1. This Ruling dispose of the Notice of Preliminary Objection dated 20th November 2024, filed by the 3-9th Respondents and the 1st interested party. Only these parties filed their written submissions in support of the objection. The 1st and 2nd respondents indicated their support for the preliminary objection and, consequently, did not file submissions. Similarly, the petitioners did not submit any arguments in opposition to the objection. Nevertheless, this court has a duty to assess the merits of the objection and determine its validity.
2. The preliminary objection dated 20th November 2024 is primarily based on the petitioner’s lack of locus standi to file the petition dated 11th November 2023. The petition seeks orders for the removal of the 3rd to 9th respondents’ names as directors of the 1st interested party. Additionally, it seeks an order compelling the 1st respondent to rectify the records by expunging the said names from the register of the 1st interested party.
3. Apart from the primary objection, the respondents also question whether the petitioner has locus standi to apply to the 1st respondent for relief under Section 862(2) of the Companies Act. This provision states:
"An application may be made by the company concerned or by any other person who appears to the Registrar to have a legitimate interest in making such an application."
4. Contrary to the submissions made, the petitioner explicitly pleads in the petition that she is a shareholder of the 1st interested party. To substantiate this claim, she has attached her share certificates to the petition’s supporting affidavit, found at pages 2,3 and 4. I am satisfied that as a shareholder, she meets the requirement of having a legitimate interest for purposes of an application under Section 862(2).
5. This explains why the 1st respondent engaged and acted on the complaints raised by the petitioner concerning the register of the 1st interested party, prior to filing this petition. If she had not been considered a party with a legitimate interest, the 1st respondent would not have had cause or reason to investigate the report.
6. On the petitioner’s locus to present the petition in her personal name as opposed to that of the 1st interested party, this position is well settled in law, dating back to the century old Salomon v Salomon [1897] AC 22. This case established the fundamental principle that a company has a separate legal existence and personality from that of its shareholders and directors. By virtue of this separate personality, the company has the ability to sue and be sued in its own name.
7. In line with this principle, various judicial pronouncements, some of which have been cited by the 3rd – 9th respondents and the 1st interested party, reaffirm that only a company has the capacity to enforce its legal rights. (See for instance Amin Akberali Manji & 2 others v Altaf Abdulrasul Dadani & another [2015] KECA 356 (KLR) and George W M Omondi & another v National Bank of Kenya Ltd & 2 others [2001] KEHC 841 (KLR)).
8. Upon reviewing the prayers sought in the petition, it is evident that they are not personal to the petitioner but are intended to serve the interests and benefit of the 1st interested party. Consequently, the petition cannot stand, as the proper aggrieved party is not the petitioner but the company itself. Having failed to satisfy the proper plaintiff principle, the petition must be struck out, as this issue goes to the very core of its validity. Having found as much, I do not find it necessary to address the other issues raised since the petition in any event, cannot stand.
Disposition
9. Accordingly, the preliminary objection is allowed, and the petition is hereby struck out with costs to the 3-9th respondents and the 1st interested party.
DATED, SIGNED AND DELIVERED IN NAIROBI
THIS 18th DAY OF FEBRUARY 2025.
F. MUGAMBI
JUDGE