1. The plaintiff/Applicant file a Notice of Motion application under the provisions of Order 40 rule 1, 2, Rule 3, 4(1) & 51 Rule 1of the civil procedure rules & section 103 (1) (a) and 104 (2) (b) of the Land Act 2012 seeking that;
1 …. spent
2 …. spent
3 THAT pending the hearing of the suit, there be an order of injunction restraining the Defendant, its servants or agents, Advocates or Auctioneers or any other person acting for and/or on its behalf whosoever from advertising for sale and conducting public auction or in any other way howsoever, whether by public auction, private treaty or howsoever, in exercise of statutory power of sale under any such notices issued over the properties known as LOITOKITOK/OLKARIA/245, LOITOKITOK/ROMBO A/322, LKT/NGAMA/2562 AND LOITOKITOK/EMPERON/2674
4 THAT in exercise of jurisdiction under section 104 (2) (b) of the Land Act ,2012 an Order of the court be and is Hereby issued extending the period within which the plaintiffs have to redeem the charges over LOITOKITOK/OLKARIA/245, LOITOKITOK/ROMBO A/322, LKT/NGAMA/2562 AND LOITOKITOK/EMPERON/2674 respective charges, statutory Notices dated 29th December 2023 and Notification of Sale dated 26th July 2024 respectively for an initial period of Seven months from the date of the Order, reviewable for cause.
2. By way of background, the plaintiff are directors of Interfraan African Petro Station Limited a company under licence agreement with Rubis Energy Kenya PLC for retail of petroleum products then operating two petrol stations at Loitokitok and Kimana.The plaintiffs/applicant are also registered owners of LOITOKITOK/OLKARIA/245, LOITOKITOK/ROMBO A/322, LKT/NGAMA/2562 AND LOITOKITOK/EMPERON/2674.
3. The applicants applied and obtained several loan facilities from the defendant over which the above properties were offered and charged as security. In addition to the Bank facility, the defendant also issued a Bank guarantee to Rubis Energy Kenya PLC on behalf of Interfraan Africa Petro Station Limited for Ksh 6,000,000 for the supply of petroleum products.
4. The applicants state that in the year 2023, a disagreement between the plaintiffs’ company and Rubis Energy occurred consequent upon which Rubis Energy without notice took over Kimana Petrol station and stopped supplying Interfraan African Petrol Station with products for retail thereby immediately affecting the applicant’s revenue as well as loan repayment. Similarly, the petrol station at Loitokitok under Rubis franchise was not supplied with products for retail and therefore the core business on account of which the loan facilities were paid was stopped leading to default on their part. As a result, the defendant issued statutory notices on 29th December 2023.
5. The applicants contend that as directors of Interfraan African petrol station Limited they’ve had engagements with Rubis Energy with a view of resolving the dispute and have resumption supply of the petroleum products without success. That throughout these discussions the Defendant have been kept in the know and their understanding sought. It is the applicant position that when the efforts to resolve the dispute with Rubis Energy failed, the matter was referred to Arbitration.
6. In the meantime, and as a consequence of the notices issued on 29th December 2023, the defendant instructed Gallant Worldwide Auctioneers on 26th July 2024 following which Notification of Sale and Redemption Notices were issued and served upon the upon the plaintiffs.
7. The plaintiff/applicant is apprehensive that should this court not intervene and stop the defendant from disposing off the charged property pending the outcome of the arbitration before the tribunal, they are certain to suffer egregiously and their right to redeem the property shall be permanently foreclosed. The applicant therefore seeks an opportunity to have the arbitration proceedings determined in order to redeem the charges, in the hope that the claim of 150,000,000 against Rubis Energy Kenya PLC would succeed.
8. In opposition to the application, the Defendant/Respondent filed grounds of opposition and Replying affidavit both dated 24th January 2025 contending that the applicant approached the respondent for a credit facility of Ksh 25,457,669 and offered their property as security. In addition to the charged property, the applicants gave personal Bank guarantees for the due performance of the loan in the event of default by Interfraan African Petrol Station Limited, a company in which the applicants are directors.
9. As circumstances would have it, the applicants defaulted in their obligations to pay the facility as and when it fell due and the respondent invoked and exercised its statutory power of sale by issuing requisite statutory notices requiring the regularization by payment of the arrears failure to which the respondent would realise the security to recover the amount outstanding. The respondent contends that the applicant neither disputes the validity of the notices issued nor the amount due in arrears and that unless sufficient grounds are demonstrated, the court should not accede to the applicant request for intervention. In any event, the respondent contends that there is admission of default on the part of the applicant and to request the court to intervene whereas the respondent has observed the law and procedure is akin to rewriting the agreement reached by the parties as opposed to enforcing it without evidence of fraud or illegality.
10. The respondent aver that it is not a party to the pending arbitration between the applicants Company and Rubis Energy Limited and that the agreement between them is independent of the agreement involving the respondent and the applicant. That pegging the issuance of interim orders on the existence of litigations between the applicants and third parties is strange to the law and that there is no guarantee that the arbitration proceedings will be resolved in the applicant’s favour. The respondent argues that section 103 of the Land Act cannot be read in isolation from section 90 of the Land Act which equally provides remedies for a chargee in the event of default by chargor. That despite the fact that the applicants are in default a fact not in dispute, they have not taken any steps to remedy the default nor challenged the validity of the Statutory Notices issued.
11. Mr Echesa, Counsel for the applicant in his oral and written submissions mainly urges the court to grant the applicants reliefs pursuant to section 104 (2) (b) albeit for a limited period of seven months from the date of such order to avert the sale of the applicant’s property. That the default by the applicant to service the loan facility was not wilful but arose out of breach of agreement by Rubis Energy to supply petroleum products to its company thus depriving it of business and compromising its ability to pay the facility advanced.
12. Counsel submit that the main reason the chargor seeks the extension of time within which to pay the amount owed, is to allow the conclusion of the arbitration proceeding and once that is done, and depending on the outcome, there shall be compliance and payment of the loan facilities. Further that if the outcome of the arbitration proceedings is successful, then the applicant will fully redeem the charge and if not, then the company shall be able to obtain another franchise to enable it resume the retail business.
13. The Respondent submit that the relationship between the parties is governed by the duly executed contractual instruments whose terms are clear, lawful and binding. That the parties freely negotiated and executed the agreement, which comprehensively set out the respective rights and obligations of each party. The respondent further submit that it was an express term of the agreement that in the event of default by the plaintiffs in servicing the facility, the defendant would be entitled to take all lawful steps necessary to protect its interest including realization of the charged securities.
14. It is submitted that the defendant is a financial institution entrusted with depositors’ funds, which are advanced to borrowers on agreed terms and are payable within specified timeless and that defendant bears fiduciary and statutory obligations to safeguard those funds and ensure that they are neither lost nor dissipated through borrowers’ default.
15. It is urged that the applicants have not established any valid grounds to warrant the issuance of injunctive orders sought as there has been no infringement of any right owed to the applicants, instead the applicants are in breach and defaulted in servicing the loan advanced to them. The Case of Mrao Ltd vs First American Bank of Kenya Ltd & 2 others is cited where the court stated as follows;
“I have always understood that it is the duty of any person entering into a commercial transaction particularly one in which a large amount of money is involved to obtain the best possible legal advice so that he can better understand his obligations under the documents to which he appends his signature or seal. If courts are going to allow debtors to avoid paying their just debts by taking some of the defences I have seen in recent times for instance challenging contractual interest rates, banks will be crippled if not driven out of business altogether and no serious investors will bring their capital into a country whose courts are a haven of defaulters. I agree entirely with the commissioner of Assize Shah that the Appellant was not entitled to an injunction upon any one of the grounds urged on its behalf.”
16. The respondent submit that it is not correct for the applicant to attribute default to contractual arrangement with a third party as the same was not part of, nor incorporated into the contractual terms governing the facility between the applicants and the respondent. As regards the reliefs under section 103 and 104 of the Land Act, the respondent submits that the same is not automatic nor available as of right. It is equitable and discretionary in nature and is granted only in appropriate circumstances where sufficient cause has been demonstrated.
ANALYSIS AND DETERMINATION.
17. I have considered the applicants application and the supporting affidavit as well as the respondent’s grounds of opposition together with the replying affidavit. Counsel for both parties also filed respective submissions and supplied authorities which were highlighted in brief.
18. Although the application is premised on the provisions of Order 40 rule 1, 2, Rule 3, 4(1) & Rule 51 of the civil procedure rules, the reliefs sought are mainly hinged on section 103 (1) (a) and 104 (2) (b) of the Land Act 2012 and elaborated in the applicant’s submissions both oral and written.
19. The issue therefore in my view for the court’s consideration is whether the applicants have in the circumstances of this case met the threshold for grant of relief under section 103 and 104 of the Land Act.
20. Section 103(1) of the Land Act in the pertinent part provides; “ an application for relief against the exercise by the Chargee of any of the remedies referred to in Section 90 (3) may be made by, a Chargor at any time after the service of the notice under section 90 (1) and 91 (2), section 94 (1), and 95 (1) or during the exercise of any of the remedies contemplated in those sections”.
21. These provisions of the law avail an opportunity to the borrower to approach the court for reliefs contemplated in section 90 of the Land Act including a stay of the intended sale by the chargee.
22. In the instant case, it is not in dispute that the defendant/chargee had put in motion the process of exercising one of the remedies provided for, that is the sale of the applicant’s property by issuance of the statutory notices. There is no denying that statutory notices were duly issued and served in accordance with the law. The applicants too do not deny that they are in default. What they are asking is indulgence by the court to allow them pursue a pending claim before the arbitration tribunal which they are hopeful would be successful. the optimism by the applicants is on the basis that the third party is in breach of the agreement to supply petroleum product.
23. Section 104 of the Land Act provides considerations that the court should bear in mind in deciding whether or not to grant relief to the chargor.
24. Section 104, which the Applicant heavily relied on in relevant part provides;
“(1) In considering whether to grant relief as applied for, a court—
a. shall, have regard to whether the remedy which the chargee proposes to exercise is reasonably necessary to prevent any or any further reduction in the value of the charged land or to reverse any such reduction as has already occurred if the charged land consists of agricultural land or commercial premises, and the remedy proposed is to appoint a receiver, or to take possession of or lease the land or a part thereof;
b. shall where the charged land consists of or includes a dwelling house, and the remedy proposed is to appoint a receiver, or take possession or lease the dwelling house or a part of it, have regard to the effect that the appointment of a receiver or the taking of possession or leasing the whole or a part of the dwelling house would have on the occupation of the dwelling house by the chargor and dependants and if the effect would be to impose undue disturbance on those owners, whether it is satisfied that;
(2) A court may refuse to grant an order under subsection (1) or may grant any relief against the operation of a remedy that the circumstances of the case require and without limiting the generality of those powers, may—
b Extend the period of time for compliance by the chargor with a notice served under section 90…
25. From the above it is clear that a borrower can apply for relief, when the chargee seeks to exercise its statutory power of sale. The rules do not set out the principles that a court should apply before granting relief. There is no doubt however that a chargor who alleges breaches of covenant, or who contend that a sale should not proceed because of irregularities in the process leading to the sale, may be entitled to relief.
26. However, in this case, the plaintiffs/applicants do not allege any breaches of covenant, and neither do they claim that the Bank is not entitled to exercise its statutory power of sale. Indeed, default is admitted. What plaintiffs/applicants seeks, is that pursuant to the provisions of Section 103 and 104 of the Land Act, 2012, they are entitled to an extension of time within which to comply and make good the default.
27. The applicant believes that the extension of time if granted would offer an opportunity for them to conclude the claim against Rubis Energy now pending determination before the arbitrator and in which they are hopeful would be resolved in their favour.
28. Firstly, there is no telling when the dispute between the applicant and Rubis Energy Limited would be concluded and whether such determination would be in the applicant’s favour. This is because the respondent had raised a counterclaim against the applicants claim. Secondly, the dispute could go either way and it is not in the province of this court to engage in speculations on a matter not before it.
29. Thirdly, even where the arbitration proceedings are finally determined one way or the other, an aggrieved party is at liberty to challenge the outcome in an appropriate forum. To stop the respondent from exercising its statutory power of sale pending resolution of a dispute outside the control of this court and whose outcome is speculative in nature is clearly not the intention contemplated by section 103 and 104 of the Land Act. The law contemplates a situation where the borrower presents a clear and realistic plan for payment of the amount owed for instance disposing of another property to pay the loan or offer a viable restructuring of the debt. In the instant case, the applicants have not come up with a concrete proposal on how they intend to settle the amount due. I also note that vide letter dated 23rd April 2024, Interfraan African Petrol Station Ltd in which the applicants are directors, had informed the defendant of a land valued 20,000,000 that had been put up for sale. There has not been any mention of the said proposal and/or what became of it.
30. My finding therefore is that the applicants have not met the threshold for grant of equitable relief under section 104 (2) (b) of the Land Act.
31. This finding notwithstanding, I am alive to the applicant’s contention that the default which was readily admitted, was as a result of alleged acts or omissions of a third party whose conduct substantially affected the applicant’s business. The effect of the third-party actions against the applicant meant that the applicant could not continue with the dealership agreement they had, nor enter into a new arrangement with others until the dispute is resolved.
32. Consequently, I make the following order;
1 THAT In exercise of the jurisdiction under section 104 (2) (b) of the Land Act ,2012 an Order is Hereby issued extending the period within which the plaintiffs have to redeem the charges over LOITOKITOK/OLKARIA/245, LOITOKITOK/ROMBO A/322, LKT/NGAMA/2562 AND LOITOKITOK/EMPERON/2674 respective charges, statutory Notices dated 29th December 2023 and Notification of Sale dated 26th July 2024 respectively for a period of Seven months from the date of the Order.
2 THAT after the expiry of the Seven months, the Respondents shall be at liberty to proceed and realize the charged securities.
3 THAT there shall be no order as to cost.
1 …. spent
2 …. spent
3 THAT pending the hearing of the suit, there be an order of injunction restraining the Defendant, its servants or agents, Advocates or Auctioneers or any other person acting for and/or on its behalf whosoever from advertising for sale and conducting public auction or in any other way howsoever, whether by public auction, private treaty or howsoever, in exercise of statutory power of sale under any such notices issued over the properties known as LOITOKITOK/OLKARIA/245, LOITOKITOK/ROMBO A/322, LKT/NGAMA/2562 AND LOITOKITOK/EMPERON/2674
4 THAT in exercise of jurisdiction under section 104 (2) (b) of the Land Act ,2012 an Order of the court be and is Hereby issued extending the period within which the plaintiffs have to redeem the charges over LOITOKITOK/OLKARIA/245, LOITOKITOK/ROMBO A/322, LKT/NGAMA/2562 AND LOITOKITOK/EMPERON/2674 respective charges, statutory Notices dated 29th December 2023 and Notification of Sale dated 26th July 2024 respectively for an initial period of Seven months from the date of the Order, reviewable for cause.
2. By way of background, the plaintiff are directors of Interfraan African Petro Station Limited a company under licence agreement with Rubis Energy Kenya PLC for retail of petroleum products then operating two petrol stations at Loitokitok and Kimana.The plaintiffs/applicant are also registered owners of LOITOKITOK/OLKARIA/245, LOITOKITOK/ROMBO A/322, LKT/NGAMA/2562 AND LOITOKITOK/EMPERON/2674.
3. The applicants applied and obtained several loan facilities from the defendant over which the above properties were offered and charged as security. In addition to the Bank facility, the defendant also issued a Bank guarantee to Rubis Energy Kenya PLC on behalf of Interfraan Africa Petro Station Limited for Ksh 6,000,000 for the supply of petroleum products.
4. The applicants state that in the year 2023, a disagreement between the plaintiffs’ company and Rubis Energy occurred consequent upon which Rubis Energy without notice took over Kimana Petrol station and stopped supplying Interfraan African Petrol Station with products for retail thereby immediately affecting the applicant’s revenue as well as loan repayment. Similarly, the petrol station at Loitokitok under Rubis franchise was not supplied with products for retail and therefore the core business on account of which the loan facilities were paid was stopped leading to default on their part. As a result, the defendant issued statutory notices on 29th December 2023.
5. The applicants contend that as directors of Interfraan African petrol station Limited they’ve had engagements with Rubis Energy with a view of resolving the dispute and have resumption supply of the petroleum products without success. That throughout these discussions the Defendant have been kept in the know and their understanding sought. It is the applicant position that when the efforts to resolve the dispute with Rubis Energy failed, the matter was referred to Arbitration.
6. In the meantime, and as a consequence of the notices issued on 29th December 2023, the defendant instructed Gallant Worldwide Auctioneers on 26th July 2024 following which Notification of Sale and Redemption Notices were issued and served upon the upon the plaintiffs.
7. The plaintiff/applicant is apprehensive that should this court not intervene and stop the defendant from disposing off the charged property pending the outcome of the arbitration before the tribunal, they are certain to suffer egregiously and their right to redeem the property shall be permanently foreclosed. The applicant therefore seeks an opportunity to have the arbitration proceedings determined in order to redeem the charges, in the hope that the claim of 150,000,000 against Rubis Energy Kenya PLC would succeed.
8. In opposition to the application, the Defendant/Respondent filed grounds of opposition and Replying affidavit both dated 24th January 2025 contending that the applicant approached the respondent for a credit facility of Ksh 25,457,669 and offered their property as security. In addition to the charged property, the applicants gave personal Bank guarantees for the due performance of the loan in the event of default by Interfraan African Petrol Station Limited, a company in which the applicants are directors.
9. As circumstances would have it, the applicants defaulted in their obligations to pay the facility as and when it fell due and the respondent invoked and exercised its statutory power of sale by issuing requisite statutory notices requiring the regularization by payment of the arrears failure to which the respondent would realise the security to recover the amount outstanding. The respondent contends that the applicant neither disputes the validity of the notices issued nor the amount due in arrears and that unless sufficient grounds are demonstrated, the court should not accede to the applicant request for intervention. In any event, the respondent contends that there is admission of default on the part of the applicant and to request the court to intervene whereas the respondent has observed the law and procedure is akin to rewriting the agreement reached by the parties as opposed to enforcing it without evidence of fraud or illegality.
10. The respondent aver that it is not a party to the pending arbitration between the applicants Company and Rubis Energy Limited and that the agreement between them is independent of the agreement involving the respondent and the applicant. That pegging the issuance of interim orders on the existence of litigations between the applicants and third parties is strange to the law and that there is no guarantee that the arbitration proceedings will be resolved in the applicant’s favour. The respondent argues that section 103 of the Land Act cannot be read in isolation from section 90 of the Land Act which equally provides remedies for a chargee in the event of default by chargor. That despite the fact that the applicants are in default a fact not in dispute, they have not taken any steps to remedy the default nor challenged the validity of the Statutory Notices issued.
11. Mr Echesa, Counsel for the applicant in his oral and written submissions mainly urges the court to grant the applicants reliefs pursuant to section 104 (2) (b) albeit for a limited period of seven months from the date of such order to avert the sale of the applicant’s property. That the default by the applicant to service the loan facility was not wilful but arose out of breach of agreement by Rubis Energy to supply petroleum products to its company thus depriving it of business and compromising its ability to pay the facility advanced.
12. Counsel submit that the main reason the chargor seeks the extension of time within which to pay the amount owed, is to allow the conclusion of the arbitration proceeding and once that is done, and depending on the outcome, there shall be compliance and payment of the loan facilities. Further that if the outcome of the arbitration proceedings is successful, then the applicant will fully redeem the charge and if not, then the company shall be able to obtain another franchise to enable it resume the retail business.
13. The Respondent submit that the relationship between the parties is governed by the duly executed contractual instruments whose terms are clear, lawful and binding. That the parties freely negotiated and executed the agreement, which comprehensively set out the respective rights and obligations of each party. The respondent further submit that it was an express term of the agreement that in the event of default by the plaintiffs in servicing the facility, the defendant would be entitled to take all lawful steps necessary to protect its interest including realization of the charged securities.
14. It is submitted that the defendant is a financial institution entrusted with depositors’ funds, which are advanced to borrowers on agreed terms and are payable within specified timeless and that defendant bears fiduciary and statutory obligations to safeguard those funds and ensure that they are neither lost nor dissipated through borrowers’ default.
15. It is urged that the applicants have not established any valid grounds to warrant the issuance of injunctive orders sought as there has been no infringement of any right owed to the applicants, instead the applicants are in breach and defaulted in servicing the loan advanced to them. The Case of Mrao Ltd vs First American Bank of Kenya Ltd & 2 others is cited where the court stated as follows;
“I have always understood that it is the duty of any person entering into a commercial transaction particularly one in which a large amount of money is involved to obtain the best possible legal advice so that he can better understand his obligations under the documents to which he appends his signature or seal. If courts are going to allow debtors to avoid paying their just debts by taking some of the defences I have seen in recent times for instance challenging contractual interest rates, banks will be crippled if not driven out of business altogether and no serious investors will bring their capital into a country whose courts are a haven of defaulters. I agree entirely with the commissioner of Assize Shah that the Appellant was not entitled to an injunction upon any one of the grounds urged on its behalf.”
16. The respondent submit that it is not correct for the applicant to attribute default to contractual arrangement with a third party as the same was not part of, nor incorporated into the contractual terms governing the facility between the applicants and the respondent. As regards the reliefs under section 103 and 104 of the Land Act, the respondent submits that the same is not automatic nor available as of right. It is equitable and discretionary in nature and is granted only in appropriate circumstances where sufficient cause has been demonstrated.
ANALYSIS AND DETERMINATION.
17. I have considered the applicants application and the supporting affidavit as well as the respondent’s grounds of opposition together with the replying affidavit. Counsel for both parties also filed respective submissions and supplied authorities which were highlighted in brief.
18. Although the application is premised on the provisions of Order 40 rule 1, 2, Rule 3, 4(1) & Rule 51 of the civil procedure rules, the reliefs sought are mainly hinged on section 103 (1) (a) and 104 (2) (b) of the Land Act 2012 and elaborated in the applicant’s submissions both oral and written.
19. The issue therefore in my view for the court’s consideration is whether the applicants have in the circumstances of this case met the threshold for grant of relief under section 103 and 104 of the Land Act.
20. Section 103(1) of the Land Act in the pertinent part provides; “ an application for relief against the exercise by the Chargee of any of the remedies referred to in Section 90 (3) may be made by, a Chargor at any time after the service of the notice under section 90 (1) and 91 (2), section 94 (1), and 95 (1) or during the exercise of any of the remedies contemplated in those sections”.
21. These provisions of the law avail an opportunity to the borrower to approach the court for reliefs contemplated in section 90 of the Land Act including a stay of the intended sale by the chargee.
22. In the instant case, it is not in dispute that the defendant/chargee had put in motion the process of exercising one of the remedies provided for, that is the sale of the applicant’s property by issuance of the statutory notices. There is no denying that statutory notices were duly issued and served in accordance with the law. The applicants too do not deny that they are in default. What they are asking is indulgence by the court to allow them pursue a pending claim before the arbitration tribunal which they are hopeful would be successful. the optimism by the applicants is on the basis that the third party is in breach of the agreement to supply petroleum product.
23. Section 104 of the Land Act provides considerations that the court should bear in mind in deciding whether or not to grant relief to the chargor.
24. Section 104, which the Applicant heavily relied on in relevant part provides;
“(1) In considering whether to grant relief as applied for, a court—
a. shall, have regard to whether the remedy which the chargee proposes to exercise is reasonably necessary to prevent any or any further reduction in the value of the charged land or to reverse any such reduction as has already occurred if the charged land consists of agricultural land or commercial premises, and the remedy proposed is to appoint a receiver, or to take possession of or lease the land or a part thereof;
b. shall where the charged land consists of or includes a dwelling house, and the remedy proposed is to appoint a receiver, or take possession or lease the dwelling house or a part of it, have regard to the effect that the appointment of a receiver or the taking of possession or leasing the whole or a part of the dwelling house would have on the occupation of the dwelling house by the chargor and dependants and if the effect would be to impose undue disturbance on those owners, whether it is satisfied that;
(2) A court may refuse to grant an order under subsection (1) or may grant any relief against the operation of a remedy that the circumstances of the case require and without limiting the generality of those powers, may—
b Extend the period of time for compliance by the chargor with a notice served under section 90…
25. From the above it is clear that a borrower can apply for relief, when the chargee seeks to exercise its statutory power of sale. The rules do not set out the principles that a court should apply before granting relief. There is no doubt however that a chargor who alleges breaches of covenant, or who contend that a sale should not proceed because of irregularities in the process leading to the sale, may be entitled to relief.
26. However, in this case, the plaintiffs/applicants do not allege any breaches of covenant, and neither do they claim that the Bank is not entitled to exercise its statutory power of sale. Indeed, default is admitted. What plaintiffs/applicants seeks, is that pursuant to the provisions of Section 103 and 104 of the Land Act, 2012, they are entitled to an extension of time within which to comply and make good the default.
27. The applicant believes that the extension of time if granted would offer an opportunity for them to conclude the claim against Rubis Energy now pending determination before the arbitrator and in which they are hopeful would be resolved in their favour.
28. Firstly, there is no telling when the dispute between the applicant and Rubis Energy Limited would be concluded and whether such determination would be in the applicant’s favour. This is because the respondent had raised a counterclaim against the applicants claim. Secondly, the dispute could go either way and it is not in the province of this court to engage in speculations on a matter not before it.
29. Thirdly, even where the arbitration proceedings are finally determined one way or the other, an aggrieved party is at liberty to challenge the outcome in an appropriate forum. To stop the respondent from exercising its statutory power of sale pending resolution of a dispute outside the control of this court and whose outcome is speculative in nature is clearly not the intention contemplated by section 103 and 104 of the Land Act. The law contemplates a situation where the borrower presents a clear and realistic plan for payment of the amount owed for instance disposing of another property to pay the loan or offer a viable restructuring of the debt. In the instant case, the applicants have not come up with a concrete proposal on how they intend to settle the amount due. I also note that vide letter dated 23rd April 2024, Interfraan African Petrol Station Ltd in which the applicants are directors, had informed the defendant of a land valued 20,000,000 that had been put up for sale. There has not been any mention of the said proposal and/or what became of it.
30. My finding therefore is that the applicants have not met the threshold for grant of equitable relief under section 104 (2) (b) of the Land Act.
31. This finding notwithstanding, I am alive to the applicant’s contention that the default which was readily admitted, was as a result of alleged acts or omissions of a third party whose conduct substantially affected the applicant’s business. The effect of the third-party actions against the applicant meant that the applicant could not continue with the dealership agreement they had, nor enter into a new arrangement with others until the dispute is resolved.
32. Consequently, I make the following order;
1 THAT In exercise of the jurisdiction under section 104 (2) (b) of the Land Act ,2012 an Order is Hereby issued extending the period within which the plaintiffs have to redeem the charges over LOITOKITOK/OLKARIA/245, LOITOKITOK/ROMBO A/322, LKT/NGAMA/2562 AND LOITOKITOK/EMPERON/2674 respective charges, statutory Notices dated 29th December 2023 and Notification of Sale dated 26th July 2024 respectively for a period of Seven months from the date of the Order.
2 THAT after the expiry of the Seven months, the Respondents shall be at liberty to proceed and realize the charged securities.
3 THAT there shall be no order as to cost.