in contravention of Part XXXVII of the Companies Act, and section 974 in particular. 2. The High Court upheld the preliminary objection. The learned Judge concluded that, because the appellant had not been registered under section 974 of the Companies Act, it lacked locus standi to institute the proceedings. The suit was accordingly struck out. Aggrieved by that decision, the appellant lodged the present appeal. 3. **THE APPEAL** 4. The appellant’s memorandum of appeal contains five grounds. Although differently expressed, the complaints may conveniently be condensed into the following issues: * 1. *whether the learned Judge erred in determining disputed factual matters through a preliminary objection;* 2. *whether non-registration under section 974 of the Companies Act deprived the appellant of locus standi or capacity to institute proceedings in Kenya;* 3. *whether the transaction giving rise to the suit constituted “carrying on business in Kenya” within the meaning of section 974;* 4. *whether the learned Judge correctly interpreted section 974(2), including its reference to the offering of debentures in Kenya; and* 5. *What orders should issue.* 1. **APPELLANT’S SUBMISSIONS** 2. The appellant submitted that the High Court fundamentally conflated two distinct legal concepts: the statutory regulation of a foreign company carrying on business in Kenya and the juridical capacity of a foreign legal person to institute proceedings before a Kenyan court. 3. The appellant argued that section 974(1) of the Companies Act prohibits an unregistered foreign company from carrying on business in Kenya, but does not provide that such a company ceases to exist as a juristic person or is barred from suing. Particular reliance was placed on section 974(3), which prescribes a penalty for contravention of subsection (1). It was submitted that where Parliament has expressly stipulated the consequence of breach, a court should not introduce an additional and far more drastic sanction—namely, denial of access to the courts—unless the statute expressly or by necessary implication requires it. 1. The appellant further argued that locus standi concerns a party’s sufficient interest in the subject matter of the proceedings. Since the suit was for recovery of a debt allegedly owed directly to the appellant, its interest in the litigation could hardly be disputed. 2. In addition, the appellant challenged the suitability of the preliminary objection, relying on the celebrated decision in ***Mukisa Biscuit Manufacturing Co. Ltd v West End*** ***Distributors Ltd*** [1969] EA 696 for the proposition that a preliminary objection must raise a pure point of law, argued on the assumption that all facts pleaded by the opposite party are correct. 1. It was maintained that whether the appellant was carrying on business in Kenya could not be determined merely from its foreign incorporation or from the existence of the Financial Support Agreement. The appellant submitted that both the agreement and the amendment agreement were executed through the parties’ respective offices, and that the funds were disbursed from its bank account in the Netherlands. Those circumstances, it contended, demonstrated that the question whether it was carrying on business in Kenya was a contested factual issue requiring evidence. 1. The appellant also disputed the High Court’s interpretation of section 974(2). In its view, the statutory reference to “offering debentures in Kenya” could not simply be equated with advancing a loan to a Kenyan entity. 2. On that basis, the appellant urged this Court to allow the appeal, set aside the ruling of the High Court, and permit the suit to proceed on its merits. 3. **THE RESPONDENTS’ SUBMISSIONS** 4. The respondents opposed the appeal and supported the decision of the High Court. They submitted that it was not in dispute that the appellant was a foreign company and that it had not been registered in Kenya under section 974 of the Companies Act. In their view, the preliminary objection raised a pure point of law concerning the appellant’s standing and capacity to maintain proceedings. Relying on the principles in ***Mukisa Biscuit*** ***Manufacturing Co. Ltd v West End Distributors Ltd*** [1969] EA 696, they maintained that the undisputed facts were sufficient to permit determination of the objection. 1. The respondents argued that a non-existent person cannot sue and that, once a court is satisfied that a plaintiff lacks legal capacity, proceedings instituted by such a plaintiff cannot be maintained. They further submitted that section 974 must be construed broadly. In their view, the phrase “carrying on business in Kenya” is not confined to the two examples expressly mentioned in section 974(2), namely offering debentures in Kenya or acting as a guarantor for debentures offered in Kenya. The words “includes (but is not limited to)” demonstrate, according to them, that the statutory concept is wider. 2. They contended that financial activity by a foreign company may constitute carrying on business in Kenya depending on the nature and extent of the activity. On that basis, they maintained that the Financial Support Agreement could properly be regarded as the carrying on of business in Kenya. 3. Accordingly, the respondents urged this Court to dismiss the appeal with costs. 4. **OUR MANDATE ON A FIRST APPEAL** 5. This being a first appeal, this Court is entitled and obliged to reconsider the material that was before the High Court and to draw its own conclusions, bearing in mind the nature of the decision under appeal. 6. The present appeal, however, does not arise from a trial in which witnesses testified. It arises from the determination of a preliminary objection. The essential material is therefore found in the pleadings, the preliminary objection, the applicable statutory provisions, and the legal conclusions drawn from them. 7. The principal questions before us are questions of law and mixed questions of law and fact. 8. **THE NATURE OF A PRELIMINARY OBJECTION** 9. We begin with the procedural foundation upon which the respondents’ objection was determined. The law governing preliminary objections is settled. In ***Mukisa Biscuit*** ***Manufacturing Co. Ltd v West End Distributors Ltd*** [1969] EA 696, Law, JA explained that a preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication from the pleadings, and which, if argued successfully, may dispose of the suit. Sir Charles Newbold, P., added the equally important qualification that a preliminary objection is in the nature of a demurrer: it raises a pure point of law on the assumption that all the facts pleaded by the other side are correct. It cannot properly be raised where facts have to be ascertained or where the court is required to exercise judicial discretion. That principle remains a foundational rule of civil procedure. 1. The Supreme Court reiterated the same approach in ***Aviation &*** ***Allied Workers Union Kenya v Kenya Airways Limited & 3*** ***others*** [2015] eKLR, emphasizing that a preliminary objection must arise from a pure question of law and presupposes the absence of a proper contest as to the material facts upon which that question is founded. A court considering a preliminary objection must therefore identify with precision: (a) the legal proposition said to dispose of the matter; (b) the facts necessary for application of that proposition; and (c) whether those facts are admitted, undisputed or ascertainable without receiving evidence. 1. The label attached to an objection does not determine its character. An objection may invoke a statutory provision and yet remain unsuitable for preliminary determination if application of the statute depends upon disputed facts. Conversely, the mere existence of factual allegations in the pleadings does not prevent a genuine pure point of law from being determined. The inquiry is functional. 2. In the present case, one fact was common ground: the appellant had not been registered as a foreign company under Part XXXVII of the Companies Act. But that fact, standing alone, did not answer the entire objection. For the respondents to establish a contravention of section 974(1), it was necessary to show that the appellant was “carrying on business in Kenya.” Whether that conclusion followed automatically from the pleadings is therefore the critical question. 3. **SECTION 974 OF THE COMPANIES ACT** 4. Section 974(1) of the Companies Act provides, in substance, that a foreign company shall not carry on business in Kenya unless it is registered under the relevant Part, or has applied for registration and the application has not been dealt with within the prescribed period. Subsection (2) clarifies that, for purposes of subsection (1), carrying on business in Kenya includes, but is not limited to, offering debentures in Kenya or acting as a guarantor for debentures offered in Kenya. Subsection (3) prescribes a penal consequence for contravention. 5. The statutory architecture is significant. Subsection (1) creates the regulatory prohibition; subsection (2) assists in defining the conduct falling within the prohibition; and subsection (3) provides a consequence for contravention. 6. Equally important, however, is what the section does not expressly say. It does not provide that an unregistered foreign company ceases to be a juristic person. It does not provide that every contract entered into by such an unregistered foreign company is void. It does not provide that every debt due to such a company is extinguished. It does not provide that an unregistered foreign company is incapable of being sued. Nor does it expressly provide that such a company is prohibited from instituting proceedings before a Kenyan court. 1. Those omissions cannot be casually supplied by judicial interpretation. **I. LOCUS STANDI, LEGAL PERSONALITY AND STATUTORY COMPLIANCE** 1. Much of the difficulty in this matter arose from the treatment of locus standi, legal personality, and statutory registration as though they were interchangeable concepts. They are not. Legal personality concerns whether the law recognises an entity as capable of bearing rights and obligations. Capacity to sue concerns whether that legal person may invoke the adjudicative process in its own name. Locus standi, in its conventional sense, concerns whether the claimant has a sufficient interest in the subject matter of the proceedings. Statutory registration, on the other hand, concerns compliance with a regulatory regime prescribed by legislation. 2. Depending upon the statute, non-compliance with a registration requirement may have consequences for legal capacity, contractual enforceability, or access to court. But such consequences must be found in the statute, properly construed. They are not to be presumed merely because registration is mandatory. 1. The appellant pleaded that it was an entity incorporated in the Netherlands. Its juridical existence under the law of its incorporation was not displaced merely because it had not registered as a foreign company in Kenya. A foreign corporation does not become a non-entity at Kenya’s border. The question whether it is required to register in order to conduct particular activities within Kenya is conceptually distinct from the question whether it exists as a legal person. 2. In the present dispute, the appellant claimed that money was owed to it. If that claim was legally maintainable, the appellant plainly had a direct and substantial interest in its recovery. It was not a stranger seeking to litigate another person’s rights; the alleged debt was said to be owed to the appellant itself. The conclusion that the appellant lacked locus standi merely because it was not registered under section 974, therefore, rested upon an impermissible conflation of separate legal questions. 3. **DOES SECTION 974 CREATE A BAR TO SUIT?** 4. The decisive question is whether section 974 should nevertheless be interpreted as imposing, by necessary implication, a disability upon an unregistered foreign company to institute proceedings in Kenya. In our view, it should not. The starting point is the statutory text. Parliament prohibited an unregistered foreign company from “carrying on business in Kenya.” It did not prohibit such a company from “instituting proceedings,” “maintaining an action,” “recovering a debt,” or “enforcing a contract.” Those are familiar legislative concepts, and had Parliament intended to impose a litigation disability, it could have said so expressly. 5. The distinction is not merely semantic. The institution of proceedings for the protection or enforcement of an existing right is not necessarily synonymous with carrying on the business which gave rise to that right. A foreign entity may require access to a Kenyan court for many reasons unrelated to the carrying on of business in Kenya: it may seek to protect property, defend proceedings instituted against it, enforce an arbitral award, obtain urgent conservatory relief, or recover a debt arising from a transaction concluded outside Kenya. To hold that every unregistered foreign company is, solely by reason of non-registration, incapable of approaching a Kenyan court would produce consequences extending far beyond the language of section 974. Such a restriction upon access to the courts should not be inferred from silence. 1. Further, the Act itself prescribes a consequence for contravention of section 974(1). Where legislation creates an obligation and expressly specifies the consequence of breach, a court should be slow to superimpose an additional civil disability of a fundamentally different character unless such consequence arises from the language, purpose, and scheme of the legislation. We do not suggest that the specification of a statutory penalty invariably excludes every other legal consequence, nor do we hold that contracts made in breach of a statute are always enforceable. The consequences of statutory illegality depend upon the particular legislation, its purpose, language, and context. 2. Our conclusion is narrower. Section 974 does not, merely by reason of non-registration, expressly or by necessary implication extinguish the juridical personality of a foreign company or deprive it of standing to institute proceedings in Kenya. 1. Accordingly, the High Court erred in treating non-registration as automatically dispositive of the appellant’s locus standi. 2. **“CARRYING ON BUSINESS IN KENYA”** 3. The respondents nevertheless contended that the appellant was in fact carrying on business in Kenya. That issue requires separate consideration. The expression “carrying on business” is not susceptible to an abstract, universal formula applicable irrespective of statutory context. Ordinarily, it connotes a degree of commercial activity, continuity, system, or presence sufficient to connect the foreign entity’s operations to the jurisdiction. 4. Whether a particular activity amounts to carrying on business may depend upon such matters as the nature of the entity’s ordinary business; the number and frequency of transactions; the place where contracts are negotiated and concluded; the place of performance; the existence of an office, branch, employees or agents; the duration and continuity of the activities; the location from which funds or services are supplied; the degree of commercial presence maintained in Kenya; and the particular statutory purpose for which the expression is being interpreted. No single factor is necessarily decisive. A solitary transaction may, depending upon its nature and the statutory context, be sufficient in one case and insufficient in another. Equally, the mere fact that one contracting party is situated in Kenya does not necessarily mean that the foreign counterparty is carrying on business in Kenya. The inquiry is one of substance rather than labels. 1. In the present case, the appellant maintained that the Financial Support Agreement was executed through the parties’ respective principal offices and that the funds were advanced from its bank account in the Netherlands. The respondents, on the other hand, contended that the financial arrangement was directed to a Kenyan company and constituted commercial activity in Kenya. Those competing positions reveal the difficulty with determining the matter as a pure preliminary point. 2. The question was not simply whether the appellant was foreign and unregistered—those matters were not disputed. The operative question was whether the particular conduct relied upon amounted to carrying on business in Kenya within the meaning of the Act. That inquiry required an adequate factual foundation. The pleadings did not establish, as an admitted fact, the full extent of the appellant’s activities in Kenya. There was no agreed factual basis establishing whether the transaction was isolated or part of a systematic course of commercial activity. There was no admitted factual basis concerning the appellant’s physical or operational presence in Kenya. Nor was there an agreed factual basis from which the geographical character of the transaction could conclusively be determined. 1. In those circumstances, the issue was not suitable for final determination on a preliminary objection. 2. **SECTION 974(2) AND DEBENTURES** 3. The parties also addressed the meaning of section 974(2). The subsection provides that carrying on business in Kenya “includes (but is not limited to)” offering debentures in Kenya or being a guarantor for debentures offered in Kenya. Two points are immediately apparent. 4. First, the provision is inclusive rather than exhaustive. Accordingly, the statutory concept of carrying on business is not confined to the two specified activities. To that extent, the respondents are correct. Second, however, the fact that the provision is inclusive does not mean that every transaction having a financial character automatically constitutes carrying on business in Kenya. The statutory examples cannot be treated as meaningless, nor can the phrase “includes (but is not limited to)” transform the statutory concept into one without boundaries. The activity relied upon must still, viewed objectively and in context, amount to carrying on business in Kenya. 1. We therefore do not accept the proposition that the mere advancement of a loan or financial support to a Kenyan entity necessarily and without further inquiry amounts to “offering debentures in Kenya.” A loan and a debenture are not invariably synonymous. The statutory characterisation of an instrument depends upon its legal attributes and the applicable definition. Whether the particular Financial Support Agreement fell within a statutory category of debenture or otherwise constituted the carrying on of business was not a matter that could safely be determined through assumption. It required consideration of the agreement, the nature of the instrument, the surrounding circumstances and, where disputed, evidence. 2. We therefore refrain from making a final factual determination that the appellant was, or was not, carrying on business in Kenya. That question was not properly tried before the High Court. It would be inappropriate for this Court, on an appeal from a preliminary objection, to make definitive factual findings upon matters that the parties have not had an opportunity to prove at trial. 3. Our holding is that the High Court could not properly conclude, at the preliminary stage and on the material before it, that the appellant was carrying on business in Kenya in contravention of section 974 and, on that basis, strike out the suit for want of locus standi. 4. **THE RESPONDENTS’ “NON-EXISTENT PERSON” ARGUMENT** 5. The respondents further argued that a non-existent person cannot sue. As a general proposition, that is uncontroversial. Proceedings instituted in the name of a legally non-existent entity may indeed be incompetent. But that proposition does not resolve the present appeal. 6. The appellant did not cease to exist merely because it was incorporated outside Kenya. Nor does section 974 declare an unregistered foreign company non-existent. The question whether the appellant was validly constituted under the law governing its creation is distinct from whether it complied with a Kenyan registration requirement applicable to foreign companies carrying on business here. No sufficient legal basis was demonstrated for treating those distinct inquiries as identical. 7. The respondents’ argument therefore cannot sustain the order striking out the suit. 8. **ACCESS TO JUSTICE AND STATUTORY INTERPRETATION** 9. Our conclusion is reinforced by the constitutional setting in which statutes affecting access to courts must be interpreted. Article 48 of the Constitution requires the State to ensure access to justice for all persons, while Article 50(1) guarantees every person the right to have a dispute that can be resolved by the application of law decided in a fair and public hearing before a court or other independent and impartial tribunal or body. 10. Those provisions do not exempt foreign entities from compliance with Kenyan law, nor do they confer immunity from regulatory requirements. They do, however, caution against reading into legislation an exclusion from the courts which Parliament has not expressed and which is not required by the statutory scheme. A court must enforce statutory prohibitions, but it must enforce the prohibition enacted by Parliament, not a different prohibition created judicially. 1. The rule of law requires both fidelity to statutory commands and restraint against enlarging statutory disabilities beyond their proper scope. 2. **THE PROPER APPROACH TO SECTION 974** 3. Given the importance of the issue and the possibility of recurrence in commercial litigation, we consider it useful to state the applicable principles. 4. *First, a foreign company’s juridical existence is not extinguished merely because it has not been registered under Part XXXVII of the Companies Act.* 5. *Second, section 974(1) regulates the carrying on of business in Kenya by a foreign company.* 6. *Third, whether a foreign company is “carrying on business in Kenya” is a question to be determined from the nature, extent, continuity and territorial connection of the relevant activities, construed in light of the Companies Act.* 7. *Fourth, section 974(2) is inclusive and not exhaustive. Activities other than those expressly listed may constitute carrying on business in Kenya.* 8. *Fifth, the mere fact that a foreign company has entered into a transaction with a Kenyan person or entity does not, without more, necessarily establish that the foreign company is carrying on business in Kenya.* 9. *Sixth, non-registration under section 974 does not, without express statutory language or necessary implication, automatically deprive a foreign company of locus standi or capacity to institute proceedings before a Kenyan court.* 10. *Seventh, the legal consequences of any established contravention of section 974 must be determined from the Companies Act and the general law applicable to the particular dispute; they should not be assumed.* 11. *Eighth, where the question whether a foreign company was carrying on business in Kenya depends upon contested facts, the issue is ordinarily unsuitable for final determination by way of preliminary objection.* 12. Those principles preserve the regulatory purpose of the Companies Act without converting a registration provision into an unstated prohibition against access to justice. 13. **APPLICATION TO THE PRESENT APPEAL** 14. Applying those principles, the learned Judge was entitled to take judicial notice of the undisputed fact that the appellant had not been registered in Kenya. The Judge was not, however, entitled to proceed from that fact directly to the conclusion that the appellant lacked locus standi. The statutory question was whether the appellant was carrying on business in Kenya, and that question was contested. Its resolution depended upon the legal and factual character of the Financial Support Agreement and the broader circumstances of the appellant’s activities. Those matters were not established by undisputed facts capable of sustaining a preliminary objection. 1. Further, even if a contravention of section 974 were ultimately established, the further conclusion that the appellant was therefore legally incapable of suing did not follow from the language of the section. The preliminary objection therefore failed at two distinct levels. First, it required the determination of a contested factual premise. Second, the legal consequence attributed to non-registration—automatic want of locus standi— was not supported by section 974. The learned Judge therefore erred in upholding the objection and striking out the suit. 2. **JUDGMENT ON ADMISSION** 3. The record and the parties’ submissions refer to the appellant’s application for judgment on admission. That application was not finally determined on its merits before the suit was struck out. The appellant has drawn attention to correspondence and affidavit evidence which, it says, contain clear acknowledgments of indebtedness. The respondents, on the other hand, sought revised repayment arrangements. 1. We express no concluded view on the merits of that application. Whether an admission is sufficiently clear, unequivocal and unconditional to justify judgment under the applicable procedural rules is a matter for determination by the High Court upon consideration of the application and the responses thereto. The jurisdiction of this Court in the present appeal is directed to the correctness of the ruling on the preliminary objection. It would therefore be inappropriate to determine, as an appellate court, an interlocutory application which remains undetermined on its merits by the court of first instance. 1. Upon reinstatement of the suit, the High Court shall be at liberty to determine the pending application and thereafter give appropriate directions for the disposal of the suit. 2. **CONCLUSION** 3. The right of a foreign company to invoke the jurisdiction of a Kenyan court cannot be defeated merely by pointing to its foreign incorporation or its non-registration under section 974 of the Companies Act. The statute must be applied according to its terms. Registration is required where a foreign company is carrying on business in Kenya within the meaning of the Act. Whether a company is in fact carrying on business is a distinct inquiry, and the consequences of non-registration must be derived from the statute itself rather than assumed. 4. In this case, the High Court conflated regulatory non-registration with juridical non-existence and want of locus standi. It further determined a fact-sensitive question—whether the appellant was carrying on business in Kenya—at the preliminary stage without a sufficiently undisputed factual foundation. The result was that a substantive commercial claim was terminated without trial on the basis of a statutory disability which section 974 does not expressly impose. 5. Such an approach undermines both the statutory scheme and the constitutional imperative of access to justice. The ruling of the High Court cannot therefore stand. 6. **DISPOSITION** 7. Accordingly, we make the following orders: 1. The appeal is hereby allowed. 2. The ruling and order of the High Court of Kenya at Nairobi (J.W.W. Mongare, J.) dated 25th July 2024 in High Court Commercial Case No. E374 of 2022, upholding the respondents’ preliminary objection and striking out the appellant’s suit, are hereby set aside. 3. The respondents’ Notice of Preliminary Objection dated 24th May 2024 is hereby dismissed. 4. High Court Commercial Case No. **E374 of 2022,** **Stichting Rabobank Foundation v AVA Chem Limited** **& Christopher Irungu Mwangi**, is hereby reinstated for hearing and determination before the High Court before any Judge other than J.W.W. Mongare, J. * 1. For the avoidance of doubt, nothing in this judgment shall be construed as determining the merits of the appellant’s application for judgment on admission, the substantive debt claim, or any other properly pleaded question requiring evidentiary determination concerning the appellant’s activities in Kenya. * 1. The appellant shall have the costs of this appeal and of the preliminary objection in the High Court. 1. Those shall be the orders of the Court. **Dated and delivered at Nairobi this 31st day of July, 2026** **W. KORIR** **..............................** **JUDGE OF APPEAL** **L. M. NDOLO** **................................ JUDGE OF APPEAL** **AHMED HASSAN** **................................ JUDGE OF APPEAL** *I certify that this is a True copy of the original* *Signed* ***DEPUTY REGISTRAR***