Welal & 2 others v Hassan & another (Commercial Civil Suit E375 of 2022) [2026] KEHC 6419 (KLR) (Commercial and Tax) (12 May 2026) (Ruling)

Welal & 2 others v Hassan & another (Commercial Civil Suit E375 of 2022) [2026] KEHC 6419 (KLR) (Commercial and Tax) (12 May 2026) (Ruling) Neutral citation: [2026] KEHC 6419 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Civil Suit E375 of 2022 FG Mugambi, J May 12, 2026 Between Habiba Ali Welal 1st Plaintiff Batula Ali Welal 2nd Plaintiff Muna Ali Welal 3rd Plaintiff and Adan Yare Hassan 1st Defendant Fatuma Abdulkadir Ali 2nd Defendant Ruling 1.The dispute between the parties arises from the management and running of Emirates Mall constructed on LR. No 36/11/9 Eastleigh Nairobi (the suit premises). The parties are proprietors of the suit property and shareholders in Emirates Shopping Mall (K) Limited, a company incorporated for purposes of joint management of the premises. There are 2 pending applications for determination. The 1st application: 2.The application dated 18th February 2025 filed by the defendants seeks to review, vary, or set aside the orders of 28th July 2023. The defendants also seek a temporary injunction restraining plaintiffs from managing, collecting rent, or interfering with the suit premises, an order compelling them to account for Kshs. 105,840,000/- rental income collected since 19th December 2019 and compelling them to deposit the monthly rental income into a joint bank account. They also wish to have the plaintiffs compelled to provide audited statements of accounts, to produce financial records and receipts of rental income and to pay the defendants Kshs. 66,150,000/- being their 62.5% share of rental income. 3.The application is supported by the affidavit of Adan Yare Hassan sworn on 18th February 2025 and opposed through the Replying Affidavit sworn by Batula Ali Welai, the 2nd plaintiff, on 21st August 2025. The plaintiffs accuse the defendants of collecting all rent in cash from tenants and renewal fees known as goodwill payments without remitting the plaintiffs' rightful 37.5% share. They deny owing any rental arrears to the defendants or having collected Kshs. 105,840,000/-. They further deny that the National Bank account, A/C No. 01036063943600, is dormant. They maintain that the said account remains operational under the court's order dated 28th July 2023, which prohibits any withdrawal or dealing without the mandatory signature of Habiba Ali Welai, the 1st plaintiff. 4.They argue that no new or compelling evidence has been presented to warrant a review of the said Court orders. They confirm that they are amenable to a joint audit of all rental income from the premises, including amounts collected by the 1st defendant. They equally confirm that they are not opposed to the establishment of a joint bank account for depositing rental income, on condition that it is managed transparently and in accordance with the court's orders and the agreed ownership ratio and that all tenants should be directed to remit their rent into the said joint account whereupon the funds deposited therein should be distributed monthly in accordance with the ownership shares: 62.5% to the defendants and 37.5% to the plaintiffs. The 2nd application: 5.The application dated 25th July 2025 has been filed by the plaintiffs and seeks orders that the defendants be restrained by way of injunction from disconnecting electricity supply to any portion of the suit premises. Further, the plaintiffs seek an order directed to Kenya Power & Lighting Company to relocate the main electricity meter box to a common area within the building, accessible to all parties and not under the exclusive control of the defendants, with the costs of such relocation to be borne by the plaintiffs. 6.The plaintiffs also seek an order that all rental income derived from the shopping mall be deposited into a joint account held by all the registered proprietors. In addition, the plaintiffs pray that the sum of Kshs. 500,000/=, being rent payable for the premises occupied by the defendants, be deposited in Court for ease of division among the parties. Lastly, they seek that the Officer Commanding Police Station, Pangani, be directed to ensure enforcement and compliance with the orders of this Honourable Court. 7.The application is supported by the affidavit of Habiba Ali Welai sworn on 25th July 2025. It is opposed through the Replying Affidavit sworn by Adan Yare Hassan, the 1st defendant, on 29th July 2025. The defendants accuse the plaintiffs of not disclosing the fact that they have been collecting rent from the suit premises without accounting for the same. The deponent denies the allegations of disconnection of electricity from any part of the suit property and maintains that the said meter box is located at the basement which is accessible to everyone and confirms that all apartments have electricity. Analysis and Determination 8.I have equally considered the written submissions filed by the parties in support of their respective cases. Both applications arise from the same underlying dispute regarding the management of rental income and utilities at the suit premises. Each party accuses the other of mismanagement and non-disclosure. Both parties, however, acknowledge the need for transparency and a joint mechanism for collection and distribution of rental income. 9.In a Ruling delivered on 28th July 2023, this Court referred this matter for mediation. The parties have not reported to Court the outcome of that process. The record however shows that a Certificate of Non-Compliance was filed by the mediator on 21st November 2023 indicating that the parties are neither willing to participate in mediation nor meet for any negotiation whatsoever. Courts do not make orders in vain and in the circumstances, nothing that mediation has failed, this Court ought to ensure that the dispute is heard and determined expeditiously. 10.In that regard, the prayer for review of the orders issued on 28th July 2023 is overtaken by events. Regarding the rent deposits, I do note that both parties agree regarding depositing rental income into a joint interest earning account pending the determination of the matter. No evidence has been presented to this Court to prove that the defendants have interfered with the electricity supply to any portion of the suit premises. As such, any prayers relating to this ground are hereby dismissed. 11.Finally, the prayer for accounts is a substantive remedy that lies at the very heart of the dispute between the parties. Ordinarily, such an exercise cannot be undertaken at an interlocutory stage without risking a premature determination of contested issues, since it requires a full evidentiary hearing, scrutiny of records, and possibly expert input. However, I do note that both parties have expressed consensus on the need for a proper account and audit of the collections from the mall. In the circumstances, I am prepared to allow the prayer. Disposition 12.Accordingly, and for the reasons stated, I do hereby make the following orders:i.The prayer for review, variation, or setting aside of the orders of 28th July 2023 is declined.ii.Pending hearing and final determination of the suit, all rental income from the suit premises shall be deposited into a joint interest earning bank account in the names of the plaintiffs and the defendants to be opened within the next 30 days.iii.An independent audit shall be undertaken of all rental income collected from the suit premises from December 2019 to date by a mutually agreed auditor, to be agreed upon within 14 days from the date of these orders. In default of such an agreement, the Chairperson of the Institute of Certified Public Accountants of Kenya (ICPAK) shall appoint an auditor for such purpose, whose fees shall be met by the company.iv.The other prayers sought are hereby dismissed.v.Each party shall bear their own costs of the applications. DATED, SIGNED AND DELIVERED IN NAIROBITHIS 12TH DAY OF MAY 2026.F. MUGAMBIJUDGEDelivered in presence of:Omondi for 2nd, 3rd plaintiffsCourt Assistant: Lillian & Gloria