https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/8590

Superon Schweisstechnik India Ltd v Oxychem Africa Ltd & another (Civil Suit E635 of 2023) [2026] KEHC 8590 (KLR) (Commercial and Tax) (19 June 2026) (Ruling) Neutral citation: [2026] KEHC 8590 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Civil Suit E635 of 2023 FG Mugambi, J June 19, 2026 Between Superon Schweisstechnik India Limited Plaintiff and Oxychem Africa Limited Defendant and The Registrar of Trademarks Interested Party Ruling Introduction and background 1.This Ruling concerns two applications. The first application, dated 19th March 2024, has been brought by the Defendant, (hereinafter Oxychem), under Order 26 of the Civil Procedure Rules and seeks to have the Plaintiff (hereinafter SIL) ordered to deposit security for costs to the tune of Kshs 30,960,000/= and that the said amount be deposited in a joint interest earning account in KCB Bank. The application is supported by the affidavit of Samuel Githegi Muchogu the Managing Director of Oxychem. It is opposed by the Replying Affidavit of SReekanth Sreedhara Kurup, Sil’s Vice President. The parties additionally filed written submissions which I have equally considered. 2.The background to this application is briefly as follows. SIL, a company incorporated and domiciled in India, has instituted this suit against Oxychem alleging, among other things, infringement of its copyright and trade mark, and the passing off of its products by Oxychem in Kenya. Oxychem denies those allegations and avers that it has a valid defence to the suit. 3.SIL opposes the application on the grounds that Oxychem has full knowledge of its address and contacts, the two parties having maintained a lengthy commercial relationship prior to the present dispute, that SIL is itself the aggrieved party suffering substantial and ongoing loss as a result of Oxychem's alleged infringement, that it has strong prospects of success in the suit and that Oxychem has produced no evidence of SIL's alleged impecuniosity, rendering any assertion of inability to meet a costs order purely speculative. Analysis and Determination 4.The jurisdiction of this Court to order security for costs is grounded in Order 26 Rule 1 of the Civil Procedure Rules, 2010, which provides in material part that:“In any suit the court may order that security for the whole or any part of the costs of any defendant or third or subsequent party be given by any other party.” 5.The discretion so conferred is a broad one, but it is not unfettered. The Supreme Court of Kenya, in Westmont Holdings Sdn Bhd V Central Bank of Kenya & 2 Others, SC Petition No. 16 (E023) of 2021, set out a comprehensive, non-exhaustive catalogue of considerations relevant to the exercise of this discretion. These include: the prospects of success and genuineness of the proceedings; the impecuniosity of the plaintiff and whether such impecuniosity is attributable to the defendant's conduct; whether the plaintiff is effectively in the position of a defendant; whether a security for costs order would stifle the proceedings or impede access to justice; whether the proceedings involve a matter of public importance; the proportionality of the security sought to the complexity and importance of the subject matter; the timing of the application; and, critically, whether an order for costs made against the plaintiff would be enforceable within Kenya. 6.The Supreme Court further clarified that the purpose of a security for costs order is to protect a party from the prospect of incurring unrecoverable costs in litigation brought against it, and to guard against frivolous and vexatious litigation. The applicant for such an order bears the onus of establishing that the respondent, if unsuccessful, would be unable to pay costs. 7.Equally, the Court of Appeal in Gatirau Peter Munya V Dickson Mwenda Githinji & 2 Others, CA No. 38 of 2013 [2014] eKLR reaffirmed this position, holding that it is not sufficient to merely allege that a respondent will be unable to pay costs, the applicant must prove such inability, or demonstrate a lack of good faith, to the satisfaction of the court. A bare assertion of potential impecuniosity, unsupported by evidence, will not suffice. 8.Applying the foregoing principles to the facts of the present application, it is not in dispute that SIL is a company incorporated and resident in India. It is equally not in dispute that there is no treaty, convention, or statutory framework providing for the reciprocal enforcement of Kenyan judgments in India. At least none has been presented before me. This is a significant and weighty consideration. If this suit were to be decided in Oxychem's favour and costs were awarded against SIL, Oxychem would face the considerable and potentially prohibitive burden of enforcing that costs order in a foreign jurisdiction through separate proceedings, with no guarantee of success. 9.The practical effect is that, absent a security for costs order, Oxychem risks being drawn through prolonged and expensive litigation with no realistic prospect of recovering its costs should it ultimately prevail. Oxychem deposes, and SIL has not denied, that SIL has no known assets within the jurisdiction of this Court. SIL's response, that Oxychem is aware of its address and contacts by virtue of their prior commercial relationship, does not meet this point. Knowledge of a party's address in a foreign country is not equivalent to the existence of assets against which a costs order can be enforced in Kenya. The court finds that there is a real and not merely theoretical risk that any costs order made against SIL would be unenforceable within this jurisdiction. 10.SIL contends that Oxychem has produced no evidence of its impecuniosity, and that the assertion of inability to pay costs is speculative. There is merit in this contention insofar as Oxychem has not placed before the court any financial statements, credit assessments, or other documentary evidence specifically going to SIL's financial capacity. However, I am of the view that the authorities do not require proof of impecuniosity as a condition precedent to the grant of a security for costs order where the primary concern is not the plaintiff's poverty but the unenforceability of any costs order within the jurisdiction. The two inquiries are conceptually distinct. A plaintiff may be well-resourced and yet, by reason of its foreign incorporation and absence of local assets, still expose a defendant to the irrecoverable loss of costs. I do find that this is precisely such a case. 11.In any case, SIL has not placed any evidence before this Court to suggest that an order for security would stifle these proceedings or impede its access to justice. No affidavit evidence has been placed before the court to demonstrate that SIL lacks the financial means to provide security. On the contrary, SIL holds itself out as a substantial commercial enterprise that has suffered significant losses at the hands of Oxychem. It would be inconsistent for SIL to simultaneously assert that it is a company of considerable standing whilst contending that it cannot furnish security for costs. This consideration does not weigh against the application. 12.With respect to the prospects of success and genuineness of the suit, the court is not at this stage required to conduct a detailed assessment of the merits of the suit. It suffices to note that the suit has been brought on substantive grounds of alleged intellectual property infringement and passing off, and this Court has already determined that SIL has the locus standi to seek relief in Kenya. The suit is not, on its face, frivolous or vexatious. 13.On the proportionality of the sum sought, Oxychem seeks security in the sum of Kshs 30,960,000/=. The court must satisfy itself that the amount is proportionate to the complexity and likely costs of the proceedings. In this regard, I have examined the Plaint dated 27th November 2023. The reliefs sought by SIL are, by any measure, extraordinarily substantial. The Plaint claims general damages in the sum of Kshs 600,000,000/= and exemplary damages in the further sum of Kshs 300,000,000/=, in addition to a host of other reliefs. The scale and ambition of SIL's own claim is therefore a reliable indicator of how SIL itself values and characterizes the complexity and significance of this litigation. I do therefore find that the amount sought as security for costs to be reasonably proportionate. Disposition and Final Orders 14.Accordingly, the application dated 19th March 2024 is hereby allowed. The following Orders do hereby issue:i.The plaintiff, Sreekanth Industries Limited, is hereby ordered to deposit security for costs in the sum of Kshs 30,960,000/=. within 45 days from the date of this Ruling.ii.The said sum shall be deposited into a joint interest-earning account to be opened at KCB Bank Head Office Kencom Branch, Nairobi or as otherwise agreed, in the joint names of the advocates on record for both parties.iii.Further proceedings herein including the hearing and determination of the application dated 27th November 2023 are hereby stayed pending compliance with order (b) above.iv.The costs of this application shall be in the cause. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 19TH DAY OF JUNE 2026.F. MUGAMBIJUDGEDelivered in presence of:Parties absentCourt Assistants: Lillian & Gloria