https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/8644

Truckparts Trading & Services Ltd & 3 others v Aslan & 2 others (Commercial Case E409 of 2025) [2026] KEHC 8644 (KLR) (Commercial and Tax) (19 June 2026) (Ruling) Neutral citation: [2026] KEHC 8644 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Case E409 of 2025 JWW Mong'are, J June 19, 2026 Between Truckparts Trading & Services Limited 1st Plaintiff Shire Salad Matan 2nd Plaintiff Mohammed Shire Matan 3rd Plaintiff Abdi Mohammed Noor 4th Plaintiff and Mehmet Aslan 1st Defendant Aslan Truck Trading & Services Limited 2nd Defendant Sampa Automotive Kenya Limited 3rd Defendant Ruling Introduction and Background 1.What is before the court for determination is the Plaintiffs’ application dated 12th March 2025 seeking a temporary injunction to restrain the 1st & 2nd Defendants(“Mehmet” and “Aslan Truck Trading”) from selling or disposing of any of their assets, stock, or spare parts and bank accounts held by them, including those at Diamond Trust Bank( 0XXX001 and 0XXXX01) and Stanbic Bank (0100XXXXXX28). They also seek an order to compel Mehmet to provide all bank and M-Pesa statements for the 1st Plaintiff (“Truckparts Trading”) and Aslan Truck Trading’s accounts for further scrutiny. 2.The application is supported by the affidavits of the 2nd Plaintiff(“Shire”) sworn on 12th March 2025 and 29th April 2025 and it is opposed by Mehmet and Aslan Truck Trading through the Grounds of Opposition dated 2nd April 2025 and the replying affidavit of Mehmet sworn on the same date. The 3rd Defendant(“Sampa Automotive”) has also opposed the application through the replying affidavit of Mehmet sworn on 4th April 2025. The application has been canvassed by way of written submissions which I have considered together with the pleadings and I will be making relevant references to in my analysis and determination below. Analysis and Determination 3.From the submissions, I propose to first deal with the technical and preliminary issues raised by the Defendants that this matter ought to be stayed and referred to arbitration and that the Plaintiffs ought to seek leave of the court to continue with this suit as a derivative claim. The Defendants have stated that the 2nd – 4th Plaintiffs are minority shareholders/directors and that Truckparts Trading is the one whose rights have been violated and therefore, the Plaintiffs cannot sue in their own names. That they ought to have filed a derivative claim under sections 238-241 of the Companies Act, which requires first obtaining leave. 4.Section 238 of the Companies Act defines a derivative claim to mean proceedings by a member of a company over a cause of action vested in the company and seeking relief on behalf of the company. I note that the Plaintiffs did not address this issue either in their supplementary affidavit or submissions. However, it is clear that the violations being complained about by the Plaintiffs are those of the company, Truckparts Trading. They accuse Mehmet, being the majority shareholder of Truckparts Trading of allegedly been siphoning funds, stock, and spare parts from the company to Aslan Truck Trading, directing customers to pay into his personal accounts or Aslan Truck Trading’s accounts and diverting business and imported stock to Aslan Truck Trading. It has not been disputed that this suit and application have not been brought as a derivative claim. I however note that leave to institute a derivative claim can be sought even after the commencement of the suit. My finding is that in view of the fact that the suit has not been heard and determined, there is still room for the Plaintiffs to seek leave to file a derivative suit (see Wekhan Investment Limited & another v Wambui & 3 others [2021] KEHC 407 (KLR)] 5.On the issue of arbitration, it is not in dispute that clause 20 of the Share Sale Agreement attached by the Plaintiff states that any dispute "….arising out of or relating to this Agreement" shall be resolved through arbitration first. I also note that the Plaintiffs did not comment on this issue in their supplementary affidavit or submissions or argue why the court should ignore it. The Defendants argued that the court should stay this suit and refer the matter to arbitration. As per section 6 of the Arbitration Act, if a party applies for a stay of proceedings and there is a valid arbitration agreement, the court must refer the matter to arbitration. The Plaintiffs have not even attempted to argue that the dispute falls outside the arbitration clause. 6.In any event, whereas I am inclined to stay these proceedings and refer the matter to arbitration, I am aware that under section 7 of the Arbitration Act, the court can still grant interim relief to preserve the subject matter of the arbitration. As submitted by the parties, the principles for granting a temporary injunction are well settled. The Plaintiffs must demonstrate that they have a prima facie case with a probability of success, demonstrate irreparable injury which cannot be compensated by an award of damages if a temporary injunction is not granted, and if the court is in doubt show that the balance of convenience is in their favour (see Giella v Cassman Brown & Co., Ltd. [1973] E.A. 358). In Nguruman Limited v Jan Bonde Nielsen& 2 others [2013] KECA 347 (KLR), the Court of Appeal reiterated these conditions and further clarified that they are to be applied as separate, distinct and logical hurdles which an applicant is expected to surmount sequentially. This means that if the applicant does not establish a prima facie case, then irreparable injury and balance of convenience do not require consideration. On the other hand, if a prima facie case is established, then the court will consider the other conditions. 7.As to what constitutes a prima facie case, the parties have also rightly submitted that the Court of Appeal in Mrao Ltd v First American Bank of Kenya Ltd & 2 others [2003] KECA 175 (KLR) explained that it is, “….a case in which on the material presented to the Court, a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party to call for an explanation or rebuttal from the latter.” 8.As stated, the Plaintiffs’ case is that on 1st May 2023, the 2nd -4th Plaintiffs agreed to sell their shares in Truckparts Trading to the Mehmet at a purchase price of USD 325,000, to be paid between 1st May 2024, and 1st May 2025. That Mehmet took control of Truckparts Trading’s management immediately but has not made a single payment of the purchase price and instead of paying, he has allegedly been siphoning funds, stock, and spare parts from Truckparts Trading to Aslan Truck Trading, directing customers to pay into his personal accounts or Aslan Truck Trading’s accounts and diverting business and imported stock to Aslan Truck Trading. 9.The Plaintiffs state that Mehmet has been charged with the offence of stealing by director at Makadara Law Courts in Nairobi and they argue that because Mehmet is a Turkish national, he is a flight risk who might withdraw funds and relocate to Turkey. As such, they contend that they have established a prima facie case, they will suffer irreparable injury if the orders sought are not granted, that the balance of convenience tilts in their favour and it will be in the best interests of justice that the application is allowed. 10.In their response, Mehmet claims the copy of the Agreement attached by the Plaintiffs is not the one he signed and that his signature only appears on a few pages, suggesting forgery. He also claims there was no initial capital contribution of USD 325,000, so the Agreement has no consideration and is void and that after signing, the parties allegedly agreed to set aside the Agreement and continue as partners, with Shire taking over financial management. 11.Mehmet states he has never had access to Truckparts Trading’s bank accounts because they require two signatories and that the Plaintiffs allegedly changed the email address for the accounts without telling him, locking him out completely. He claims that it is the Plaintiffs who mismanaged the company and spoiled its business reputation and that they were the ones who shifted stock from Truckparts Trading to Aslan Truck Trading’s workshop while Mehmet was away in Dubai. That the document the Plaintiffs call an "audit report" is actually a "Draft Review Report" based on selected transactions. Mehmet denies being a flight risk deponing that his deposited at Makadara Law Courts due to the related criminal case, so he cannot flee. 12.On its part, Sampa Automotive avers that it is a distinct limited company, a branch of a Turkish parent company, operating independently of Mehmet personally. That it has no connection to the bank accounts listed by the Plaintiffs and did not participate in or benefit from any alleged looting and that the Plaintiffs have failed to provide any evidence linking the company to the alleged fraudulent activities. Sampa Automotive urges the court to dismiss the case against it with costs and to refrain from freezing its accounts, which would harm its legitimate business operations. For these reasons, the Defendants pray that the court strikes out the suit against them for being incurably defective and discharge the interim orders in force. 13.The Plaintiffs and Mehmet agree that the Agreement for Sale of Shares is the anchoring document governing the relationship between them. Whereas Mehmet has claimed that his signature is a forgery, this claim is uncorroborated at this point and it remains that the Agreement has it on its face that he signed the same in the presence of an advocate. His claim that the parties agreed to set the Agreement aside is unsupported by any written document and his defense is largely a bare denial. 14.As per the Agreement, Mehmet was to pay or refund the purchase price of USD 325,000 by 1st May 2025 but there is no evidence that this has been done which is a prima facie breach of the Agreement. From the Plaintiffs’ supplementary affidavit, the court is able to find prima facie evidence of asset stripping by Mehmet as it appears he has been directing customers to pay for Truckparts Trading’s goods into M-Pesa lines not owned by the company, moving the its stock and machinery to a warehouse for which Aslan Truck Trading holds the business permit and invoicing sales of Truckparts Trading’s stock in the name of Aslan Truck Trading. From the aforementioned, I find that there is a clear prima facie case presented by the Plaintiffs and in line with the dicta in Nguruman(supra), I will move to determine the other factors for the grant of an injunction 15.On irreparable injury, while the Plaintiffs' claim is for a quantified amount of USD 325,000, Mehmet’s actions demonstrate a clear intention to render himself judgment-proof. If he dissipates all the assets such as cash and stock into his other companies or sends the money to Turkey, a judgment for damages will be a hollow victory. The very stock and assets that form the backbone of the Plaintiffs' claim for the purchase price are being sold off by him. One cannot get an injunction to preserve stock that has already been sold to an innocent third party and this type of wasting is one which damages cannot adequately remedy. It is also not in dispute that Mehmet is a Turkish national. Although his passport is deposited in court due to the ongoing criminal case, this does not prevent him from transferring funds electronically to Turkey or from obtaining new travel documents. I find that the risk of dissipation is real and substantial in this matter. 16.I also find that the balance of convenience tilts heavily in favour of the Plaintiffs and granting the injunction merely preserves the status quo and prevents further destruction of the asset base. Denying the injunction allows Mehmet to continue with the dissipation. Mehmet and Aslan Truck Trading claimed the freezing orders will harm their business. However, they are being asked to refrain from dealing with specific assets linked to the alleged fraud, not to cease all operations. Any inconvenience is far outweighed by the potential loss to be suffered by the Plaintiffs. 17.I also find that the prayer for the rendering of bank and MPESA accounts is apposite and germane to the determination of main suit as it will aid the court in determining the main suit. Conclusion and Disposition 18.In the foregoing, I now issue the following dispositive orders:a.Pending the commencement and conclusion of arbitration proceedings, the 1st and 2nd Defendants, their agents, servants, and employees are hereby restrained from:I.Withdrawing, transferring, or otherwise dealing with funds held in accounts 0XXX001 and 0XXXX01 at Diamond Trust Bank, and account 01000XXXXXXX28 at Stanbic BankII.Selling, disposing of, transferring, or otherwise alienating any assets, stock, or spare parts belonging to or traceable to the 1st Plaintiff.b.The 1st Defendant is ordered to furnish the Plaintiffs with full bank statements and M-Pesa statements for all accounts operated by the 1st Plaintiff and the 2nd Defendant from 1st May 2023 to date, within 14 days.c.Further proceedings in this suit in respect of the dispute arising from the Share Sale Agreement dated 1st May 2023 are hereby stayed pursuant to section 6 of the Arbitration Act. The parties are directed to appoint an arbitrator within 30 days in accordance with Clause 20 of the Share Sale Agreement.d.The Plaintiffs' deposit of Kshs.1,000,000.00/= in court shall remain as security for any damages the Defendants may suffer if the interim orders are later found to have been wrongfully granted.e.Costs of the application shall be in the cause. DATED SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 19TH DAY OF JUNE 2026............................................................................J.W.W. MONGAREJUDGEIn The Presence OfMs. Kariuki for the Plaintiff/Applicant.Ms. Musungu for the 1st and 2nd Defendants/Respondents.Mr. Andati holding brief for Ms. Nchogu for the 3rd Defendant/RespondentAmos- Court Assistant