https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1541

Westmont Holdings Sdn.Bhd v Central Bank of Kenya (Civil Appeal 37 of 2017) [2026] KECA 1541 (KLR) (31 July 2026) (Judgment) Neutral citation: [2026] KECA 1541 (KLR) Republic of Kenya In the Court of Appeal at Nairobi Civil Appeal 37 of 2017 JM Ngugi, MN Nduma & Katwa Kigen, JJA July 31, 2026 Between Westmont Holdings Sdn.Bhd Appellant and Central Bank of Kenya Respondent (Being an appeal from the Judgment and Decree of the High Court of Kenya at Nairobi (Commercial & Admiralty Division, Milimani) (Richard Mwongo, J.) delivered on 16th December, 2016 in H.C. Civil Suit No. 642 of 1998.) Judgment 1.This appeal, being the first appeal against the judgment of the High Court of Kenya (Commercial Division, Milimani) delivered by Mwongo, J. on 16th December, 2016 in Civil Suit No. 642 of 1998, emanates from a dispute with a protracted and labyrinthine procedural historical maze, and catacomb. The litigation herein has traversed multiple judicial hierarchies, including the High Court, the Court of Appeal, and the Supreme Court, punctuated by numerous interlocutory applications, rulings, and reinstatements, before being remitted for substantive adjudication at the High Court, culminating in the present appeal. The parties, nevertheless, remained sharply divided on the legal effect of the earlier proceedings and decisions. 2.The suit started about 28 years ago in October 1998, when Kamlesh Mansukhlal Pattni (Pattni), together with Westmont Holdings SDN. BHD. (Westmont) (“the appellants"), instituted proceedings in the High Court against the Central Bank of Kenya (CBK) seeking restitution of Kshs.185,500,000 as a refund of monies paid to the Central Bank of Kenya (“the respondent"), which, according to the claim, was a deposit towards the intended purchase of the Grand Regency Hotel in Nairobi by Lynwood Development Limited (“Lynwood”), a Malaysian investor, pursuant to an advertisement for purchase placed in a local newspaper by CBK, the respondent. 3.The respondent’s case, on the other hand, was that the sum of Kshs.185,500,000 was not paid as a refundable deposit towards the purchase of the Grand Regency Hotel. Rather, it maintained that the payment was made by Kamlesh Pattni pursuant to the existing redemption arrangements between CBK, as chargee, and Pattni together with Uhuru Highway Development Limited and was, therefore, lawfully appropriated towards the indebtedness secured by the charge. CBK denied that it had any contractual relationship with either Westmont or Lynwood, denied that it received the money as stakeholder, and maintained that no obligation to refund the amount ever arose. 4.It is from this introductory summary of the material facts that the matrix and history of this case unravelled, traversing issues of, inter alia, debt payment, chargee’s rights, contracts, agency, restitution, abatement, and unjust enrichment. 5.From the record, it is apparent that the said plaint was subsequently amended on 18th October 1999 and later re- amended on 17th November 2014 to incorporate material developments, including the pleaded agency nexus between Westmont Holdings SDN. BHD. and Lynwood Development Ltd. It is equally pertinent to note that during the pendency of the proceedings, Kamlesh Mansukhlal Pattni withdrew his claim, thereby leaving Westmont Holdings SDN. BHD. to prosecute the matter alone. At one stage, the matter was dismissed under Order XVI Rule 6 of the old Civil Procedure Rules for want of prosecution, after no party moved the court between December 2002 and April 2008. An application for reinstatement was dismissed by the High Court, but later the Court of Appeal in Civil Appeal No. 118 of 2013 reinstated the suit and directed that it be heard expeditiously “based on the plaint dated 26th October 1998, as amended on 18th October 1999, with further amendments if necessary". Following reinstatement, several applications were filed, including an application for substitution of Westmont by Lynwood dated 21st March 2014; a Notice of Preliminary Objection dated 8th May 2015 by CBK contending that Westmont had been wound up on 21st May 2002 and that the suit had abated; and various re-amendments of pleadings.On 3rd October 2015, Justice Mwongo ruled that the proper parties in the claim and counterclaim were those shown in the title of the suit and that all pending applications had abated, granting parties liberty to complete filing their pleadings. 6.The hearing on both the preliminary objection and the merits were conducted between 4th June 2015 and 29th June 2016, with parties filing written submissions and highlighting them in court on 20th September 2016. On 16th December 2016, Mwongo. J delivered judgment, dismissing the plaintiffs’ claim and CBK’s counterclaim, holding that Westmont had been wound up and lacked capacity and that Lynwood was not a proper party. (We shall revert to the said decision later in this judgment). Aggrieved, Westmont lodged Civil Appeal No. 37 of 2017 in the Court of Appeal. Before the appeal could be heard, CBK filed a motion dated 13th October 2017 seeking security for costs. On 8th December 2017, this Court (Visram, Karanja & Koome JJ.A.) ordered Westmont or its attorney, Jasmine See, to deposit Kshs.20,000,000 within 45 days, failing which the appeal would stand struck out. 7.Westmont then sought certification to appeal to the Supreme Court, raising constitutional questions on whether security for costs impeded access to justice. On 8th October 2021, the Supreme Court (Ibrahim, Mwilu, Ndungu, Lenaola & Ouko SCJJ) certified the matter as involving issues of general public importance, allowed the application, and directed that the appeal be heard on a priority basis. 8.It is against this backdrop, after reinstatement by this Court, certification by the Supreme Court, and directions that the matter be heard and determined on its merits, that the present first appeal has been lodged before this Court, representing the culmination of over two decades of litigation, multiple applications, and procedural rulings. Ultimately, notwithstanding the lengthy procedural history, the appeal turns on whether the amount remitted was a deposit for the purchase of the Grand Regency Hotel, hence refundable to Lyndon and Westmont, or was a debt payment to CBK as a chargee, and also on who remitted the amount! 9.As earlier noted and gleaned from the record before us, the litigation traces its origin to a plaint first filed on 26th October 1998, subsequently amended on 18th October 1999, and later re-amended on 17th November 2014. The plaintiffs were Kamlesh Mansukhlal Pattni and Westmont Holdings SDN BHD, a Malaysian company, while the defendant was the Central Bank of Kenya (CBK). 10.The appellants’ plaint stated that the CBK, having exercised its statutory powers as chargee of Uhuru Highway, Development Ltd placed the Grand Regency Hotel under receivership and subsequently advertised it for sale in December 1996. [On the face of the filings, parties would seem to have agreed on the advertisement to sell]. From the plaint as filed, the appellants gave a detailed account of the transaction and the communications exchanged with CBK. They pleaded that after CBK advertised the Grand Regency Hotel for sale in December 1996, an agreement was reached on 26th February 1998 for the sale of the hotel to Westmont Holdings, introduced by Kamlesh Pattni and acting as agent for Lynwood Development Ltd. [It is useful to keep in mind that this issue of agency for Lynwood is contested.] 11.Pursuant to arrangements between the parties, the appellants alleged that they paid a deposit of Kshs.185,500,000, being 10% of the purchase price, through a banker’s cheque dated 12th May 1997, drawn on Citibank Nairobi. The appellants contend that CBK acknowledged receipt of the cheque and confirmed in correspondence that the deposit would be held in a stakeholder capacity pending completion of the sale. For clarity, although Westmont executed parts of the transaction, its consistent case became that it acted throughout as the disclosed agent of Lynwood Development Ltd., the alleged beneficial purchaser. 12.The plaint further narrated that CBK gave assurances that the sale would proceed but later failed to permit due diligence and refused to provide undertakings required under the Grand Regency Hotel Agreement, including warranties on title and authority to sell. The appellants pleaded that repeated requests for completion were met with evasive responses and that correspondence exchanged between the parties reflected CBK’s reluctance to facilitate the transaction. 13.They alleged that CBK misapplied the deposit by diverting the funds to reduce liabilities of Exchange Bank Ltd (in liquidation), a company unrelated to the sale, and by applying part of the deposit to pay advocates’ fees. The pleaded particulars of fraud and conversion included that CBK knowingly misapplied the deposit contrary to the terms of the agreement, appropriated the funds for purposes outside the contract, concealed the true application of the monies from the appellants, and unjustly enriched itself at their expense. 14.It was pleaded that the consideration wholly failed, as the hotel was never transferred to the appellants or their principal, and CBK remained indebted in the sum of Kshs.185,500,000 due as a refund. The pleadings also alleged breach of trust and fiduciary duty, contending that CBK, as a statutory body and stakeholder, was bound to act in good faith and in accordance with the agreement but instead diverted the funds to unrelated liabilities. The appellants emphasized that the monies were remitted by Westmont Holdings as an agent and on behalf of Lynwood Development Ltd, a Malaysian investor, and that CBK’s refusal to refund the deposit despite the collapse of the sale constituted fraud, conversion, and breach of fiduciary duty. On this basis, the plaint sought refund of the deposit, interest thereon, costs of the suit, and such further relief as the court deemed fit, grounding the cause of action in breach of contract, fraud, conversion, unjust enrichment, breach of trust, and failure of consideration. The plaint sought, among other reliefs, a refund of Kshs.185,500,000, together with interest on the said sum, costs of the suit, and such further reliefs as the court would deem just and appropriate in the circumstances. 15.The claim was opposed by the respondent through its re- amended defense and counterclaim filed on 16th February 2015. The defense shows that it was not confined to a mere denial of liability but was structured to position CBK as the party entitled to recover debt monies rather than refund any money. In its defense, CBK asserted that Westmont Holdings SDN BHD had been wound up on 21st May 2002 and therefore lacked legal capacity to sue or maintain proceedings. It further contended that Lynwood Development Ltd was not a proper party, describing it as an undisclosed principal, and maintained that the deposit of Kshs.185,500,000 had been lawfully applied. That Lynwood was unknown to CBK at all material times and that nothing existed to suggest that the Ksh185,500,000 came from Lynwood whatsoever. That the amount was remitted through the advocate who CBK understood to be representing the debtor and was therefore, on its face, made on behalf of the debtor to settle part of its/their debt. That in whatsoever event the advocate did not come out in any way as representing either Westmont as an agent or Lynwood as a principal and purchaser. The amended defense went further to contend that the appellants had misrepresented their capacity and interest in the transaction and that the deposit was not held in trust but was applied to offset liabilities lawfully due to CBK. It was pleaded that the appellants were complicit in the Goldenberg transactions and that the monies paid were part of a broader scheme involving Exchange Bank Ltd (in liquidation), Pattni, and Uhuru Highway Development Ltd. CBK then sought declarations that the appellants’ claim was untenable, that Westmont lacked standing, and that Lynwood was wound up, was a nonentity, and, in whatever case, was improperly joined. 16.In its counterclaim, CBK prayed for recovery of sums allegedly due from Pattni, Westmont, and UHDL, asserting that the deposit had been applied to reduce obligations linked to Exchange Bank Ltd and other Goldenberg-related liabilities. It sought orders declaring that the appellants were indebted to CBK, that the deposit was properly appropriated, and that CBK was entitled to recover further sums arising from the Goldenberg transactions. The counterclaim also alleged that Pattni and his associates had orchestrated fraudulent dealings through Westmont and Lynwood and that CBK, as regulator and creditor, was entitled to set off the deposit against those liabilities. 17.After the court was satisfied that the parties had complied with directions on pleadings and pre-trial processes, the matter proceeded to full hearing by way of oral testimony and documentary evidence, supplemented with written submissions later highlighted in court. 18.On the appellants’ side, Kamlesh Mansukhlal Pattni testified as the 1st plaintiff. In his evidence-in-chief, he narrated the background to the Grand Regency Hotel transaction, explaining that he introduced Westmont Holdings SDN BHD as purchaser on behalf of Lynwood Development Ltd. He stated that pursuant to the agreement, a deposit of Kshs.185,500,000 was paid by banker’s cheque dated 12th May 1997, drawn on Citibank Nairobi, and delivered to CBK. He produced the cheque itself together with CBK’s written acknowledgement of receipt. He further relied on correspondence exchanged with CBK, including letters dated March 1997 and April 1997, in which CBK was requested to provide undertakings under the Grand Regency Hotel Agreement and to permit due diligence. He argued that CBK had agreed to hold the deposit as a stakeholder but later diverted it to unrelated liabilities, including reducing debts of Exchange Bank Ltd. (in liquidation) and paying advocates’ fees. He testified that his involvement in the Goldenberg transactions was distinct from the Grand Regency Hotel sale and that the deposit of Kshs.185,500,000 was genuinely intended for the purchase of the hotel. He maintained that the banker's cheque dated 12th May 1997 drawn on Citibank Nairobi was delivered to CBK specifically for that purpose and that CBK acknowledged receipt in writing. He explained that the correspondence he relied upon, including letters exchanged in March and April 1997 between himself, Westmont, Lynwood, and CBK, demonstrated CBK’s obligation to provide undertakings under the Grand Regency Hotel Agreement and to permit due diligence. He rejected the suggestion that CBK never expressly undertook to hold the funds in trust, insisting that the acknowledgement of receipt and the stakeholder arrangement were clear. On the issue of Westmont’s winding up in 2002, he stated that Lynwood Development Ltd. had always been the principal and that Westmont acted only as agent, so Lynwood was entitled to step in and pursue the claim. 19.He emphasised that the deposit was paid in good faith and that CBK had formally acknowledged receipt. That the appellants’ claim was anchored in failure of consideration, since the sale collapsed and the hotel was never transferred. He reiterated that CBK’s diversion of the funds to reduce liabilities of Exchange Bank Ltd (in liquidation) and to pay advocates’ fees amounted to fraud and conversion. He pointed again to the banker's cheque, CBK’s acknowledgment, the agency letters of 12th and 14th February 1997, and Lynwood’s bank statement showing remittance of US $3,700,000 from its account as evidence that the monies were sourced from Lynwood and paid towards the hotel purchase, thereby underscoring CBK’s breach of trust and fiduciary duty.One of the other main witness appellants’ witnesses was Jasmine See, who appeared as attorney for both Westmont Holdings SDN BHD and Lynwood Development Ltd. In her testimony she narrated that Lynwood was the true principal in the transaction and Westmont merely its agent, pointing to the letter dated 12th February 1997 from Lynwood formally appointing Westmont as agent and Westmont’s acceptance letter of 14th February 1997 confirming that role. She produced Lynwood’s bank statement showing a debit of US$3,700,000 remitted from Lynwood’s account, which she explained was the source of the banker's cheque of 12th May 1997 drawn on Citibank Nairobi for Kshs.185,500,000 delivered to CBK. She confirmed that these funds were intended for the purchase of the Grand Regency Hotel and were paid in good faith pursuant to the agreement. She admitted that Westmont had been wound up in 2002 and candidly conceded that instructions she had given lawyers on behalf of Westmont after that date were legally void, since a company in liquidation could not act through an attorney. She acknowledged that she had continued to act under a power of attorney without taking into account the fact that Westmont was already wound up. She, however, maintained that Lynwood, as the disclosed principal, had stepped in to pursue the claim. 20.From the respondent’s side, the Central Bank of Kenya (CBK) presented its case through the testimony of, inter alia, its two officials. The principal witness was Mr. Kennedy Abuga, then serving as director in the governor's office at CBK. He testified that although he was not personally involved at the material time, he had reviewed CBK’s records and correspondence. He explained that according to CBK, the deposit of Kshs.185,500,000 was received pursuant to agreements between CBK and Mr. Pattni for redemption of the charge over the Grand Regency Hotel and not as stakeholder funds for Westmont or Lynwood. That the remittance of the funds did not set out anywhere that they were for the purchase of the hotel. In any case, CBK did not then, or at all, have an agreement with any entity to purchase the hotel. He produced CBK’s internal records, ledger entries, and correspondence from Murgor & Murgor Advocates dated 26th February 1997 and 7th May 1997, which outlined the settlement terms and confirmed that the deposit was credited against Exchange Bank Ltd’s liabilities. Mr. Abuga was firm that CBK never dealt with Westmont or Lynwood directly. That the only agreement was with Pattni and Uhuru Highway Development Ltd. (UHDL). He emphasized that CBK’s role was as creditor and regulator, not trustee, and that the deposit was lawfully applied in discharge of debts owed to CBK. When pressed on whether CBK had ever expressly undertaken to hold the deposit in trust or whether it had disclosed Westmont’s winding-up to the Court of Appeal, he responded that CBK had never assumed stakeholder obligations and that the fact of winding up was admitted by Westmont’s own attorney, Jasmine See. He denied any breach of contract, concealment, fraud, and/or unjust enrichment. 21.He insisted that the appellants’ case should be understood from the perspective of actors within the Goldenberg scheme not innocent third parties, purchasers, and actors 22.The other CBK/defense witness was Mr. John Githongo, then a senior officer in CBK’s Finance Department. He testified that CBK’s internal accounting records showed the application of the deposit to Exchange Bank Ltd’s account in liquidation. He produced CBK’s ledger entries, payment vouchers, and correspondence with CBK’s external advocates, confirming that part of the deposit was used to settle professional fees while the remainder was credited against Exchange Bank’s liabilities. He stated that Westmont Holdings had been wound up in 2002 and therefore lacked capacity to maintain proceedings, while Lynwood Development Ltd was never a proper party to the suit. 23.In its bid to prove the counterclaim, the Central Bank of Kenya (CBK) anchored its case on agreements and correspondence exchanged in 1997, presenting evidence through its officials and documentary records. CBK maintained that the deposit of Kshs.185,500,000 was not stakeholder money but part of a broader settlement arrangement with Mr. Pattni and Uhuru Highway Development Ltd (UHDL) and was lawfully applied to reduce liabilities arising from Exchange Bank Ltd (in liquidation). The respondent relied on the letter dated 26th February 1997 from its advocates, Murgor & Murgor, addressed to Pattni, which set out the terms of settlement for redemption of the charge over the Grand Regency Hotel. That letter outlined that UHDL would pay CBK the value of the hotel as determined by a joint valuation and that such payments would be effected under CBK’s supervision. CBK further relied on Pattni’s reply dated 14th March 1997, in which he confirmed acceptance of the settlement terms and acknowledged CBK’s role as creditor and regulator. In addition, CBK produced the agreement of 7th May 1997, which reinforced the settlement framework and expressly provided that the deposit would be applied against Exchange Bank Ltd’s liabilities. He testified that internal accounting records, ledger entries, and payment vouchers confirmed the manner in which the deposit was appropriated: part of the funds were used to settle professional fees, while the remainder was credited to Exchange Bank Ltd.'s account in liquidation. They insisted that CBK never undertook to hold the deposit in trust or as a stakeholder but received the monies strictly in its capacity as a creditor. They emphasised that Westmont Holdings had been wound up in 2002 and therefore lacked capacity to maintain proceedings, while Lynwood Development Ltd was never a proper party to the suit. 24.After considering the pleadings, the oral testimony, the documentary evidence, and the written submissions highlighted in court, Justice Mwongo distilled the dispute into two main and broad principal issues for determination. First, what was the effect of the Court of Appeal’s order reinstating the suit, and whether that order permitted substitution of parties or only amendment of pleadings. Although the learned Judge framed the dispute around two principal issues, his determination necessarily addressed a number of subsidiary questions bearing on those issues. 25.In his judgment, the Judge began by addressing the effect of the Court of Appeal’s reinstatement order. He held that the order was expressly in favour of Westmont Holdings SDN BHD, the original second plaintiff, and directed that the matter proceed on the basis of the plaint dated 26th October 1998 as amended on 18th October 1999. He found that the order did not itself authorise substitution of parties and that any further amendments of the magnitude of introducing a new party required leave of the court. Consequently, the purported introduction of Lynwood Development Ltd as plaintiff without leave was irregular, procedurally defective, and fatal. On the second issue, the Judge examined the affidavit and testimony of Jasmine See, attorney for both Westmont and Lynwood, who candidly admitted that Westmont had been wound up in May 2002. He noted that this fact was not disclosed to the Court of Appeal during reinstatement proceedings, amounting to material non-disclosure. He noted that substitution of a human person must be done within one year under the Civil Procedure Act and Rules. The learned Judge then extrapolated the logic of the law to hold that a similar one-year limit applies to non- human entities that have been wound up, failing which the suit abates. Since no substitution was made within the one year of winding up and since the company had ceased to exist, he concluded that the suit was incompetent. 26.In explaining his determination, Justice Mwongo stressed that proper parties must be before the court for jurisdiction to attach. He found that Westmont, having been wound up, lacked capacity to sue, and Lynwood, introduced late without leave, was a stranger to the proceedings. He rejected the argument that agency alone could sustain the claim, noting that once the agent was wound up, the principal could not simply step in without following due process. The learned Judge held that jurisdiction could not properly be exercised where there are defective parties and that the failure to disclose by Westmont about its dissolution amounted to material concealment. 27.On the substantive claim, the Judge considered whether the deposit of Kshs.185,500,000 was refundable. He held that the appellants had not proved entitlement to a refund, as no trust or stakeholder arrangement had been established. The learned Judge found no contractual relationship or collateral agreement between CBK, on the one hand, and Westmont or Lynwood, on the other, upon which liability to refund the deposit could be founded or that CBK received the funds as stakeholder pending completion of the transaction. The correspondence and agreements relied upon by CBK demonstrated that the deposit was tied to settlement of liabilities of Exchange Bank Ltd (in liquidation), not held in trust for Westmont or Lynwood. He therefore dismissed the claim for refund, finding that the appellants had failed to establish a legally enforceable right to restitution. 28.Turning to the counterclaim, Justice Mwongo found that CBK had equally failed to prove entitlement to recover further sums.The bank had not demonstrated any contractual or statutory basis for recovery beyond the deposit already appropriated. He dismissed the counterclaim for want of proof, holding that CBK’s assertions of broader indebtedness linked to Goldenberg transactions were unsupported by evidence. In any case, the two (2) plaintiffs in court were on its face not obviously part of Goldenberg, and no evidence was adduced on the point of this association and debt. 29.In the end, Justice Mwongo concluded that both the claim and the counterclaim failed. He struck out the suit, emphasizing that litigation cannot proceed without proper parties and that neither side had discharged the burden of proof. His judgment brought to a close a matter that had lingered for over two decades, resting on findings of procedural irregularity, lack of capacity, material non-disclosure, and failure to establish entitlement to either a refund or recovery. 30.Being aggrieved by the judgment of the High Court delivered on 16th December 2016, the appellant lodged a Notice of Appeal dated 17th December 2016, signifying its intention to challenge the decision. Thence, vide a Memorandum of Appeal dated 9th February 2017, the appellant set out twelve grounds upon which it faulted the judgment of Justice Mwongo. In the memorandum, the appellant contended that the decision of the superior court went against the weight of the evidence. It argued that the learned Judge erred in law and fact by misinterpreting and second-guessing the orders of the Court of Appeal, which had allowed amendments to pleadings, and that substitution of parties falls under the generic term "amendments". The Judge was faulted for failing to appreciate the spirit of Order 1, Rule 10 of the Civil Procedure Rules and for entertaining a preliminary objection within the trial, thereby convoluting issues of law and evidence. The appellant further complained that the Judge failed to hear and determine its application for substitution, instead holding that it had abated. The appellant also asserted that the Judge erred in failing to appreciate that CBK had fully participated in and facilitated the arrangements under which the Grand Regency Hotel was to be sold and that with CBK’s knowledge, the 10% deposit of Kshs.185,500,000 was paid by the appellant. It was argued that the Judge wrongly held that the sum was not refundable, despite clear evidence that the sale collapsed due to CBK’s refusal to allow due diligence. The appellant maintained that the Judge failed to recognise the valid agency relationship between Westmont Holdings SDN. BHD. and Lynwood Development Ltd and erred in dismissing the suit despite overwhelming evidence in support of the claim. On these twelve grounds, the appellant prayed that the appeal be allowed, the judgment of the High Court be set aside, and it be substituted with an order directing CBK to refund the sum of Kshs.185,500,000 with costs and interest, together with costs of the appeal and those incurred in the superior court. 31.The matter was heard by way of both written and oral submissions. When it came up for a virtual hearing, learned counsel Mr. Muite, SC, appeared for the appellant alongside learned counsel Mr. Marete, while Mr. Murgor, SC, appeared for the respondent. Both parties confirmed that they had filed written submissions and elected to rely on the same in highlighting their respective positions on the appeal. 32.The appellant, while relying on its written submissions dated 30th June 2017, submitted that the appeal arises from Civil Appeal No. 118 of 2013, which had been concluded in its favour, paving the way for the hearing of the suit on its merits. The appellant framed its submissions under several heads for consideration by this Court, namely background, admissions, points of law, issues of fact, and conclusion. In its background, the appellant argued that Lynwood Development Limited, a Malaysian investor, sought to purchase the Grand Regency Hotel (GRH) and paid a deposit of Kshs.185,000,000 to the Central Bank of Kenya (CBK) through its disclosed agent, Westmont Holdings SDN. BHD. The claim before the High Court and now on appeal is for a refund of this deposit, together with interest and exchange rate losses. The appellant emphasised that the deposit was paid, the purchaser appellant had the balance available, and that the balance was payable upon the conduct of due diligence. It was also contented that Westmont was a disclosed agent of Lynwood, and the transaction concerned the Grand Regency Hotel (GRH), which was charged to CBK. 33.Senior counsel submitted that the trial court erred in dismissing the suit on the basis of a preliminary objection raised by CBK regarding the limitation of time and Lynwood’s locus standi. The objection was argued on 4th June 2015, but the Judge deferred ruling until judgment, when he upheld it. The appellant argued that this was contrary to the principles in Mukhisa Biscuit Manufacturing Co. Ltd. vs. West End Distributors Ltd. [1969] E.A. 696, which requires preliminary objections to be determined at the interlocutory stage. Reliance was also placed on Air Alfaraj Ltd vs. Raytheon Aircraft Credit Corporation [2000] KLR, where the court held that jurisdictional objections must be determined first. The appellant contended that the Judge's predisposition from that stage denied it a fair trial, contrary to constitutional guarantees. On amendment of pleadings and substitution of parties, the appellant submitted that the Court of Appeal in Civil Appeal No. 118 of 2013 had reinstated the suit and expressly allowed amendments “as necessary". Pursuant to this leave, Westmont was substituted with Lynwood as principal. Counsel argued that the trial court erred in rejecting this substitution, thereby overruling this Court. The appellant relied on Section 100 of the Civil Procedure Act and Order 8 Rule 3 of the Civil Procedure Rules, which empower courts to allow amendments at any stage to determine the real issues in controversy. Authorities cited included Elijah Kipngeno Arap Bii vs. Kenya Commercial Bank Ltd [2013] eKLR, Daniel Migwi Njai vs. High View Farm Ltd (CA No. 139 of 1989), and A.S. Sheikh Transporters Ltd vs. Barclays Bank of Kenya [2010] eKLR, all affirming the broad discretion to allow amendments. The appellant argued that substitution was proper under Order 1 Rule 10 and that Lynwood, as principal, was competent to sue. On agency, the appellant submitted that Westmont was at all times an agent of Lynwood, as evidenced by correspondence including Lynwood’s letter of 12th February 1997. According to the Appellant, the trial court itself acknowledged the existence of an agency relationship. The appellant argued that Lynwood, as principal, was entitled to take over proceedings from its agent. It was erroneous for the court to require a deed to establish agency, contrary to the law of ratification and business practice. Order 9 of the Civil Procedure Rules permits agents to institute proceedings on behalf of principals. 34.On issues of fact, the appellant submitted that CBK played a central role in the transaction, acknowledged receipt of the deposit, and demanded payment of the balance. The deposit was paid to facilitate access and due diligence, which CBK later denied. The appellant argued that the deposit was refundable, and CBK’s retention of it amounted to unjust enrichment. Reliance was placed on Fibrosa Spolka Akcyjna vs. Fairbarn Lawson Combe Barbour Ltd [1942] UKHL 4, recognising restitution as a remedy for unjust enrichment, and Samuel Kamau Macharia vs. Kenya Commercial Bank Ltd [2012] eKLR, where restitution was ordered for sums unjustly extracted. The appellant also cited Patricia Bini vs. Melina Investments Ltd [2015] eKLR, affirming that rescission of contracts entails restitution even absent an express refund clause. The appellant further submitted that GRH and UHDL were not distinct entities, as UHDL traded as GRH. CBK was privy to the transaction, and its advocates engaged in correspondence confirming receipt of the deposit. The collapse of the sale was attributed to CBK’s refusal to allow due diligence, not to any default by the appellant. 35.In conclusion, Senior Counsel argued that the trial court erred in law and fact by dismissing the suit on technical grounds, ignoring the Court of Appeal’s directions, and failing to appreciate the agency relationship and CBK’s role in the transaction. The deposit of Kshs.185,000,000 was refundable, and CBK’s retention of it amounted to unjust enrichment. The appellant, therefore, prayed that the appeal be allowed, judgment entered in its favour, and CBK ordered to refund the deposit together with interest and exchange rate losses, as pleaded. 36.Mr. Murgor, appearing for the respondent, relied on the respondent's written submissions dated 19th October, 2017. He urged the Court to uphold the High Court’s dismissal of the suit, arguing that the claim was fraudulent, incompetent, and pursued by a dissolved entity. He pointed out that the appellant, Westmont Holdings SDN BHD, had been wound up on 31st May 2002, a fact, he argued, which had admitted and disclosed by Jasmine See in her supporting affidavit sworn on 21st March 2014. Despite this, a purported appeal was filed on twelve grounds, all of which were premised on a non-existent legal entity. The respondent further argued that the matter is an offshoot of the infamous Goldenberg Scandal of the early 1990s but with additional actors whose objective remained the same: fraudulently syphoning billions of shillings from the Central Bank of Kenya. He identified Jasmine See, whom he said was a Malaysian national holding multiple American passports, as the principal actor orchestrating the claim through Westmont and Lynwood Development Limited, despite glaring contradictions in her identity, residence, and legal capacity. 37.The respondent identified the following issues for determination: whether there is in existence an appellant before the Court of Appeal today, whether there was in existence an appellant before the Court of Appeal in Civil Appeal No. 118 of 2013 that could prosecute and benefit from the orders granted in the judgment dated 21st February 2014, whether the said judgment of the Court of Appeal dated 21st February 2014 in Civil Appeal No. 118 of 2013 is a nullity on account of the nonexistence, winding up, or liquidation of Westmont, and whether the High Court (Mwongo, J.) was justified in fact and in law to hold that there existed no agency-principal relationship between Westmont and Lynwood capable of being enforced. 38.On the first issue, CBK argued that there was no valid appellant before the Court in Civil Appeal No. 118 of 2013, nor is there one in the present appeal. Their position rests on the fact that Westmont Holdings SDN BHD, the original plaintiff, was wound up on 31st May 2002. No application was ever made within the statutory one-year period to substitute Westmont with Lynwood or any other party, as required under Order 24 of the Civil Procedure Rules. Consequently, the CBK submitted, the suit abated and became legally non-existent. CBK emphasized that a wound-up company cannot instruct advocates or pursue litigation, and any attempt to do so amounts to acting under false pretenses. 39.The High Court had earlier ruled on 3rd October 2014 that the parties to the matter remained CBK, Kamlesh Pattni, Westmont (already wound up), and Uhuru Highway Development Limited. Lynwood was never recognised as a party, making it a stranger to the proceedings. CBK further submitted that the Court of Appeal’s judgment of 21st February 2014 could not have reinstated a suit that had already abated, since, according to it, pleadings cannot be amended to substitute a liquidated party. The subsequent application filed in March 2014 under Order 1 Rule 10 was misplaced, as that provision deals with suits filed in the name of the wrong plaintiff, not with substitution after winding up. 40.CBK submitted that the testimonies from witnesses, including Jasmine See and advocate Kapila, revealed contradictions and concealment of Westmont’s liquidation. J. See admitted under cross-examination that she withheld the fact of Westmont’s winding up from the Court of Appeal, thereby prosecuting appeals on behalf of a non-existent entity. Kapila, too, gave inconsistent evidence, at times claiming to act for Westmont, then Lynwood, while acknowledging he had never received instructions from Lynwood. Another witness, Onono from IRAC, conceded that if Westmont had been wound up in 2002, he had no client at all. It was Counsel's submission that since Westmont ceased to exist in 2002 and no substitution was ever effected, there was no competent appellant before the Court of Appeal in Civil Appeal No. 118 of 2013. The suit in the High Court had abated and was void ab initio, incapable of being revived. Accordingly, CBK urged that the appeal be struck out with costs, as it was incurably defective and pursued by parties without legal capacity. 41.On the second issue, as to whether the judgment of the Court of Appeal dated 21st February 2014 in Civil Appeal No. 118 of 2013 is a nullity on account of the nonexistence, winding up, or liquidation of Westmont, the position advanced by CBK is clear. Having established that there was no competent appellant before the Court of Appeal capable of prosecuting the appeal or benefiting from its orders, CBK submitted that the judgment itself must be regarded as null and void. The principle in Macfoy vs. United Africa Co. Ltd [1961] All E.R. 1169, as articulated by Lord Denning, is instructive: if an act is void, it is in law a nullity, incurably bad, and automatically void without the necessity of a formal order, though courts may declare it so for convenience. That this Court, as then constituted, misinformed by deliberate non-disclosure, directed reinstatement of the suit on the basis of pleadings dated 26th October 1998 and amended in 1999. However, this reinstatement was fundamentally flawed, as it was procured through concealment of the critical fact that Westmont had been wound up in 2002. Orders obtained in such circumstances are irregular and must be set aside ex debito justitiae. Authorities such as Craig vs. Kansee [1943] 1 All ER 108, and Kenyan precedents including Provincial Insurance Co. of East Africa vs. Mordecai Nandwa (CA No. 179 of 1995, Kisumu) and Omega Enterprises (K) Ltd vs. KTDA (CA No. 59 of 1993, Nairobi) reinforce the principle that parties must make full disclosure of material facts, even adverse ones, before obtaining relief. Failure to do so renders any orders irregular and liable to be struck out. 42.CBK further submitted that the obligation of full disclosure was egregiously breached. Witness testimony confirmed that Westmont had been wound up for over a decade by the time of the appeal, yet this fact was withheld from both the High Court and the Court of Appeal. Jasmine See admitted under cross- examination that she concealed the liquidation, thereby misleading the courts into granting orders to a non-existent entity. Such conduct amounts to abuse of process and fraud upon the court. As emphasized in Rex vs. Kensington Income Commissioners, ex parte Princess Edmond de Polignac [1917] 1 KB 486, a party making an application must disclose all material facts; failure to do so deprives them of any advantage obtained. Accordingly, the cause of action had abated long before the Court of Appeal’s reinstatement order of 21st February 2014. Neither the High Court nor this Court had jurisdiction to entertain the matter after 31st May 2003, when the suit abated by operation of law. Counsel for the appellant, by concealing material facts, acted improperly and deprived the court of the ability to exercise its jurisdiction fairly. The proceedings, therefore, are null ab initio. The appeal and the orders flowing from it must be struck out, as they were obtained fraudulently and without legal foundation. 43.On the third issue, SC Murgor contended that the proceedings and judgment of the Court of Appeal dated 21st February 2014 in Civil Appeal No. 118 of 2013 could not stand in light of the winding up and liquidation. The reasoning is anchored on the fact that Westmont ceased to exist as a legal entity on 31st May 2002, and no substitution was effected within the one-year period prescribed under Order 24 of the Civil Procedure Rules. By operation of law, the suit abated on 31st May 2003, rendering it legally non-existent. Any subsequent proceedings, including the appeal, were therefore pursued without jurisdiction and amounted to a nullity. SC went ahead to submit that this Court’s judgment reinstating the suit was obtained through material non-disclosure and concealment of Westmont’s liquidation. Orders procured in such circumstances are irregular and must be set aside ex debito justitiae. The jurisprudence in Craig vs. Kansee [1943] 1 All ER 108, as well as Kenyan authorities such as Provincial Insurance Co. of East Africa v Mordecai Nandwa (CA No. 179 of 1995, Kisumu) and Omega Enterprises (K) Ltd vs. KTDA (CA No. 59 of 1993, Nairobi), affirm that parties must disclose all material facts before obtaining relief. Failure to disclose, particularly adverse facts, renders any orders irregular and liable to be struck out. That the evidence before the courts demonstrated that Westmont had been wound up for over a decade by the time of the appeal. Jasmine See admitted under cross-examination that she concealed this fact, thereby misleading the Court of Appeal into granting orders to a non-existent entity. Such conduct constitutes abuse of process and fraud upon the court. As emphasized in Rex vs. Kensington Income Commissioners, ex parte Princess Edmond de Polignac (supra), a party making an application must disclose all material facts; failure to do so deprives them of any advantage obtained. The concealment here was deliberate, and the orders obtained were therefore irregular. Accordingly, the cause of action had abated long before the Court of Appeal’s reinstatement order of 21st February 2014. Neither the High Court nor the Court of Appeal had jurisdiction to entertain the matter after 31st May 2003.Counsel for the appellant, by concealing material facts, acted improperly and deprived the court of the ability to exercise its jurisdiction fairly. The proceedings are therefore null ab initio. The appeal and the orders flowing from it must be struck out, as they were obtained fraudulently, irregularly, and without legal foundation. 44.On the fourth issue, CBK maintained that the payment was received by the Central Bank of Kenya (CBK) from Kamlesh Mansukhlal Pattni (KMP) on account of the redemption of the charge over the Grand Regency Hotel (GRH) and that the payment was indeed tied to the redemption arrangement. According to it, the amount was received strictly within the framework of the Charge and the attendant contractual agreements between CBK and KMP. That at no time was the amount made to appear as coming from either Westmont or Lynswood. No contract and/or agreement for the purchase of the hotel and terms thereof have ever existed to date between Westmont and Lynwood. That in the situation the plaintiffs had no legal premise to claim that the funds were for the purchase of the hotel, or were to be held as stakeholders, or that unjust enrichment obtained in favour of CBK. That the legal principles of contract law are clear: courts enforce contracts as agreed by the parties and do not rewrite them. In August 1993, KMP undertook to pay CBK Kshs.2.5 billion, secured by a charge over UHDL’s property, LR No. 209/9514 (the GRH). Later, in January 1997, KMP proposed a settlement of disputes involving CBK, the Treasury, and his companies, which included redemption of the GRH from CBK’s charge. CBK responded on 26th February 1997 through its advocates, Murgor & Murgor, setting out terms of settlement. These terms required UHDL to pay CBK the value of the GRH as determined by a joint valuation by Tysons Ltd and Lloyd Masika Ltd. That KMP accepted these terms in his letter of 14th March 1997, subject to minor reservations, and the agreement was finalised on 7th May 1997. Under this agreement, UHDL was to pay CBK Kshs.2.1 billion, less a credit of Kshs.145 million already paid, with the balance structured as follows: a 10% deposit of Kshs.195,500,000 by 15th May 1997 and the remaining Kshs.1,759,500,000 by 15th July 1997. That the banker’s cheque of Kshs.185,500,000 was delivered by KMP on 12th May 1997, and KMP being a party to the 2.1 billion redemption payment agreement and the terms thereof was therefore part of this redemption arrangement. The dispute arose when the appellant alleged that CBK failed to permit due diligence, thereby frustrating completion of the transaction. That, however, the record shows otherwise. CBK consistently reaffirmed that due diligence would be limited to inspection of the hotel’s assets and documents held by the Receiver, in line with the agreement. That the correspondence from CBK’s advocates dated 20th May 1997 confirmed this position, and UHDL itself acknowledged in its letter of 17th June 1997 that the inspection was proceeding satisfactorily. It was therefore CBK’s submission that the payment received was indeed on account of redemption of the GRH charge, but the appellant’s attempt to expand the scope of due diligence beyond what was agreed was unfounded. CBK had no obligation beyond the specific terms of the agreements dated 26th February and 7th May 1997. The failure to pay the balance of the redemption price by 15th July 1997 led CBK to rescind the arrangement and exercise its statutory power of sale under the charge. SC reiterated that the payment made by KMP was part of the redemption process and that the subsequent failure to adhere to the agreed terms rendered the redemption incomplete. CBK acted within its contractual rights, and the allegation that it blocked due diligence is unsupported by the documentary record.On the last issue, namely, whether the Central Bank of Kenya (CBK) received the contentious payment as a stakeholder or as a chargee, SC reiterated that the CBK’s position is that it received the payment in its capacity as a chargee, not as a stakeholder. That the record seen subsequently by CBK demonstrates that the parties to the Sale and Purchase Agreement, to which CBK was not a party, for the sale of shares in UHDL dated 25th March 1997, expressly appointed D.V. Kapila & Co. Advocates and Bhailal Patel & Patel Advocates to act as joint stakeholders. CBK was not a party to that arrangement. Its role was entirely distinct: CBK held a registered charge over the Grand Regency Hotel (GRH) as security for debts owed by KMP and UHDL. When KMP delivered the banker’s cheque of Kshs.185,500,000 on 12th May 1997, this was part satisfaction of the debt secured by CBK’s charge, not money held in trust pending completion of a sale agreement to which CBK was not a party. That the correspondence reinforces this position. Westmont itself acknowledged in its letter of 18th July 1997 that the GRH was to be redeemed from CBK’s charge, and the agreements of 26th February and 7th May 1997 clearly stipulated that UHDL was to pay CBK the redemption price. The balance of Kshs.1,759,500,000 was never paid, and CBK, acting within its contractual and statutory rights, proceeded to exercise its power of sale to recover taxpayer funds. Mr. Murgor SC submitted further that the Sale Agreement for shares between Westmont and the vendors (Pansal, HEDAM, and Mukesh Vaya) contained indemnity clauses and undertakings that any refund of deposits would be the responsibility of the vendors, not CBK. A letter from Lynwood dated 18th March 1997 also confirmed skepticism about releasing deposits to CBK, noting that CBK was not a party to the sale agreement and insisting that any guarantee had to come from KMP personally. As such, according to counsel, CBK had no contractual relationship with Westmont or Lynwood and no obligation to act as a stakeholder. Its only role was as a chargee enforcing its security. The payment made was applied towards redemption of the charge debt owed by UHDL and KMP. Any grievances by Westmont or Lynwood regarding refunds or indemnities lie against KMP and UHDL, not CBK. As a consequence, therefore, CBK received the payment strictly as a chargee, not a stakeholder. The claim that CBK acted as a stakeholder is unfounded, unsupported by the agreements, and contrary to the documentary record. That the High Court correctly found that CBK acted within its rights, and this Appeal Court should dismiss the appeal with costs. 45.In concluding, Counsel for the Central Bank of Kenya (CBK) submitted that the appellant has failed to demonstrate any error in law or fact by the learned Judge of the High Court. The Judge properly addressed himself to the applicable law, considered all relevant factors, and determined the matter on its merits in a manner supported by both evidence and legal principle. That the rulings and directions of the High Court delivered on 3rd October 2014, 12th May 2015, and 4th June 2015 remain unchallenged on appeal, and the appellant is estopped from belatedly disputing their legality or effect. The record clearly shows that the agreements of 26th February 1997 and 7th May 1997 were intended to facilitate repayment of monies defrauded in the Goldenberg scandal and to redeem the charge over the Grand Regency Hotel (GRH) held by CBK. Counsel submitted that the present claim, seeking Kshs.3,845,682,345.61, is nothing more than a fraudulent attempt to reopen the Goldenberg scandal under the guise of litigation. No witness from Westmont, Lynwood, or even KMP appeared before the High Court to substantiate the claim.Instead, the proceedings have been driven by shadowy actors, particularly Jasmine See, who sought to defraud CBK despite Westmont’s liquidation. Senior counsel prayed that the appeal be dismissed with costs to the respondent. 46.This is the first appeal, and the duty of this Court in a first appeal is well settled. This Court is obliged to re-evaluate the evidence and make its own conclusions, while bearing in mind that it did not see or hear the witnesses. In Selle vs. Associated Motor Boat Co. [1968] EA 123, Sir Clement de Lestang, V-P, stated:“An appeal to this Court from a trial by the High Court is by way of retrial, and the principles upon which this Court acts in such an appeal are well settled. Briefly put, they are that this Court must reconsider the evidence, evaluate it itself, and draw its own conclusions, though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect.” 47.Having considered the record and the submissions of the parties, the Court identifies the following issues for determination: whether this Court’s earlier authorisation to amend the pleadings extended to the licence to substitute; whether the learned Judge erred in concluding that the suit before the High Court had become incompetent in light of Westmont’s winding up; and whether the learned Judge erred in holding that CBK was not liable to refund the Kshs.185.5 million.Although we have identified three broad issues, the question concerning Westmont's legal capacity and the attempted substitution of Lynwood is logically anterior to the remaining issues. If the proceedings were incompetent for want of a proper plaintiff, the questions concerning agency and the character of the deposit would not arise. The question of capacity and substitution in this appeal is central to jurisdiction. Jurisdiction cannot attach unless proper parties are before the court. In Departed Asians Property Custodian Board vs. Jaffer Brothers Ltd [1999] 1 EA 55 (CAK), the Court of Appeal held that a suit instituted by a non-existent entity is a nullity ab initio.“A clear distinction is called for between joining a party who ought to have been joined as a defendant and one whose presence before the Court is necessary in order to enable the court to effectually and completely adjudicate upon and settle all questions involved in the suit. A party may be joined in a suit, not because there is a cause of action against it, but because that party’s presence is necessary in order to enable the court effectually and completely adjudicate upon and settle all the questions involve in the cause or matter… For a person to be joined on the ground that his presence in the suit is necessary for effectual and complete settlement of all questions in the suit, one of two things has to be shown. Either it has to be shown that the orders, which the plaintiff seeks in the suit, would legally affect the interests of that person and that it is desirable, for the avoidance of multiplicity of suits, to have such a person joined so that he is bound by the decision of the Court in that suit. Alternatively, a person qualifies (on an application of a defendant) to be joined as a co- defendant, where it is shown that the defendant cannot effectually set a defence he desires to set up unless that person is joined in it or unless the order to be made is to bind that person.”Similarly, in Owners of the Motor Vessel “Lillian S” vs. Caltex Oil (Kenya) Ltd [1989] KLR 1, Nyarangi, JA., underscored that jurisdiction flows from the presence of competent parties, and without such parties, the court must down its tools. 48.It is the view of this Court that failure to formally substitute Westmont Holdings SDN. BHD. after it was wound up on 21st May 2002 was fatal. The defect went into questions of the courts’ jurisdiction to entertain the matter and amounted to material nondisclosure to the court, which impeached the plaintiff's case. It is a legal fact that once a company is dissolved, it ceases to exist as a legal person and cannot maintain proceedings. Upon completion of the liquidation, the company’s name is struck off the register, and it ceases to exist as a legal entity. The legal consequences of dissolution are significant. The company loses its capacity to sue or be sued, and any undistributed property may vest in the State. However, certain liabilities of officers and members may continue, ensuring that dissolution does not become a shield for wrongdoing. 49.This Court notes, as the learned High Court Judge observed, that the Civil Procedure Rules, Order 24 Rule 3, obligates substitution of a natural person within one year. The section does not then address cases of corporate persons. However, the purpose and logic of this requirement and the time accommodation prescribed do very well resound with respect to a corporate person hence, it is applicable in the absence of explicit legal direction on the point. 50.We further hold that the attempt to substitute Lynwood Development Ltd. without leave was procedurally defective. The Court of Appeal authorities -Said Sweilem, Obat vs. Uduny, Kenya Farmers Co-operative Union vs. Murgor, and Benjoh Amalgamated v KCB - confirm that substitution after winding up must follow strict statutory procedure, failing which the suit abates. Since no revival was sought, Lynwood was introduced too late, and then the proceedings to that extent were irregular and incompetent. From the record of proceedings, Lynwood Development Ltd. was first introduced into the suit much later in its life cycle. Specifically, the attempt to substitute Westmont Holdings with Lynwood was made through an application dated 21st March 2014. This was after the Court of Appeal had reinstated the suit in Civil Appeal No. 118 of 2013, directing that it proceed on the basis of the original plaint of 26th October 1998 as amended in 1999. Further the attempt at substitution by the application dated 21st March 2014 came 12 years after Westmont was wound up on 31st May 2002 51.Westmont’s dissolution in 2002 extinguished its capacity to sue. Lynwood’s purported substitution without leave was irregular and could not cure the defect. The concealment of Westmont’s winding up during reinstatement proceedings amounted to material non-disclosure, disentitling the appellants to equitable relief. The High Court was therefore correct in holding that the suit was incompetent for want of proper parties. This ground alone is sufficient to dispose of the appeal, as jurisdiction cannot be founded on defective parties. 52.On the question whether the general order of reinstatement made by the Court of Appeal on 21st February 2014 permitted substitution of parties, we take the view that it did not. It is our view that introducing and/or changing parties to a suit is to be done by a court consciously and deliberately, through a formal application, setting out its justification, and giving the adverse party an opportunity to address its mind to the proposal. We draw a distinction between the two procedural devices of amendment and substitution. Substitution of parties is specifically provided for under Order 1, Rule 10(2), of the Civil Procedure Rules, 2010, which states:“The court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the court to be just, order that the name of any party improperly joined, be struck out, and that the name of any person who ought to have been joined, or whose presence before the court may be necessary in order to enable the court effectually and completely to adjudicate upon and settle all questions involved in the suit, be added.”This provision makes clear that substitution or joinder of parties requires a specific order of the court. It is not automatic and cannot be implied or inferred from a general leave to amend.Inversely, amendment of pleadings, on the other hand, is a broader procedural tool that allows correction, clarification, or addition to the pleadings already on record but does not in itself authorise the introduction of new parties. Amendment of pleadings is governed by Order 8 Rule 3(1) of the Civil Procedure Rules, 2010, which provides:“Subject to Order 1, Rules 9 and 10, Order 24, Rules 3, 4, 5 and 6, and the limitation period prescribed under the Limitation of Actions Act, the court may at any stage of the proceedings, on such terms as to costs or otherwise as it thinks just, allow any party to amend his pleadings.” 53.The order of reinstatement, properly construed, was intended to revive the appeal and permit amendment of pleadings to regularise the record. It did not, by its terms, extend to substitution of parties. On its face, it shows that substitution is a distinct step requiring express leave. By analogy, an order of reinstatement cannot be stretched to confer powers of substitution where none were expressly granted. 54.Accordingly, while the appellants were at liberty to amend their pleadings to cure defects, they could not rely on the reinstatement order as a licence to substitute parties. Substitution required a separate, specific application and leave of the Court. The purported substitution was, therefore, irregular, and the proceedings remained incompetent. This determination aligns with the principle that parties are bound by the scope of what has been brought to court, orders and directions given for determination of the cases. That substitution cannot be implied from a general leave to amend. 55.On the issue as to the nature of the deposit of Kshs.185,500,000, in the trial court, the appellants presented their case on the footing that the Kshs.185,500,000 was a deposit paid in good faith towards the purchase of the Grand Regency Hotel and, therefore, refundable once the sale collapsed. They relied on the banker’s cheque dated 12th May 1997 drawn on Citibank Nairobi, the CBK's written acknowledgement of receipt, and correspondence exchanged in March and April 1997. They argued that CBK had agreed to hold the deposit in a stakeholder capacity pending completion of the sale and that CBK’s subsequent diversion of the funds to reduce liabilities of Exchange Bank Ltd (in liquidation) and to settle advocates’ fees amounted to fraud, conversion, and breach of fiduciary duty. They also produced agency letters of 12th and 14th February 1997 appointing Westmont as agent for Lynwood and Lynwood’s bank statement showing remittance of US$3,700,000, which they claimed was the source of the banker’s cheque. Their case was anchored on failure of consideration, breach of trust, and unjust enrichment, contending that CBK’s refusal to refund the deposit despite collapse of the sale entitled them to restitution. 56.Conversely, CBK’s evidence was documentary and contractual in nature. It produced letters from its advocates, Murgor & Murgor, dated 26th February 1997 and 7th May 1997, which expressly tied the monies to the settlement of Exchange Bank Ltd.'s liabilities. CBK’s internal accounting records, ledger entries, and payment vouchers confirmed that the deposit was appropriated to reduce debts and pay professional fees. The respondent’s position was that it never undertook to hold the funds in trust, and that the only agreement was with Pattni and Uhuru Highway Development Ltd. 57.The proposition that the role of the court is to adjudicate disputes between contracting parties and not to rewrite their contract is beyond peradventure. In National Bank of Kenya Ltd vs Pipeplastic Samkolit (K) Ltd & Another [2001] eKLR, the Court of Appeal held that“A court of law cannot re-write a contract between the parties whereas its role is limited to interpretation of the same. This is because contracting parties are free to specify the terms and conditions of their agreement, and that when parties do contract, the court does not have the right or ability to substitute its judgment for that of the parties.” 58.For purposes of this question, we observe that there was no formal sale or contract agreement between CBK/respondent and Westmont and Lyndon/appellants. Further, the evidence shows that the cheque for the monies was delivered by K.M. Pattni, who obtained an acknowledgement of the amount. No evidence was adduced to suggest that he ensured that the acknowledgement was as part payment for the purchase. Nor that he had the amount delivered specifically designated as purchase funds. It, therefore, makes it complicated to discern how the appellants would peg the claim as purchase monies, or how the amount was to be held by CBK as stakeholders, or how the amount is to be deemed to amount to unjust enrichment. This quagmire is compounded by the fact that K.M. Pattni, who delivered it, was already in an active and running agreement between himself and UHDL on one side and CBK on the other side to pay 2.1 billion to redeem the hotel and discharge charge debt. 59.It is the view of this Court that the learned Justice Mwongo was justified to hold, as we similarly do, that the said Ksh.185,500,000 was to be treated in no other manner, other than as part settlement of amounts due to the chargee/CBK. From the record before us, the agreements exhibited by CBK demonstrated that the deposit was tied to debt settlement, not stakeholder obligations. 60.When weighed against each other, the appellants’ reliance on correspondence and agency letters did not establish a fiduciary or trust arrangement. On the other hand, CBK’s documentary evidence showed a clear contractual framework for debt settlement. 61.The burden of proof under Section 107 of the Evidence Act lay on the appellants. The decision of this Court in Karugi & Another vs. Kabiya & 3 Others [1987] KLR 347 is pertinent here: -“[T]he burden on a plaintiff to prove his case remains the same throughout the case even though that burden may become easier to discharge where the matter is not validly defended and that the burden of proof is in no way lessened because the case is heard by way of formal proof….The plaintiff must adduce evidence which, in the absence of rebuttal evidence by the defendant convinces the court that on a balance of probabilities it proves the claim.” 62.The appellants failed to discharge this burden. They failed to discharge the burden to show the amount was purchase funds and/or was to be held as stakeholders or that its retention by CBK amounted to unjust enrichment. The absence of an agreement with CBK is perhaps the most outstanding waterloo. This is compounded by the manner in which the payment was remitted, the identity of the remitting party – an acknowledged debtor - and the surrounding circumstances of the remittance. We are, therefore, persuaded, as was the trial court, that the appellants failed to establish a legally enforceable right to restitution. Accordingly, the claim for a refund of Kshs.185,500,000 cannot succeed. 63.As stated above, the appellant did not make out a case for reliefs on the basis of stakeholder obligations, unjust enrichment, or fraud on the question of stake holding. 64.The evidence adduced does not disclose any express contract and/or undertaking by the respondent CBK to hold the sum of Kshs.185,500,000 in a stakeholder capacity. We hold that the obligation to have held the funds as a stakeholder required of necessity that an anchor contract exist to provide a framework for the terms of such stakeholding and the contingencies the stakeholding is to secure, and also the events that are to trigger the handling and disposal of such funds held as a stakeholder. 65.Indeed, the ideal definition of a stakeholder is one who is under duty to hold money neutrally between parties, mostly engaged in a transaction. Mostly a stakeholder is in a position of not being interested in the said funds. Such a stakeholder would be awaiting the events agreed upon by the parties to dispose off the funds. Upon the occurrence of the event, the stakeholder becomes duty-bound to hand over the money to one or the other of the parties (for example, in a sale transaction, to the vendor if the transaction succeeds, or to the purchaser if the transaction fails). 66.It is fair to view a stakeholder’s characteristics as being one that is a neutral custodian of money; the money does not belong to the stakeholder; the stakeholder is to keep the funds safe, possibly in a stakeholder account; the stakeholder is to only release the funds according to the terms agreed upon by the parties or ordered by court; the stakeholder to become liable for any misapplication or unauthorised release of stakeholder funds. 67.The above considerations, with respect to a stakeholder, are reflected in this Court’s decision in Nelson Mutai t/a Kandie Mutai & Co. Advocates vs. Benson Mbuvi Kathenge [2019] eKLR KECA 978 (KLR) which acknowledged with approval earlier cases of George Muriaini Muhoro t/a A.M. Muhoro Advocate vs. George Ndungu Kamiti, Civil Appeal No. 233 of 2003 and the case of Kinluc Holdings Ltd vs. Mint Holdings Limited & Another, Civil Appeal No. 264 of 1997. 68.In the said case of Nelson Mutai, the Court stated that:“The appellant was a stakeholder, and the learned Judge correctly found him as one. The agreement was subject to the LSK conditions of sale requiring the deposit be held by an advocate as a stakeholder. ……….... The appellant was under an obligation to hold the deposit until the right to legal ownership had been established between the appellant and respondent. See the passage in George Muriaini Muhoro T/A A.M. Muhoro Advocate vs. George Ndungu Kamiti, (supra) where this Court expressed itself as follows on the duty of a stakeholder:“According to the Dictionary of English Law by Earl Jowitt:‘A stakeholder is a person with whom money is deposited pending the decision of a bet or a wager or one who holds money or property which is claimed by rival claimants but in which he himself claims no interest.’However, a stakeholder has a duty to deliver the money or property to the owner or owners once the right to legal possession or ownership has been established by judgement or by an agreement between competing parties. … The duty of care imposed on an advocate in such transactions was considered in the case of Kinluc Holdings Ltd vs. Mint Holdings Limited & Another (supra) where this Court held that:“The obligation of the purchaser to pay the balance of the purchase price and the obligation of the advocate to receive the said sum as a stakeholder and hold the same until successful completion are two factors closely interwoven, and it would be prudent for the superior court to decide on all issues at the same time to bring finality to the litigation.” 69.In the case at hand the appellant was unable to establish in law the footing upon which CBK could be deemed to have any stakeholder's obligations. On the inverse, the totality of the case shows that the respondent/CBK was not a neutral third-party holder of the funds but rather a debtor on an already due agreed sum of about Ksh.2.1 billion from, amongst others, K. M. Pattni, the individual who brought the funds in the form of a banker's cheque. The case also shows that the respondent had a basis to claim that the amount belonged to it as a chargee and was hence entitled to appropriate the amount. It is our view that the sum of the facts presented to court gives no legitimacy to the contention that the respondent misappropriated the funds as a stakeholder or otherwise. As it were, there was no relationship between CBK/respondent, who was allegedly supposed to hold the funds as a stakeholder on one hand, and Westmont and Lynwood, on the other hand, who are advancing the contested proposition that the funds be treated as belonging to them, and ought to have been held as stakeholders. 70.The appellant also anchored its claim on unjust enrichment. The doctrine of unjust enrichment traces its roots to Moses vs. Macferlan [1760] 2 Burr 1005, where Lord Mansfield articulated that the law implies a debt and a right to restitution “from the ties of natural justice and equity” whenever one party is unjustly enriched at the expense of another. That principle has since been absorbed into Kenyan jurisprudence, but always with the qualification that enrichment must be without legal justification. The remedy of this restitution for unjust enrichment has been held by courts to be distinct from remedies in contract and tort. That they fall into a third category of common law remedies designated as ‘quasi-contract' or 'restitution'. 71.The Court's consideration of the factors applicable in situations of unjust enrichment is reflected in various cases, including Chase International Investment Corporation vs. Laxman Keshra & Others [1978] eKLR, Samuel Kamau Macharia vv. Republic [2020] KEHC 4164 (KLR). The decisions and others are captured in a High Court decision by Hon. Justice Kizito Magare in Susan Njeri Wahome vs. Jane Mumbi Wanjiku [2025] KEHC 4382 (KLR), whose legal issues apply tothis case and whose reasoning we are in agreement with. The Court stated that:“ 27.Parties must signal an intention to enter into an agreement. None was expressed. By law, there was no agreement. The Appellant had, however, admitted receiving Ksh.300,000/= and repaying 48,900/=. This was a common ground. The court cannot allow her to escape, as doing so will amount to unjust enrichment. In Samuel Kamau Macharia v Kenya Commercial Bank Limited, Kenya Commercial Finance Company Limited [2003] eKLR, R. Kuloba J, as he then was, stated that unjust enrichment form ‘’the foundation of quasi-contractual claims, such as actions for money had and received and for money paid to a third party from which the defendant has derived a benefit, and equitable relief from undue influence and catching bargains, amongst other restitutionary claims. The idea of unjust enrichment or unjust benefit is intended to prevent a person from retaining money or some benefit derived from another which it is against conscience that he should keep, and he should, in justice, restore it to the plaintiff. The gist is that a defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to make restitution. As Lord Goff of Chieveley and Professor Gareth Jones state in their monumental treatise, The Law of Restitution, 5th edn (1998), at pp 11-12:“Most mature systems of law have found it necessary to provide, outside the fields of contract and civil wrongs, for the restoration of benefits on grounds of unjust enrichment.”This statement is founded on the observation of Lord Wright in the English case of Fibrosa Spolka Akeyjna v Fairbairn Lawson Combe Barbour, Ltd, [1943] AC 32, at p 61, where he said:“It is clear that any civilized system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit ……. Such remedies …… are generically different from remedies in contract or in tort, and are now recognized to fall within a third category of the common law which has been called quasi - contract or restitution.” 28.In the case of Chase International Investment Corporation and Another v Laxman Keshra and 3 Others [1978] eKLR, the Court of Appeal (Madan, Wambuzi & Law JJ A), addressed the question of unjust enrichment as doth:The benefit of Laxman’s work went to Chase as equitable owner of the property under the charge secured by the debenture. As counsel put it, every brick that Laxmanbhai laid became a Chase brick. And as the judge put it:Chase took his money and his services and materials in the lodges when it scooped the proceeds of the sale of the lodges by the receiver, which Chase asked [Devco] to effect under the trust deed for its debenture by appointing receivers and managers for [the company]. Most mature systems of law have found it necessary to provide, outside the fields of contract and civil wrongs, for the restoration of benefits on grounds of unjust enrichment. There are many circumstances in which a defendant may find himself in possession of a benefit which, in justice, he should restore to the plaintiff.“Obvious examples are where the plaintiff has himself conferred the benefit on the defendant through mistake or compulsion. To allow the defendant to retain such a benefit would result in his being unjustly enriched at the plaintiff’s expense, and this, subject to certain defined limits, the law will not allow ... The principle of unjust enrichment presupposes three things: first, that the defendant has been enriched by the receipt of a benefit; secondly, that he has been so enriched at the plaintiff’s expense; and thirdly, that it would be unjust to allow him to retain the benefit.”In the present case, the appellant's claim of unjust enrichment, that the respondent/CBK benefited from the remittance at its expense, we take the view that it is not supported by the available facts and law. The three requirements to found a cause for unjust enrichment emerging from the caselaw cited above are, firstly, that the party challenged has benefited and been enriched by the remittance, goods or services not due to it in law. Secondly, that the enrichment occurred at the claimant’s expense. Thirdly, that in good conscience and equity, it would be unjust to uphold the retention of the benefit. 72.In this case, with respect to the first test, the respondent/CBK was owed a due amount of about Kshs.2.1 billion by a debtor, Exchange Bank Limited and K. M. Pattni, on a charge. The amount in issue herein, Kshs.185,500,000, was brought by Mr. K. M. Pattni in the form of a banker’s cheque, Mr. K.M.P. Pattni being one of the parties to the Kshs.2.1 billion settlement agreement. There was no evidence at the material time, and no effort was made at the point in time to contend that the amount emanated from the appellants, Westmont and/or Lynwood. The respondent, on the face of all facts, was justified to treat the amount as part settlement of the charge debt. In the situation the second test, on enrichment at the expense of the appellants fails. Equally, the third test fails, as the respondent was justified in retaining the funds. It is lawfully viable in law for the respondent to retain, in good conscience and equity, the funds so as to reduce the debt owed to it. 73.It is thus clear the facts of the case when applied to the criteria of the law do not support the appellants' claim for unjust enrichment 74.On fraud it is our finding, concurrent with the superior court’s finding, that the appellant did not make out a case of fraud. In Vivo Energy Kenya Limited vs. Maloba Petrol Station Limited & 3 Others, Civil Appeal No. 21 of 2014; [2015] eKLR, this Court observed that:“Where fraud is alleged, it must be specially pleaded and particulars thereof given. That is what is required by Order 2 rule 10 of the Civil Procedure Rules, 2010. Way back in the 19th Century, Lord Penzance stated the principle thus, in Marriner V. Bishop of Bath And Wells [1893) P. 146: ‘The court will require of him who makes the charge that he shall state that charge with as much definiteness and particularity as may be done, both as regards time and place.”Equally in Central Kenya Ltd vs. Trust Bank Ltd & 4 Others, CA No. 215 of 1996: the Supreme Court stated“The appellant has made vague and very general allegations of fraud against the respondents. Fraud and conspiracy to defraud are very serious allegations. The onus of prima facie proof was much heavier on the appellant in this case than in an ordinary civil case.” 75.In the present matter, the appellants merely averred that the respondent misapplied the deposit of Kshs.185,500,000 and colluded with third parties to defeat their purchaser’s interest. This contention is bereft of particulars of fraud. No specific acts of forgery are given, such as misrepresentation, concealment, etc. On proof, the appellants relied on bare assertions and inferences from CBK’s application of the funds to Exchange Bank’s liabilities. That conduct, however, was consistent with CBK’s entitlement as the chargee and creditor. No witness testified to deliberate misrepresentation. Accordingly, the appellants failed both in pleading and in proof. The elevated evidentiary threshold required for fraud was not met. The mere assertion that the deposit was misapplied cannot, in law, sustain a finding of fraud. The claim of fraud failed. 76.On the issue that the respondent/CBK advanced a counterclaim seeking recovery of further sums allegedly due from Pattni, Westmont, and Uhuru Highway Development Ltd, said to arise from the Goldenberg transactions, we take the view as hereunder. 77.The law requires that a counterclaim, like any other pleading, must be specifically pleaded and strictly proved. Section 107 of the Evidence Act places the burden of proof on the party who asserts, and unless that burden is discharged, the court cannot grant relief. 78.In this case, CBK’s pleadings asserted indebtedness but did not adduce a factual basis nor demonstrate any contractual or statutory foundation for recovery beyond the deposit already appropriated. CBK did not demonstrate how the adverse parties, namely Westmont and Lyndon, are linked to the debt and/or K.M. Pattni, UHD Ltd., and/or Goldenberg. On this aspect there was the question whether the necessary parties were in court. 79.Courts, including this Court, have consistently held that special claims must be pleaded with precision and supported by cogent evidence. This position is reflected in the Ghanaian case of Arye & Akakpo vs. Ayaa Idrissu [2010] SCGLR, where the Court held that:“A party who counterclaims bears the burden of proving his counterclaim on the preponderance of probabilities and would not win on that issue only because the original claim had failed. The party wins on the counterclaim on the strength of his own case and not on the weakness of his opponent’s case…” 80.The evidence CBK relied upon-ledger entries, internal accounting records, and payment vouchers-only confirmed appropriation of the Kshs.185,500,000 deposit. These documents did not establish any further indebtedness or contractual obligation binding the appellants. Without a contractual nexus or statutory authority, internal records alone cannot ground a claim. 81.CBK failed in their obligations in law in both their burden of proof and standard of proof. CBK’s counterclaim was unsupported by evidence of a binding obligation on the appellants to pay additional sums. The respondent failed to demonstrate any enforceable right beyond the deposit already received. Accordingly, the counterclaim was unproven and fails, as the trial court correctly found. 82.Having considered the entirety of the appeal, we are persuaded that the learned Judge, Hon. Mwongo, was justified in deciding to entertain and determine both the Preliminary Objection and the main hearing at the same time, considering the age of the case, this Court’s direction for expeditious disposal, and possibly lingering questions of fact on the PO, some of which were actually combed out by the parties in evidence in chief and cross-examination. We are also in agreement with the learned Judge on issues identified and their determinations. We are unable to fault him on any aspect. 83.In the result, we find and hold that Westmont Holdings SDN. BHD., having been wound up, lacked capacity to prosecute the suit; Lynwood Development Ltd was improperly introduced without leave, thereby rendering the proceedings incompetent; the deposit of Kshs.185,500,000 was lawfully appropriated by CBK in discharge of Exchange Bank Ltd’s liabilities and was not refundable; and CBK’s counterclaim was unproven. 84.Accordingly, the appeal is dismissed in its entirety, with costs to the respondent both in this Court and in the High Court. DATED AND DELIVERED AT NAIROBI THIS 31ST DAY OF JULY, 2026JOEL NGUGI…………………JUDGE OF APPEALNDUMA NDERI…………………JUDGE OF APPEALKATWA KIGEN K. J.…………………JUDGE OF APPEALI certify that this is a true copy of the originalSignedDEPUTY REGISTRAR