https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7042

Sunday Publishers Limited v Standard Chartered Bank Kenya Limited (Civil Case E193 of 2025) [2026] KEHC 7042 (KLR) (Commercial and Tax) (7 May 2026) (Ruling) Neutral citation: [2026] KEHC 7042 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Civil Case E193 of 2025 F Gikonyo, J May 7, 2026 Between The Sunday Publishers Limited Plaintiff and Standard Chartered Bank Kenya Limited Defendant Ruling 1.The defendant / applicant filed the notice of motion dated 28.3.2025 under Order 26 of the Civil Procedure Rules seeking provision of estimated party and party costs of Kshs. 36,436,677 as security. 2.The application is supported by the affidavit sworn by the defendant’s Head of Legal, Dr. Davidson Mwaisaka on 28.3.2025. 3.The primary grounds are that the defendant will incur significant costs to defend the plaintiff’s claim for Kshs. 1,800,000,000/-. That the defendant has a good defence because its contentions are that the plaintiff’s claims for defamation and account closure happened in 2018 are both time-barred as they ought to have been filed within 12 months and 6 years. That it supplied the plaintiff’s account statements to the Directorate of Criminal Investigations (DCI) and Kenya Revenue Authority (KRA) pursuant to a court order in MCMCC Misc Appl 3084/2018 and notice from the KRA dated 21.2.2018 respectively. 4.The defendant further highlighted that the plaintiff admitted that it has been out of business for 6 years and in debt of Kshs. 61,600,000/-. Response 5.The plaintiff filed a replying affidavit sworn by its director Ayub Savula Angatia on 24.4.2025. It was contended that in an application for security for costs, it is not intended to have the court consider the merits of the claim as urged by the defendant. 6.The plaintiff disputed the defendant’s proposition that it does not have assets or receivables and that it will not meet any costs awarded. 7.It was deposed that the plaintiff is an active company carrying out advertising service business in its magazine. That the plaintiff has also obtained judgment on debts owed to it by creditors. 8.The plaintiff further contended that various depositions in the defendant’s affidavit are incorrect and are not grounds for determining whether the court should order provision for security for costs. Submissions 9.The application was canvassed through written submissions dated 25.7.2025 and 27.6.2025 by the defendant and the plaintiff respectively. 10.The defendant’s submissions were reflective of the application, and the supporting affidavit save to add that the plaintiff’s affidavit was contradictory to the verifying affidavit which was to the effect that the plaintiff has been out of business for 6 years and in debt of Kshs. 61,600,000/-. 11.The defendant submitted that it is not required to prove the plaintiff’s insolvency to succeed in recovering costs. It relied on two key authorities, Westmont Holdings SDN BHD v Central Bank of Kenya & 2 Others [2023] KESC 11 (KLR) and Saudi Arabian Airlines Corporation v Sean Express Services Ltd [2014] KEHC 8695 (KLR) 12.The plaintiff’s submissions were also reflective of its replying affidavit. It argued that the application fails to meet the threshold in the Westmont case [supra] and therefore prayed that the application be dismissed with costs. Analysis and Determination 13.The court has the discretion to call for security for costs for the defendant be given by any other party. Order 26 Rule 1 of the Civil Procedure Rules. 14.The court’s discretion ought to be exercised reasonably and based on principles applied to the unique circumstances of the case. 15.The principles for consideration are: -“absence of known assets within the jurisdiction of court; absence of an office within the jurisdiction of court; insolvency or inability to pay costs; the general financial standing or wellness of the Plaintiff; the bona fides of the Plaintiff’s claim; or any other relevant circumstance or conduct of the Plaintiff or the Defendant.…. In the latter category, conduct by the Plaintiff will include activities which may diminish the chances of or makes recovery of costs very difficult, for instance recent close or transfer of bank accounts, close or minimizing of operations, and disposal of assets. And the conduct of the Defendant includes, filing of application for security for costs as a way of oppressing or obstructing the Plaintiff’s claim, for instance, where the defence is mere sham, or there is an admission by the Defendant of money owing except there is deliberate refusal or delay to pay money owing or refusal to perform its part of the bargain.” Saudi Arabian Airlines Corporation v Sean Express Services Ltd [supra] 16.In the Westmont case [supra] the Supreme Court stated that: -“…in determining whether it is appropriate to make an order that a party gives security, for costs, the court may have regard to the following matters and such other matters as it considers relevant in the peculiar circumstances of each case: –i.the prospects of success or merits of the proceedings,ii.the genuineness of the proceedings,iii.the impecuniosity of the plaintiff,iv.whether the plaintiff's impecuniosity is attributable to the defendant's conduct,…x.the costs of the proceedings,xi.whether the security sought is proportionate to the importance and complexity of the subject matter in dispute,xvi.security for costs is to be given in such manner, at such time and on such terms (if any) as the court may by order direct.” 17.The plaintiff’s claim here is for among others, special damages for loss of income amounting to Kshs. 1,800,000,000/-. It claims that the defendant breached provisions of the Banking Act on confidentiality by supplying its account statements to the DCI and the DPP without a lawful court order. That it further froze it account and closed it without legal basis. That it colluded with the DCI and DPP to publish false, defamatory and injurious information to the public. That the defendant’s unlawful action triggered investigations by KRA which made a fictitious tax claim of Kshs. 473,892,194/- on the strength of documents supplied by the defendant. Due to unprocedural closure of the bank account, it lost business for 6 years. 18.Paragraphs 3 and 4 above capture the gist of the defendant’s defence to the above claims. The defendant asserted that it has a good defence. 19.The plaintiff contended that in an application for security for costs, it is not intended to have the court consider the merits of the claim as urged by the defendant. 20.However, in the Westmont case [supra] the Supreme Court stated that the court may consider the prospects of success or merits of the proceedings or the genuineness of the proceedings. 21.I have considered both the plaint and the defence. On a prima facie basis, both disclose triable issues deserving of determination at trial. 22.On alleged impecuniosity, the defendant emphasized the plaintiff’s admission that it was in debt of Kshs. 61,600,000/-. Indeed, this admission is found at paragraph 14 (vii) of the plaint, reproduced below: -“As a result of loss of business, the Plaintiff has been unable to service a loan at Cooperative Bank of Kenya of Kshs. 61,600,000/- because of the action of freezing the account.” 23.The plaintiff, however, disputed the defendant's claim that it does not have assets or receivables and that it will not meet any costs awarded. It deposed that it is an active company carrying out advertising service business in its magazine. It exhibited the following: -a.Copies of its magazine issues of March 31st to April 6th 2019, September 6th to 12th 2020 and 11th April 2025.b.A copy of a judgment in HCCC E172 of 2020 awarding it Kshs. 25,351,443 24.According to the plaintiff, the defendant has not met the threshold in the Westmont case [supra]. 25.On the other hand, the defendant submitted that it is not required to prove the plaintiff's insolvency to succeed in recovering costs. 26.However, in Gatirau Peter Munya v Dickson Mwenda Kithinji & 2 others [2014] eKLR, the court stated that in an application for security for costs, the applicant ought to establish that the respondent, if unsuccessful in the proceedings, would be unable to pay costs due to poverty. There must be established some defined or concrete reasons or pre-disposition. It is not enough to allege that a respondent will be unable to pay costs in the event that he is unsuccessful. 27.However, it is this court’s view that, in an application for security for costs, the court must take a path that avoids shutting out a claim with triable issues merely because of poverty or financial hardships of the respondent. Security for costs is not to punish or prevent a party from litigating a case. 28.The evidence presented by the plaintiff is, prima facie, indicative of active business operations. 29.The court also notes that, the plaintiff alleges that the inability to service the loan was due to the defendant's freezing of its accounts. In the circumstances of this case, it is fair that such issues are litigated freely without any sense or feeling of oppression. 30.On the whole, therefore, the court finds that the defendant has not met the threshold for the orders for provision for security for costs. Disposal 31.In the upshot, the defendant’s application dated 28.3.2025 is dismissed. DATED, SIGNED AND DELIVERED THROUGH MICROSOFT TEAMS ONLINE APPLICATION THIS 7TH DAY OF MAY, 2026-----------------F. GIKONYO MJUDGEIn the presence of: -Ondieki for defendantBundotich for PlaintiffCA-Ivan/Aggrey