Introduction
1. The Notice of Motion dated 18th September 2024 seeks enforcement of a consent order adopted by this Court on 1st July 2024 and, in default, the committal of the Respondents and certain alleged office bearers of the 1st Defendant to civil jail for contempt. The Applicants further seek orders directing the convening of a Special General Meeting for purposes of conducting elections.
2. The application is expressed to be brought under Section 280 of the Companies Act, 2015, Section 5 of the Judicature Act and the Civil Procedure Act and Rules. A copy of the impugned order adopted on 1st July 2024 is annexed to the application.
3. The application is opposed. The Respondents filed written submissions dated 11th April 2025 and a Replying Affidavit sworn on 8th October 2024 by James Ndambuki Kyeva.
Background
4. The dispute has its origin in a consent order recorded on 22nd August 2023 before the Deputy Registrar, by which the Defendants were directed, inter alia, to transfer 681 shares formerly held by the late David Mutuku Kioko to the 3rd and 4th Plaintiffs and to convene and hold the 1st Defendant’s Annual General Meeting on or before the end of February 2024.
5. When compliance was not forthcoming, the parties recorded a further consent dated 27th June 2024 and adopted by this Court on 1st July 2024. The material terms were that:
a. The Annual General Meeting scheduled for 29th June 2024 would proceed on condition that the agenda of elections be withdrawn and no elections be conducted; and
b. The 1st Defendant would hold a Special General Meeting within sixty (60) days from the date thereof and conduct elections in compliance with the earlier consent and the Companies Act, 2015.
6. It is common ground that no Special General Meeting was convened within sixty days from 27th June 2024. The Applicants contend that this constitutes deliberate disobedience of a court order.
7. The Respondents contend, first, that the AGM held on 29th June 2024 included elections and that the consent adopted on 1st July 2024 cannot operate retrospectively; secondly, that the orders of 11th October 2023 had been complied with; and thirdly, that the additional individuals sought to be cited for contempt are strangers to the suit.
Issues for Determination
8. The issues arising for determination are:
i. Whether the consent order adopted on 1st July 2024 was binding and enforceable as at 27th June 2024;
ii. Whether the Respondents disobeyed that order;
iii. Whether the threshold for contempt has been met;
iv. Whether non-parties can properly be cited for contempt in the present circumstances; and
v. What consequential orders ought to issue.
Analysis and Determination
(a) Nature and effect of the consent order
9. A consent order is not a mere private arrangement. Once adopted by the Court, it acquires the force of a judgment of the Court. It binds the parties unless set aside on grounds that would justify the setting aside of a contract.
10. The consent of 27th June 2024 was executed by counsel for both parties and filed in Court before adoption. The Respondents cannot approbate and reprobate. They cannot, on the one hand, agree that no elections would take place at the AGM of 29th June 2024 and, on the other, assert that elections were in fact conducted pursuant to earlier orders.
11. The argument that the order adopted on 1st July 2024 cannot apply to events of 29th June 2024 ignores the fact that the consent was signed and filed on 27th June 2024. The parties were bound by their own agreement from that date.
(b) Whether there was disobedience
12. The order required that a Special General Meeting be convened within sixty days from 27th June 2024 and that elections be conducted at that meeting.
13. There is no evidence before this Court that such a meeting was convened within the stipulated period. The Respondents’ case is not that the meeting was held within time. Their position is that elections were already held at the AGM of 29th June 2024.
14. That position is directly inconsistent with the express terms of the consent. The consent withdrew elections from the agenda of the AGM and provided for elections at a subsequent Special General Meeting.
15. On the material placed before Court, I am satisfied that the order requiring the holding of a Special General Meeting within sixty days was not complied with.
(c) Standard for contempt
16. The law on contempt is settled. The standard of proof is higher than on a balance of probabilities, though not as high as beyond reasonable doubt. The Court of Appeal in Mutitika v Baharini Farm Ltd (1985) KLR so held, a decision also relied upon by the Respondent.
17. Further, knowledge of a court order is sufficient. Personal service, while desirable, is not indispensable where knowledge is demonstrated.
18. In the present case, the consent was executed by counsel for the Respondents. Knowledge of the order is therefore not in doubt. The obligation to convene the Special General Meeting was clear, unambiguous and time-bound.
19. The failure to convene the meeting within sixty days has not been explained by any supervening impossibility. I therefore find that the 1st and 2nd Defendants were in breach of the consent order adopted on 1st July 2024.
(d) Whether non-parties may be cited
20. The Applicants seek committal of additional individuals described as office bearers. Those individuals have deponed that they are not parties to the suit and were not personally served.
21. Contempt proceedings are quasi-criminal. The person sought to be committed must be clearly identified, shown to have had knowledge of the order, and shown to have wilfully disobeyed it.
22. The order of 1st July 2024 was directed to the 1st Defendant and, by necessary implication, those responsible for its compliance. However, no sufficient material has been placed before Court demonstrating personal knowledge and wilful disobedience by each of the named individuals sought to be committed.
23. In those circumstances, and applying the higher standard required in contempt proceedings, I am not satisfied that the threshold for committal of the additional individuals has been met.
Conclusion and Orders
24. I find as follows:
a. The consent order adopted on 1st July 2024 was binding on the parties from 27th June 2024.
b. The 1st and 2nd Defendants failed to convene the Special General Meeting within sixty days as required and were therefore in breach of the order.
c. The threshold for a finding of contempt has been met as against the 1st and 2nd Defendants.
d. The threshold has not been met in respect of the additional individuals sought to be cited.
25. Given the circumstances of the present matter, and in order to secure compliance rather than to punish, and bearing in mind that contempt jurisdiction is to be exercised with restraint, I make the following orders:
i. The 1st Defendant shall convene and hold a Special General Meeting within forty-five (45) days from the date hereof for the sole purpose of conducting elections of its office bearers/directors in compliance with the consent orders of 22nd August 2023 and 1st July 2024 and in accordance with the Companies Act, 2015.
ii. The advocates on record for the parties shall personally attend and shall supervise the said meeting and elections.
iii. In default of compliance within the stipulated period, the Applicants shall be at liberty to move the Court for sentencing of the 2nd Defendant for contempt.
iv. The prayer for committal of the additional named individuals is declined.
v. Costs of the application shall be borne by the 1st and 2nd Defendants.
1. The Notice of Motion dated 18th September 2024 seeks enforcement of a consent order adopted by this Court on 1st July 2024 and, in default, the committal of the Respondents and certain alleged office bearers of the 1st Defendant to civil jail for contempt. The Applicants further seek orders directing the convening of a Special General Meeting for purposes of conducting elections.
2. The application is expressed to be brought under Section 280 of the Companies Act, 2015, Section 5 of the Judicature Act and the Civil Procedure Act and Rules. A copy of the impugned order adopted on 1st July 2024 is annexed to the application.
3. The application is opposed. The Respondents filed written submissions dated 11th April 2025 and a Replying Affidavit sworn on 8th October 2024 by James Ndambuki Kyeva.
Background
4. The dispute has its origin in a consent order recorded on 22nd August 2023 before the Deputy Registrar, by which the Defendants were directed, inter alia, to transfer 681 shares formerly held by the late David Mutuku Kioko to the 3rd and 4th Plaintiffs and to convene and hold the 1st Defendant’s Annual General Meeting on or before the end of February 2024.
5. When compliance was not forthcoming, the parties recorded a further consent dated 27th June 2024 and adopted by this Court on 1st July 2024. The material terms were that:
a. The Annual General Meeting scheduled for 29th June 2024 would proceed on condition that the agenda of elections be withdrawn and no elections be conducted; and
b. The 1st Defendant would hold a Special General Meeting within sixty (60) days from the date thereof and conduct elections in compliance with the earlier consent and the Companies Act, 2015.
6. It is common ground that no Special General Meeting was convened within sixty days from 27th June 2024. The Applicants contend that this constitutes deliberate disobedience of a court order.
7. The Respondents contend, first, that the AGM held on 29th June 2024 included elections and that the consent adopted on 1st July 2024 cannot operate retrospectively; secondly, that the orders of 11th October 2023 had been complied with; and thirdly, that the additional individuals sought to be cited for contempt are strangers to the suit.
Issues for Determination
8. The issues arising for determination are:
i. Whether the consent order adopted on 1st July 2024 was binding and enforceable as at 27th June 2024;
ii. Whether the Respondents disobeyed that order;
iii. Whether the threshold for contempt has been met;
iv. Whether non-parties can properly be cited for contempt in the present circumstances; and
v. What consequential orders ought to issue.
Analysis and Determination
(a) Nature and effect of the consent order
9. A consent order is not a mere private arrangement. Once adopted by the Court, it acquires the force of a judgment of the Court. It binds the parties unless set aside on grounds that would justify the setting aside of a contract.
10. The consent of 27th June 2024 was executed by counsel for both parties and filed in Court before adoption. The Respondents cannot approbate and reprobate. They cannot, on the one hand, agree that no elections would take place at the AGM of 29th June 2024 and, on the other, assert that elections were in fact conducted pursuant to earlier orders.
11. The argument that the order adopted on 1st July 2024 cannot apply to events of 29th June 2024 ignores the fact that the consent was signed and filed on 27th June 2024. The parties were bound by their own agreement from that date.
(b) Whether there was disobedience
12. The order required that a Special General Meeting be convened within sixty days from 27th June 2024 and that elections be conducted at that meeting.
13. There is no evidence before this Court that such a meeting was convened within the stipulated period. The Respondents’ case is not that the meeting was held within time. Their position is that elections were already held at the AGM of 29th June 2024.
14. That position is directly inconsistent with the express terms of the consent. The consent withdrew elections from the agenda of the AGM and provided for elections at a subsequent Special General Meeting.
15. On the material placed before Court, I am satisfied that the order requiring the holding of a Special General Meeting within sixty days was not complied with.
(c) Standard for contempt
16. The law on contempt is settled. The standard of proof is higher than on a balance of probabilities, though not as high as beyond reasonable doubt. The Court of Appeal in Mutitika v Baharini Farm Ltd (1985) KLR so held, a decision also relied upon by the Respondent.
17. Further, knowledge of a court order is sufficient. Personal service, while desirable, is not indispensable where knowledge is demonstrated.
18. In the present case, the consent was executed by counsel for the Respondents. Knowledge of the order is therefore not in doubt. The obligation to convene the Special General Meeting was clear, unambiguous and time-bound.
19. The failure to convene the meeting within sixty days has not been explained by any supervening impossibility. I therefore find that the 1st and 2nd Defendants were in breach of the consent order adopted on 1st July 2024.
(d) Whether non-parties may be cited
20. The Applicants seek committal of additional individuals described as office bearers. Those individuals have deponed that they are not parties to the suit and were not personally served.
21. Contempt proceedings are quasi-criminal. The person sought to be committed must be clearly identified, shown to have had knowledge of the order, and shown to have wilfully disobeyed it.
22. The order of 1st July 2024 was directed to the 1st Defendant and, by necessary implication, those responsible for its compliance. However, no sufficient material has been placed before Court demonstrating personal knowledge and wilful disobedience by each of the named individuals sought to be committed.
23. In those circumstances, and applying the higher standard required in contempt proceedings, I am not satisfied that the threshold for committal of the additional individuals has been met.
Conclusion and Orders
24. I find as follows:
a. The consent order adopted on 1st July 2024 was binding on the parties from 27th June 2024.
b. The 1st and 2nd Defendants failed to convene the Special General Meeting within sixty days as required and were therefore in breach of the order.
c. The threshold for a finding of contempt has been met as against the 1st and 2nd Defendants.
d. The threshold has not been met in respect of the additional individuals sought to be cited.
25. Given the circumstances of the present matter, and in order to secure compliance rather than to punish, and bearing in mind that contempt jurisdiction is to be exercised with restraint, I make the following orders:
i. The 1st Defendant shall convene and hold a Special General Meeting within forty-five (45) days from the date hereof for the sole purpose of conducting elections of its office bearers/directors in compliance with the consent orders of 22nd August 2023 and 1st July 2024 and in accordance with the Companies Act, 2015.
ii. The advocates on record for the parties shall personally attend and shall supervise the said meeting and elections.
iii. In default of compliance within the stipulated period, the Applicants shall be at liberty to move the Court for sentencing of the 2nd Defendant for contempt.
iv. The prayer for committal of the additional named individuals is declined.
v. Costs of the application shall be borne by the 1st and 2nd Defendants.