RULING
1. Before me is a Notice of Motion application dated 18th July 2024 filed by the plaintiff/applicant pursuant to the provisions of Sections 1A, 3A & 63(a), (b) & (e) of the Civil Procedure Act, Order 39 Rules 1, 2, 5 & 6, Order 40 Rule 1 & Order 51 Rule 1 of the Civil Procedure Rules, 2010, and all other enabling provisions of the law.
2. The plaintiff prays for orders that a warrant of arrest be issued against the 1st defendant to show cause why he should not provide security for the sum of Kshs.106,258,486.00 and for an order for his appearance in Court, and/or deposit his passport with the Court, and in the event 1st the defendant fails to comply with the above, the 2nd defendant (sic) be detained until this suit is heard and determined. The plaintiff also prays for orders that the defendants be ordered to deposit Kshs.106,258,486.00 and/or provide security within 14 days that may be sufficient to satisfy the decree that may be issued against them. The plaintiff also seeks an order of temporary injunction restraining the defendants from selling, transferring, or otherwise disposing of their assets pending the determination of this suit.
3. The instant application is premised on the grounds on the face of the Motion, and it is supported by an affidavit sworn on the same day by Ms Elizabeth Njeri Kamau, the plaintiff herein. She averred that she opened a forex investment account with the defendants on 1st May 2023, agreeing to invest funds which would yield monthly compounded interest at 6.5%. She then invested Kshs.6,450,000/= in July and August 2023, but the defendants only paid two interest payments of Kshs.404,880.00 and Kshs.419,250.00, then abruptly stopped remitting interest from October 2023 onwards. Ms Kamau contended that between 9th September and 30th October 2023, she made a short-term USD investment of USD 370,000.00 to fund the purchase of land in Karen.
4. She averred that she executed a land sale agreement for Kshs.41,000,000/=, with a completion date set to be within 90 days, and a 10% forfeiture clause in case of default, but despite informing the defendants of this transaction and requesting for withdrawal of her funds on 13th November 2023, the defendants failed to refund any amount or pay interest. The plaintiff stated that the defendants have become unreachable, with their offices always closed, leading her to believe that they are deliberately avoiding her to evade refunding her investment. She contended that she fears the defendants may flee this Court’s jurisdiction to avoid satisfying any potential decree that may be issued against them.
5. Ms Kamau claimed that the defendants have no known realizable assets apart from customers’ investments, and she is apprehensive that she may be unable to execute any decree issued by this Court. She averred that she had been reliably informed that the defendants are facing multiple complaints from other customers and that they have been disposing of their assets to settle their outstanding debts. She claimed that she has a prima facie case with high chances of success and asserted that she stands to suffer irreparable harm in the event that the orders sought herein are not granted, as the defendants may render any judgment issued against them nugatory.
6. The instant application was canvassed by way of written submissions. The plaintiff’s submissions were filed on 18th November 2024 by the law firm of Nyambura, Kitela, Kanini & Kyatha Advocates. From the Case Tracking System (CTS) and the Court record, there is no evidence available for any response having been filed by the defendants by way of affidavit, grounds of opposition, a Notice of Preliminary Objection or written submissions in opposition to the application herein.
7. Ms Adongo, learned Counsel for the plaintiff submitted that her client entered into an agreement with the defendants who are Forex Traders, to invest funds on her behalf and remit to her monthly interest, but despite making several investments, the defendants failed to remit the agreed interest payments. She stated that as a result, the plaintiff is owed Kshs.18,595,117.00 and USD 679,561.00. Ms Adongo submitted that to support her claim, the plaintiff produced a wealth management application form dated 1st May 2023, money transfer printouts, account statements dated 2nd October 2023 & 6th November 2023, WhatsApp conversations and a dollar account statement. She further submitted that the defendants have not denied the debt, or the allegations of potential absconding or asset disposal, and it is in the interest of justice for the prayers sought herein to be granted.
8. To buttress her submissions, Ms Adongo relied on the Court of Appeal case of TNT Express Worldwide (Kenya) Limited v Timothy Graeme Steel (Civil Appeal E365 of 2018) [2022] KECA 881 (KLR) and the case of S N K v GT [2017] eKLR. She made reference to the provisions of Order 40 Rule 1 of the Civil Procedure Rules, 2010 and cited the Court of Appeal case of Nguruman Limited v Jan Bonde Nielsen & 2 others [2014] eKLR, she submitted that based on the fact that the defendants are disposing of their assets to settle debts owed to their other customers, this Court should issue an order for an injunction restraining the defendants from disposing of all their properties.
9. Counsel referred to the Court of Appeal case of Mrao Ltd v First American Bank of Kenya Ltd [2003] eKLR, and contended that the plaintiff has established a prima facie case with a probability of success, thus she is entitled to an order of temporary injunction. She argued that given that the defendants may dispose of all their assets and potentially flee this Court’s jurisdiction, even if damages are awarded, recovery would be impossible. She concluded her submissions by stating that the plaintiff stands to suffer irreparable injury in the event that the instant application is not allowed. Ms Adongo asserted that the balance of convenience tilts in favour of the plaintiff.
ANALYSIS AND DETERMINATION.
10. I have considered the application herein, the grounds on the face of it, the affidavit filed in support of the application and the written submissions by Counsel for the plaintiff. The issues that arise for determination are –
i) Whether the plaintiff has made out a case for being granted the orders being sought under the provisions of Order 39 Rules 1, 2, 5 & 6 of the Civil Procedure Rules, 2010; and
ii) Whether an order for temporary injunction should issue against the defendants.
Whether the plaintiff has made out a case for being granted the orders being sought under the provisions of Order 39 Rules 1, 2, 5 & 6 of the Civil Procedure Rules, 2010.
11. The conditions for a litigant being granted orders of attachment before judgment are provided for under Order 39 of the Civil Procedure Rules, 2010. The application herein has been brought under the provisions of Order 39 Rules 1, 2, 5 & 6 of the Civil Procedure Rules, 2010 which provides as hereunder-
Rule 1
Where at any stage of a suit, other than a suit of the nature referred to in paragraphs (a) to (d) of section 12 of the Act, the court is satisfied by affidavit or otherwise -
a) that the defendant with intent to delay the plaintiff, or to avoid any process of the court, or to obstruct or delay the execution of any decree that may be passed against him –
i) has absconded or left the local limits of the jurisdiction of the court; or
ii) is about to abscond or leave the local limits of the jurisdiction of the court; or
iii) has disposed of or removed from the local limits of the jurisdiction of the court his property or any part thereof; or
b) that the defendant is about to leave Kenya under circumstances affording reasonable probability that the plaintiff will or may thereby be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit,
the court may issue a warrant to arrest the defendant and bring him before the court to show cause why he should not furnish security for his appearance:
Provided that the defendant shall not be arrested if he pays to the officer entrusted with the execution of the warrant any sum specified in the warrant as sufficient to satisfy the plaintiff’s claim; and such sum shall be held in deposit by the court until the suit is disposed of or until the further order of the court.
Rule 2
1) Where the defendant fails to show such cause the court shall order him either to deposit in court money or other property sufficient to answer the claim against him, or to furnish security for his appearance at any time when called upon while the suit is pending and until satisfaction of the decree that may be passed against him in the suit, or make such order as it thinks fit in regard to the sum which may have been paid by the defendant under the proviso to rule 1.
2) Every surety for the appearance of a defendant shall bind himself, in default of such appearance, to pay any sum of money which the defendant may be ordered to pay in the suit.
Rule 5
1) Where at any stage of a suit the court is satisfied, by affidavit or otherwise, that the defendant, with intent to obstruct or delay the execution of any decree that may be passed against him –
a) is about to dispose of the whole or any part of his property;
b) is about to remove the whole or any part of his property from the local limits of the jurisdiction of the court,
the court may direct the defendant, within a time to be fixed by it, either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the court, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the decree, or to appear and show cause why he should not furnish security.
2) The plaintiff shall, unless the court otherwise directs, specify the property required to be attached and the estimated value thereof.
3) The court may also in the order direct the conditional attachment of the whole or any portion of the property so specified.
Rule 6
1) Where the defendant fails to show cause why he should not furnish security, or fails to furnish the security required, within the time fixed by the court, the court may order that the property specified, or such portion thereof as appears sufficient to satisfy any decree which may be passed in the suit, be attached.
2) Where the defendant shows such cause or furnishes the required security, and the property specified or any portion of it has been attached, the court shall order the attachment to be withdrawn, or make such other order as it thinks fit.
12. The principles governing attachment and/or arrest before judgment were laid down by the Court of Appeal in the case of Kuria Kanyoko t/a Amigos Bar and Restaurant v Francis Kinuthia Nderu, Helen Njeru Nderu and Andrew Kinuthia Nderu [1988] 2 KAR 1287-1334 as hereunder -
The power to attach before judgement must not be exercised lightly and only upon clear proof of the mischief aimed at by order 38, Rule 5, namely that the Defendant was about to dispose of his property or to remove it from the jurisdiction with intent to obstruct or delay any decree that may be passed against him.
13. The Court in the case of Shivam Enterprises Limited v Vijaykumar Tulsidas Patel T/A Hytech Investments [2006] KEHC 257, amplified the requirements of proof under Order 39 of the Civil Procedure Rules and made the following observation -
That a party would need to meet that high standard of proof before a party is ordered to supply security for the amount claimed. The jurisdiction that the Plaintiff invoked has to be appropriately exercised to ensure that a party meets the aforestated high standards. It ought to always be remembered that the purpose of that jurisdiction is to secure the Plaintiff against the Defendants act aimed at defeating judgment that may be entered. It is however not the intention of that jurisdiction to harass or to punish the Defendant before judgment is entered against him.
14. The plaintiff’s case is that she entered into an Agreement with the defendants, who were Forex Traders, to invest funds on her behalf with a promise that they would be remitting to her monthly interest at the rate of 6.5%. Her contention is that despite investing in both Kshs. and USD, the defendants have failed to remit interest as agreed since October 2023 and have to date not refunded the total amount owed being Kshs.18,595,117.00 and USD 679,561.00.
15. Upon perusal of the plaintiff’s affidavit in support of the application herein and the annexures attached thereto, it is evident that the plaintiff and the defendants entered into a Fund Management Agreement under which she invested funds to be traded with, on the promise of a monthly interest rate of 6.5% per annum. It is also evident that the 1st defendant acted as the plaintiff’s Chief Investment Officer. A perusal of the account statements, email extracts and WhatsApp communication between the plaintiff and the 1st defendant confirm that the plaintiff transferred Kshs.6,450,000/= and USD 370,000.00 to the defendants. A review of the said WhatsApp messages does not clearly indicate whether the dollar investment amount was ever remitted to the plaintiff or to the vendor for the parcel of land in Karen.
16. This Court notes that other than the plaintiff’s averment that the defendants only remitted monthly interest for the months of September & October 2023, there is no evidence of any further interest payments or refund of the plaintiff’s investment. Further, despite being duly served, the defendants did not respond or deny the plaintiff’s claims. As such, in the absence of any other evidence to the contrary, this Court is persuaded on a prima facie basis, that the plaintiff has demonstrated that the defendants are indebted to her.
17. It was the plaintiff’s contention that the defendants have since become unreachable and she suspects that they are evading her to avoid refunding her investment. She contended that she fears the defendants may flee the Court’s jurisdiction and stated that they have no known realizable assets apart from customers’ funds. Additionally, she averred that she had learnt that the defendants face similar complaints from their other customers, and that they are disposing of their assets to settle those debts.
18. On the issue of whether or not the defendants have any realizable assets, it is the defendants’ responsibility to demonstrate whether they have such assets, as the plaintiff can only make assertions based on her knowledge. Since the defendants did not respond to the application herein, I am inclined to believe the plaintiff’s assertions that the defendants are unreachable and have no known realizable assets apart from customers’ funds.
19. I am however not persuaded that the plaintiffs have discharged the burden of demonstrating that the defendants are either about to or have disposed of their property, or removed it from the Court’s jurisdiction, or absconded from the local limits of the jurisdiction of this Court. I say so because the 2nd defendant is a licensed Kenyan limited liability company, regulated by the Capital Markets Authority, and the 1st defendant resides in Kenya, which undermines the plaintiff's assertions of imminent flight or asset concealment.
20. I note that that the plaintiff did not provide a CR-12 for the 2nd defendant to confirm the nationality of its shareholders. Additionally, the claim that the defendants are facing multiple customer complaints and disposal of assets is unsupported by evidence, contrary to the provisions of Sections 107, 108 & 109 of the Evidence Act, which place the burden of proof on the party asserting a fact.
21. There is also a contradiction in the plaintiff’s position claiming that the defendants have no realizable assets, while in the same breath she also alleges that they are disposing of their assets to settle their outstanding debts.
22. In the case of Kanduyi Holdings Limited v Balm Kenya Foundation & another [2013] eKLR, the Court considered the scope of Order 39 of the Civil Procedure Rules, 2010 and held as hereunder: -
Accordingly, Order 39 Rules 5 and 6 of the CPR should operate within known dimensions of law drawing from the above case [Mareva Compania Navierra SA v International Bulkcarriers SA [1975] 2 Lloyd dis Rep 509] and other judicial precedents on the subject. Order 39 rule 5 and 6 of the CPR is not to be used to: 1) pressure a defendant; or 2) as a type of asset stripping (forfeiture); or 3) as a conferment of some proprietary rights on the plaintiff upon the assets of the Defendant. The purposes of any order that should be issued under Order 39 Rules 5 and 6 of the CPR is to prevent the Defendants or would be judgment-debtor from dissipating his assets as to have the effect of obstructing or delaying the execution of any decree that may be passed against him
23. The principles to be satisfied before a Court can grant a mareva injunction were laid down by the Court in the case of Beta Healthcare International Limited v Grace Mumbi Githaiga & 2 others [2016] eKLR, as hereunder: -
a) The claimant has ‘a good arguable case’ based on a pre-existing cause of action;
b) The claim is one over which the court has jurisdiction;
c) The defendant appears to have assets within the jurisdiction;
d) There is a real risk that those assets will be removed from the jurisdiction or otherwise dissipated if the injunction is not granted; and
e) There is a balance of convenience in favour of granting the injunction;
f) The Court can also order disclosure of documents or the administration of requests for further information to assist the claimant in ascertaining the location of the defendant’s assets. (Emphasis added).
24. From the foregoing decisions and the provisions of Order 39 of the Civil Procedure Rules, 2010, it is manifest that the threshold for granting the orders being sought herein is high and such orders should be granted sparingly. The burden of proof lies on the plaintiff herein to demonstrate that the defendants are either about to dispose of their property, or remove it from the Court’s jurisdiction, or that they are about to abscond from the local limits of the jurisdiction of the Court.
25. In the absence of proof that the defendants’ actions are intended to obstruct or delay the execution of any decree which may be passed against them, an order of attachment and/or of deposit of security cannot issue.
26. In view of the foregoing, I am not persuaded that the plaintiff has made out a case for being granted orders under the provisions of Order 39 Rules 1, 2, 5 & 6 of the Civil Procedure Rules, 2010.
Whether an order for temporary injunction should issue against the defendants.
27. Temporary injunctions are provided for under Order 40 Rule 1 of the Civil Procedure Rules, 2010 which states as hereunder –
Where in any suit it is proved by affidavit or otherwise-
a) that any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or
b) that the defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit,
the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further orders.
28. The principles for an interim injunction were enunciated by the Court in the oft cited case of Giella v Cassman Brown & Company Ltd. (supra) as follows-
i) First, the applicant must demonstrate a prima facie case with a probability of success at the trial;
ii) Second, an injunction will not normally be issued unless the applicant might otherwise suffer irreparable loss or injury; and
iii) If the court is in doubt as to the second principle, it shall decide the application on a balance of convenience.
29. What constitutes a prima facie case was defined by the Court of Appeal in the case of Mrao Ltd v. First American Bank of Kenya Ltd & 2 others (supra) as follows -
So what is a prima facie case? I would say that in civil cases it is a case in which on the material presented to the Court a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter. A prima facie case is more than an arguable case. It is not sufficient to raise issues but the evidence must show an infringement of a right, and the probability of success of the Applicant’s case upon trial. That is clearly a standard, which is higher than an arguable case.
30. This Court has already found that on a prima facie basis, the plaintiff has successfully demonstrated that the defendants are indebted to her, thereby establishing a prima facie case against the defendants with a probability of success to warrant the plaintiff being awarded an order of interlocutory injunction.
31. On the second limb of whether the defendants stand to suffer irreparable harm and damage that cannot be compensated by an award of damages in the event that the orders being sought are not granted, the plaintiff contended that in the event that the defendants are not restrained by way of an injunction from disposing of their assets, any judgment rendered in this suit in her favour shall be rendered nugatory as she will be unable to execute it.
32. I am satisfied that the plaintiff herein, has demonstrated that she invested with the defendants a total sum of Kshs.6,450,000/= and USD. 370,000.00. The defendants have however not denied or proved that they refunded the said amounts, I am therefore inclined to agree with the plaintiff that she is likely to suffer irreparable harm which cannot be adequately compensated by way of damages in the event that an order of injunction is not granted.
33. I am therefore persuaded that the balance of convenience tilts in favour of the plaintiff as she is likely to suffer immense financial loss in the event that an order of injunction is not granted.
34. It is my finding that the application herein is partly successful. It is hereby allowed in the following terms –
i) An order of temporary injunction is hereby issued restraining the defendants from selling, transferring, or otherwise disposing of their assets pending the hearing and determination of this suit; and
ii) Costs shall be in the main cause.
It is so ordered.
DATED, SIGNED and DELIVERED at NAIROBI on this 31ST day of JULY, 2025. Ruling delivered through Microsoft Teams Online Platform.
NJOKI MWANGI
JUDGE
In the presence of:
Ms Kamunya holding brief for Mr. Mbaluka for the plaintiff/applicant
No appearance for the defendants/respondents
Ms B. Wokabi – Court Assistant.
1. Before me is a Notice of Motion application dated 18th July 2024 filed by the plaintiff/applicant pursuant to the provisions of Sections 1A, 3A & 63(a), (b) & (e) of the Civil Procedure Act, Order 39 Rules 1, 2, 5 & 6, Order 40 Rule 1 & Order 51 Rule 1 of the Civil Procedure Rules, 2010, and all other enabling provisions of the law.
2. The plaintiff prays for orders that a warrant of arrest be issued against the 1st defendant to show cause why he should not provide security for the sum of Kshs.106,258,486.00 and for an order for his appearance in Court, and/or deposit his passport with the Court, and in the event 1st the defendant fails to comply with the above, the 2nd defendant (sic) be detained until this suit is heard and determined. The plaintiff also prays for orders that the defendants be ordered to deposit Kshs.106,258,486.00 and/or provide security within 14 days that may be sufficient to satisfy the decree that may be issued against them. The plaintiff also seeks an order of temporary injunction restraining the defendants from selling, transferring, or otherwise disposing of their assets pending the determination of this suit.
3. The instant application is premised on the grounds on the face of the Motion, and it is supported by an affidavit sworn on the same day by Ms Elizabeth Njeri Kamau, the plaintiff herein. She averred that she opened a forex investment account with the defendants on 1st May 2023, agreeing to invest funds which would yield monthly compounded interest at 6.5%. She then invested Kshs.6,450,000/= in July and August 2023, but the defendants only paid two interest payments of Kshs.404,880.00 and Kshs.419,250.00, then abruptly stopped remitting interest from October 2023 onwards. Ms Kamau contended that between 9th September and 30th October 2023, she made a short-term USD investment of USD 370,000.00 to fund the purchase of land in Karen.
4. She averred that she executed a land sale agreement for Kshs.41,000,000/=, with a completion date set to be within 90 days, and a 10% forfeiture clause in case of default, but despite informing the defendants of this transaction and requesting for withdrawal of her funds on 13th November 2023, the defendants failed to refund any amount or pay interest. The plaintiff stated that the defendants have become unreachable, with their offices always closed, leading her to believe that they are deliberately avoiding her to evade refunding her investment. She contended that she fears the defendants may flee this Court’s jurisdiction to avoid satisfying any potential decree that may be issued against them.
5. Ms Kamau claimed that the defendants have no known realizable assets apart from customers’ investments, and she is apprehensive that she may be unable to execute any decree issued by this Court. She averred that she had been reliably informed that the defendants are facing multiple complaints from other customers and that they have been disposing of their assets to settle their outstanding debts. She claimed that she has a prima facie case with high chances of success and asserted that she stands to suffer irreparable harm in the event that the orders sought herein are not granted, as the defendants may render any judgment issued against them nugatory.
6. The instant application was canvassed by way of written submissions. The plaintiff’s submissions were filed on 18th November 2024 by the law firm of Nyambura, Kitela, Kanini & Kyatha Advocates. From the Case Tracking System (CTS) and the Court record, there is no evidence available for any response having been filed by the defendants by way of affidavit, grounds of opposition, a Notice of Preliminary Objection or written submissions in opposition to the application herein.
7. Ms Adongo, learned Counsel for the plaintiff submitted that her client entered into an agreement with the defendants who are Forex Traders, to invest funds on her behalf and remit to her monthly interest, but despite making several investments, the defendants failed to remit the agreed interest payments. She stated that as a result, the plaintiff is owed Kshs.18,595,117.00 and USD 679,561.00. Ms Adongo submitted that to support her claim, the plaintiff produced a wealth management application form dated 1st May 2023, money transfer printouts, account statements dated 2nd October 2023 & 6th November 2023, WhatsApp conversations and a dollar account statement. She further submitted that the defendants have not denied the debt, or the allegations of potential absconding or asset disposal, and it is in the interest of justice for the prayers sought herein to be granted.
8. To buttress her submissions, Ms Adongo relied on the Court of Appeal case of TNT Express Worldwide (Kenya) Limited v Timothy Graeme Steel (Civil Appeal E365 of 2018) [2022] KECA 881 (KLR) and the case of S N K v GT [2017] eKLR. She made reference to the provisions of Order 40 Rule 1 of the Civil Procedure Rules, 2010 and cited the Court of Appeal case of Nguruman Limited v Jan Bonde Nielsen & 2 others [2014] eKLR, she submitted that based on the fact that the defendants are disposing of their assets to settle debts owed to their other customers, this Court should issue an order for an injunction restraining the defendants from disposing of all their properties.
9. Counsel referred to the Court of Appeal case of Mrao Ltd v First American Bank of Kenya Ltd [2003] eKLR, and contended that the plaintiff has established a prima facie case with a probability of success, thus she is entitled to an order of temporary injunction. She argued that given that the defendants may dispose of all their assets and potentially flee this Court’s jurisdiction, even if damages are awarded, recovery would be impossible. She concluded her submissions by stating that the plaintiff stands to suffer irreparable injury in the event that the instant application is not allowed. Ms Adongo asserted that the balance of convenience tilts in favour of the plaintiff.
ANALYSIS AND DETERMINATION.
10. I have considered the application herein, the grounds on the face of it, the affidavit filed in support of the application and the written submissions by Counsel for the plaintiff. The issues that arise for determination are –
i) Whether the plaintiff has made out a case for being granted the orders being sought under the provisions of Order 39 Rules 1, 2, 5 & 6 of the Civil Procedure Rules, 2010; and
ii) Whether an order for temporary injunction should issue against the defendants.
Whether the plaintiff has made out a case for being granted the orders being sought under the provisions of Order 39 Rules 1, 2, 5 & 6 of the Civil Procedure Rules, 2010.
11. The conditions for a litigant being granted orders of attachment before judgment are provided for under Order 39 of the Civil Procedure Rules, 2010. The application herein has been brought under the provisions of Order 39 Rules 1, 2, 5 & 6 of the Civil Procedure Rules, 2010 which provides as hereunder-
Rule 1
Where at any stage of a suit, other than a suit of the nature referred to in paragraphs (a) to (d) of section 12 of the Act, the court is satisfied by affidavit or otherwise -
a) that the defendant with intent to delay the plaintiff, or to avoid any process of the court, or to obstruct or delay the execution of any decree that may be passed against him –
i) has absconded or left the local limits of the jurisdiction of the court; or
ii) is about to abscond or leave the local limits of the jurisdiction of the court; or
iii) has disposed of or removed from the local limits of the jurisdiction of the court his property or any part thereof; or
b) that the defendant is about to leave Kenya under circumstances affording reasonable probability that the plaintiff will or may thereby be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit,
the court may issue a warrant to arrest the defendant and bring him before the court to show cause why he should not furnish security for his appearance:
Provided that the defendant shall not be arrested if he pays to the officer entrusted with the execution of the warrant any sum specified in the warrant as sufficient to satisfy the plaintiff’s claim; and such sum shall be held in deposit by the court until the suit is disposed of or until the further order of the court.
Rule 2
1) Where the defendant fails to show such cause the court shall order him either to deposit in court money or other property sufficient to answer the claim against him, or to furnish security for his appearance at any time when called upon while the suit is pending and until satisfaction of the decree that may be passed against him in the suit, or make such order as it thinks fit in regard to the sum which may have been paid by the defendant under the proviso to rule 1.
2) Every surety for the appearance of a defendant shall bind himself, in default of such appearance, to pay any sum of money which the defendant may be ordered to pay in the suit.
Rule 5
1) Where at any stage of a suit the court is satisfied, by affidavit or otherwise, that the defendant, with intent to obstruct or delay the execution of any decree that may be passed against him –
a) is about to dispose of the whole or any part of his property;
b) is about to remove the whole or any part of his property from the local limits of the jurisdiction of the court,
the court may direct the defendant, within a time to be fixed by it, either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the court, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the decree, or to appear and show cause why he should not furnish security.
2) The plaintiff shall, unless the court otherwise directs, specify the property required to be attached and the estimated value thereof.
3) The court may also in the order direct the conditional attachment of the whole or any portion of the property so specified.
Rule 6
1) Where the defendant fails to show cause why he should not furnish security, or fails to furnish the security required, within the time fixed by the court, the court may order that the property specified, or such portion thereof as appears sufficient to satisfy any decree which may be passed in the suit, be attached.
2) Where the defendant shows such cause or furnishes the required security, and the property specified or any portion of it has been attached, the court shall order the attachment to be withdrawn, or make such other order as it thinks fit.
12. The principles governing attachment and/or arrest before judgment were laid down by the Court of Appeal in the case of Kuria Kanyoko t/a Amigos Bar and Restaurant v Francis Kinuthia Nderu, Helen Njeru Nderu and Andrew Kinuthia Nderu [1988] 2 KAR 1287-1334 as hereunder -
The power to attach before judgement must not be exercised lightly and only upon clear proof of the mischief aimed at by order 38, Rule 5, namely that the Defendant was about to dispose of his property or to remove it from the jurisdiction with intent to obstruct or delay any decree that may be passed against him.
13. The Court in the case of Shivam Enterprises Limited v Vijaykumar Tulsidas Patel T/A Hytech Investments [2006] KEHC 257, amplified the requirements of proof under Order 39 of the Civil Procedure Rules and made the following observation -
That a party would need to meet that high standard of proof before a party is ordered to supply security for the amount claimed. The jurisdiction that the Plaintiff invoked has to be appropriately exercised to ensure that a party meets the aforestated high standards. It ought to always be remembered that the purpose of that jurisdiction is to secure the Plaintiff against the Defendants act aimed at defeating judgment that may be entered. It is however not the intention of that jurisdiction to harass or to punish the Defendant before judgment is entered against him.
14. The plaintiff’s case is that she entered into an Agreement with the defendants, who were Forex Traders, to invest funds on her behalf with a promise that they would be remitting to her monthly interest at the rate of 6.5%. Her contention is that despite investing in both Kshs. and USD, the defendants have failed to remit interest as agreed since October 2023 and have to date not refunded the total amount owed being Kshs.18,595,117.00 and USD 679,561.00.
15. Upon perusal of the plaintiff’s affidavit in support of the application herein and the annexures attached thereto, it is evident that the plaintiff and the defendants entered into a Fund Management Agreement under which she invested funds to be traded with, on the promise of a monthly interest rate of 6.5% per annum. It is also evident that the 1st defendant acted as the plaintiff’s Chief Investment Officer. A perusal of the account statements, email extracts and WhatsApp communication between the plaintiff and the 1st defendant confirm that the plaintiff transferred Kshs.6,450,000/= and USD 370,000.00 to the defendants. A review of the said WhatsApp messages does not clearly indicate whether the dollar investment amount was ever remitted to the plaintiff or to the vendor for the parcel of land in Karen.
16. This Court notes that other than the plaintiff’s averment that the defendants only remitted monthly interest for the months of September & October 2023, there is no evidence of any further interest payments or refund of the plaintiff’s investment. Further, despite being duly served, the defendants did not respond or deny the plaintiff’s claims. As such, in the absence of any other evidence to the contrary, this Court is persuaded on a prima facie basis, that the plaintiff has demonstrated that the defendants are indebted to her.
17. It was the plaintiff’s contention that the defendants have since become unreachable and she suspects that they are evading her to avoid refunding her investment. She contended that she fears the defendants may flee the Court’s jurisdiction and stated that they have no known realizable assets apart from customers’ funds. Additionally, she averred that she had learnt that the defendants face similar complaints from their other customers, and that they are disposing of their assets to settle those debts.
18. On the issue of whether or not the defendants have any realizable assets, it is the defendants’ responsibility to demonstrate whether they have such assets, as the plaintiff can only make assertions based on her knowledge. Since the defendants did not respond to the application herein, I am inclined to believe the plaintiff’s assertions that the defendants are unreachable and have no known realizable assets apart from customers’ funds.
19. I am however not persuaded that the plaintiffs have discharged the burden of demonstrating that the defendants are either about to or have disposed of their property, or removed it from the Court’s jurisdiction, or absconded from the local limits of the jurisdiction of this Court. I say so because the 2nd defendant is a licensed Kenyan limited liability company, regulated by the Capital Markets Authority, and the 1st defendant resides in Kenya, which undermines the plaintiff's assertions of imminent flight or asset concealment.
20. I note that that the plaintiff did not provide a CR-12 for the 2nd defendant to confirm the nationality of its shareholders. Additionally, the claim that the defendants are facing multiple customer complaints and disposal of assets is unsupported by evidence, contrary to the provisions of Sections 107, 108 & 109 of the Evidence Act, which place the burden of proof on the party asserting a fact.
21. There is also a contradiction in the plaintiff’s position claiming that the defendants have no realizable assets, while in the same breath she also alleges that they are disposing of their assets to settle their outstanding debts.
22. In the case of Kanduyi Holdings Limited v Balm Kenya Foundation & another [2013] eKLR, the Court considered the scope of Order 39 of the Civil Procedure Rules, 2010 and held as hereunder: -
Accordingly, Order 39 Rules 5 and 6 of the CPR should operate within known dimensions of law drawing from the above case [Mareva Compania Navierra SA v International Bulkcarriers SA [1975] 2 Lloyd dis Rep 509] and other judicial precedents on the subject. Order 39 rule 5 and 6 of the CPR is not to be used to: 1) pressure a defendant; or 2) as a type of asset stripping (forfeiture); or 3) as a conferment of some proprietary rights on the plaintiff upon the assets of the Defendant. The purposes of any order that should be issued under Order 39 Rules 5 and 6 of the CPR is to prevent the Defendants or would be judgment-debtor from dissipating his assets as to have the effect of obstructing or delaying the execution of any decree that may be passed against him
23. The principles to be satisfied before a Court can grant a mareva injunction were laid down by the Court in the case of Beta Healthcare International Limited v Grace Mumbi Githaiga & 2 others [2016] eKLR, as hereunder: -
a) The claimant has ‘a good arguable case’ based on a pre-existing cause of action;
b) The claim is one over which the court has jurisdiction;
c) The defendant appears to have assets within the jurisdiction;
d) There is a real risk that those assets will be removed from the jurisdiction or otherwise dissipated if the injunction is not granted; and
e) There is a balance of convenience in favour of granting the injunction;
f) The Court can also order disclosure of documents or the administration of requests for further information to assist the claimant in ascertaining the location of the defendant’s assets. (Emphasis added).
24. From the foregoing decisions and the provisions of Order 39 of the Civil Procedure Rules, 2010, it is manifest that the threshold for granting the orders being sought herein is high and such orders should be granted sparingly. The burden of proof lies on the plaintiff herein to demonstrate that the defendants are either about to dispose of their property, or remove it from the Court’s jurisdiction, or that they are about to abscond from the local limits of the jurisdiction of the Court.
25. In the absence of proof that the defendants’ actions are intended to obstruct or delay the execution of any decree which may be passed against them, an order of attachment and/or of deposit of security cannot issue.
26. In view of the foregoing, I am not persuaded that the plaintiff has made out a case for being granted orders under the provisions of Order 39 Rules 1, 2, 5 & 6 of the Civil Procedure Rules, 2010.
Whether an order for temporary injunction should issue against the defendants.
27. Temporary injunctions are provided for under Order 40 Rule 1 of the Civil Procedure Rules, 2010 which states as hereunder –
Where in any suit it is proved by affidavit or otherwise-
a) that any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or
b) that the defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit,
the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further orders.
28. The principles for an interim injunction were enunciated by the Court in the oft cited case of Giella v Cassman Brown & Company Ltd. (supra) as follows-
i) First, the applicant must demonstrate a prima facie case with a probability of success at the trial;
ii) Second, an injunction will not normally be issued unless the applicant might otherwise suffer irreparable loss or injury; and
iii) If the court is in doubt as to the second principle, it shall decide the application on a balance of convenience.
29. What constitutes a prima facie case was defined by the Court of Appeal in the case of Mrao Ltd v. First American Bank of Kenya Ltd & 2 others (supra) as follows -
So what is a prima facie case? I would say that in civil cases it is a case in which on the material presented to the Court a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter. A prima facie case is more than an arguable case. It is not sufficient to raise issues but the evidence must show an infringement of a right, and the probability of success of the Applicant’s case upon trial. That is clearly a standard, which is higher than an arguable case.
30. This Court has already found that on a prima facie basis, the plaintiff has successfully demonstrated that the defendants are indebted to her, thereby establishing a prima facie case against the defendants with a probability of success to warrant the plaintiff being awarded an order of interlocutory injunction.
31. On the second limb of whether the defendants stand to suffer irreparable harm and damage that cannot be compensated by an award of damages in the event that the orders being sought are not granted, the plaintiff contended that in the event that the defendants are not restrained by way of an injunction from disposing of their assets, any judgment rendered in this suit in her favour shall be rendered nugatory as she will be unable to execute it.
32. I am satisfied that the plaintiff herein, has demonstrated that she invested with the defendants a total sum of Kshs.6,450,000/= and USD. 370,000.00. The defendants have however not denied or proved that they refunded the said amounts, I am therefore inclined to agree with the plaintiff that she is likely to suffer irreparable harm which cannot be adequately compensated by way of damages in the event that an order of injunction is not granted.
33. I am therefore persuaded that the balance of convenience tilts in favour of the plaintiff as she is likely to suffer immense financial loss in the event that an order of injunction is not granted.
34. It is my finding that the application herein is partly successful. It is hereby allowed in the following terms –
i) An order of temporary injunction is hereby issued restraining the defendants from selling, transferring, or otherwise disposing of their assets pending the hearing and determination of this suit; and
ii) Costs shall be in the main cause.
It is so ordered.
DATED, SIGNED and DELIVERED at NAIROBI on this 31ST day of JULY, 2025. Ruling delivered through Microsoft Teams Online Platform.
NJOKI MWANGI
JUDGE
In the presence of:
Ms Kamunya holding brief for Mr. Mbaluka for the plaintiff/applicant
No appearance for the defendants/respondents
Ms B. Wokabi – Court Assistant.