1. The Objector filed a Notice of Motion application dated 10th July 2025 under Certificate of Urgency pursuant to Order 22 Rules 51 (1) & (2) and 52, Order 40 Rule 1 (a) and Order 51 Rule 1 & 3 of the Civil Procedure Rules 2010, Section 1A & 3A of the Civil Procedure Act, and all the enabling provisions of the law.
2. The Objector seeks for the following orders: -
1. Spent
2. Spent
3. THAT this Honourable Court do set aside the Notice of Proclamation of Sale of Movable Property No. 446 dated 8th July 2025 issued by Leonard Mwangi T/A Ndutumi Auctioneers.
4. THAT this Honourable Court be pleased to lift the Warrants of Attachment and Sale issued on 3rd July 2025.
5. THAT the costs of this Application be awarded to the Objector.
3. The application is supported by the annexed affidavit of Shahame Aziz Mwidani and grounds that the Objector sought the lifting of the proclamation dated 8th July 2025 as the attached properties belong to the Objector and not the Respondents against whom the decree was issued. The Objector stated that the Advocate could not execute against its property to satisfy a decree issued against separate parties, as it was neither a party to the proceedings nor aware of the dispute between the Advocate and the Respondents.
4. It maintained that the Respondents had no legal or equitable interest in the proclaimed property and that the proclamation was therefore irregular, misconceived, and unlawful. The Objector further stated that the Auctioneer never visited its premises to conduct the proclamation and alleged that the Advocate intended to take custody of its property. The Objector therefore urged the court to raise the proclamation and attachment to prevent it from suffering prejudice.
5. The Advocate in opposition to the application filed a Replying Affidavit sworn on 28th July 2025 contending that it was a scheme orchestrated by the 2nd Judgment Debtor, Osman Erdinc Elsek, in collusion with the Objector to evade satisfaction of the decree. The Advocate stated that the Objector forms part of the Elsek Group of Companies, all of which are controlled by the 2nd Judgment Debtor, who is said to be the beneficial owner, controlling director, and ‘controlling mind’ of the Objector.
6. The Advocate deposed that the Objector is not independent of the Judgment Debtors but is merely an alter ego, nominee, or instrument through which the 2nd Judgment Debtor conducts business and conceals assets. He maintained that Shahame Aziz Mwidani, who swore the Objector’s supporting affidavit, was the recognized agent and finance manager for the entire Elsek Group, including the Objector, demonstrating the close relationship between the companies and the Judgment Debtors.
7. Regarding the proclaimed motor vehicle registration No. KDQ 323T, the Advocate stated that it was purchased by the 2nd Judgment Debtor using funds generated through businesses operated in the Objector’s name. After the vehicle was proclaimed on 23rd June 2025, it was allegedly transferred to the Objector without consideration in an attempt to shield it from execution. The Advocate deposed that the vehicle remained under the control and use of the 2nd Judgment Debtor even after the transfer and that the transfer was fraudulent and intended to defeat execution.
8. The Advocate further alleged that the 2nd Judgment Debtor routinely acquires assets through various companies within the Elsek Group, including the Objector, and uses them interchangeably without observing corporate formalities. He claimed that there was extensive commingling of assets, funds, employees, liabilities, and business operations among the companies and the 2nd Judgment Debtor personally. According to the Advocate, the 2nd Judgment Debtor freely uses the Objector’s assets and accounts for personal purposes, treats company property as his own, and ignores requirements relating to meetings, resolutions, and corporate governance.
9. The Advocate therefore deposed that the Objector’s separate legal personality is a façade and that the corporate veil should be lifted because the company is being used to conceal assets and frustrate execution. He stated that the Objector holds assets in trust for the benefit of the 2nd Judgment Debtor and that there exists such unity of ownership and interest between them that they should be treated as one entity. He also invoked principles of constructive trust and equity, asserting that the court should disregard the corporate veil to prevent injustice and ensure that the decree is not rendered unenforceable.
10. In conclusion, the Advocate maintained that the Objector has failed to prove legal and beneficial ownership of the proclaimed goods, has made material non-disclosures and false statements, and has approached the court with unclean hands. He therefore urged the court to dismiss the Objector’s application with costs and allow execution to proceed against the proclaimed property.
11. In a Further Supporting Affidavit sworn on 18th August 2025, Shahame Aziz Mwidani, on behalf of the Objector, refuted the Advocate’s allegations and maintained that the Objector is the legal owner of the proclaimed property and a separate corporate entity with no connection to the dispute between the Advocate and the Respondents. The Objector deposed that it is a distinct legal person capable of owning property and conducting business independently, and that the Advocate had failed to produce evidence linking it to the Respondents or establishing that they operated as a single entity.
12. The Objector stated that the Advocate’s assertions amounted to an indirect attempt to lift the corporate veil without filing a proper application or presenting sufficient evidence. It denied being part of any ‘Elsek Group of Companies’ and challenged the Advocate to prove the existence of such a conglomerate. It further denied any transfer, commingling, or movement of assets and funds between itself and the Respondents, describing the allegations as speculative, unsupported, and lacking documentary proof.
13. The Objector maintained that it and the Respondents are separate companies incorporated at different times, conducting different businesses, with neither being a subsidiary or holding company of the other. It emphasized that the existence of common directors does not, in law, merge companies into a single legal or economic entity, nor does it justify execution against one company for the liabilities of another.
14. The Objector also denied acting as an agent of the Respondents and stated that its participation in matters involving the Respondents did not establish any legal or economic unity between them. It further pointed out that the Advocate’s own documents showed that the 1st Respondent owned a separate property, Kilifi/Mtwapa/867, against which execution could have been pursued. The Objector therefore questioned why the Advocate chose to execute against its assets instead of the Respondents’ property.
15. In conclusion, the Objector maintained that its property cannot lawfully be attached or sold to satisfy a debt it did not incur and urged the court to reject the Advocate’s allegations and uphold its separate corporate identity.
16. The application was canvassed by way of written submissions. The Objector filed submissions dated 27th August 2025 and contended that the court is constitutionally obligated to protect and enforce fundamental rights and freedoms under the Bill of Rights, and to interpret the Constitution in a manner that promotes its values, the rule of law, human rights, and good governance pursuant to Articles 24 and 259 of the Constitution. It argued that the warrants of attachment and proclamation were irregular, unlawful, and maliciously executed against its property without affording it a hearing, thereby violating its right to a fair hearing under Article 50 of the Constitution.
17. The Objector maintained that it is a separate legal entity distinct from the Respondents and relied on Salomon v Salomon (1897) AC 78, as approved in Joseph Kobia Nguthari v Kiegoi Tea Factory Company Limited & 2 others (2016) eKLR, to emphasize the principle of corporate personality. It contended that the attached motor vehicle registration No. KDQ 323T and the premises where the proclamation occurred belonged to the Objector, and therefore the Advocate had no legal basis to attach or sell its assets in satisfaction of a decree issued against the Respondents.
18. The Objector further argued that the Advocate knew as early as 24th June 2025 that the motor vehicle belonged to the Objector but nevertheless proceeded with its proclamation on 8th July 2025. It accused the Advocate of acting in bad faith and with malice by failing to disclose this information to the Auctioneer and by seeking to execute against property not owned by the judgment debtors.
19. Relying on Article 40 of the Constitution, the Objector asserted its right to own and enjoy property free from unlawful interference. It also submitted that the execution process contravened Rules 12 and 14 of the Auctioneers Rules and Section 44(1) of the Civil Procedure Act, arguing that the Respondents had no legal or beneficial interest or disposing power over the attached assets, which were exclusively owned by the Objector.
20. The Objector contended that the Advocate’s case was premised on an allegation that the Objector was a sham entity, yet no application had been made to lift or pierce the corporate veil before execution commenced. Citing Riccatti Business College of East Africa Limited v Kyanzavi Farmers Company Limited (2016) eKLR and Ukwala Supermarket v Jaideep Shah & another (2022) eKLR, it argued that the strict requirements for lifting the corporate veil had not been met. It maintained that it operates an independent business, as demonstrated by its lease agreement, and that common directorship or business interests with the Respondents were insufficient grounds for disregarding its separate legal personality.
21. The Objector denied engaging in fraud, tax evasion, wrongful trading, undercapitalization, or any other conduct that would justify lifting the corporate veil. It stated that it had no knowledge of the dispute between the Advocate and the Respondents and would suffer substantial prejudice if its property were sold to satisfy debts for which it bore no liability. Consequently, it urged the court to find that the proclamation and attachment were illegal, irregular, misconceived, and unlawful.
22. The Advocate in their submissions dated 10th November 2025 argued that the 2nd Judgment Debtor, Osman Erdinc Elsek, uses the Objector company as a vehicle for holding and concealing his personal assets and business interests in order to evade creditors and frustrate execution of court decrees. The Advocate alleged that on 17th June 2025, the 2nd Judgment Debtor acquired motor vehicle registration No. KDQ 323T (Toyota Land Cruiser V8) using income generated through businesses operated in the Objector’s name, although the vehicle was initially registered in his personal name.
23. When auctioneers traced and proclaimed the vehicle on 23rd June 2025 at the 2nd Judgment Debtor’s premises at Kilifi Pearl Beach Resort, the vehicle was allegedly transferred to the Objector on the same day without consideration in an effort to place it beyond the reach of execution. The Advocate maintained that despite the transfer, the 2nd Judgment Debtor retained possession, use, and beneficial ownership of the vehicle, which was later seized by auctioneers and released following settlement of the decree by the Objector.
24. The Advocate further asserted that the 2nd Judgment Debtor has accumulated funds and assets through various companies, including Elsek & Elsek Construction Limited, and has registered or concealed them in the name of the Objector. According to the Advocate, these resources have been used to acquire assets, secure credit facilities, operate businesses such as Kilifi Pearl Beach Resort, and finance the 2nd Judgment Debtor’s personal lifestyle.
25. It is further alleged that the 2nd Judgment Debtor disregards corporate formalities, exercises unrestricted control over the Objector’s finances and assets, and freely transfers funds between himself and the company without proper records, resolutions, or governance procedures. The Advocate claimed there was extensive commingling of funds and assets between the 2nd Judgment Debtor and the Objector, including deposits and withdrawals through personal accounts and mobile money platforms.
26. On this basis, the Advocate argued that the Objector lacks genuine independence and exists merely as the alter ego, nominee, trustee, or instrument of the 2nd Judgment Debtor. He submitted that there is such a unity of ownership, control, and interest between them that the company’s separate legal personality should be disregarded. The Advocate characterized the Objector as a sham entity created to shield assets from creditors and avoid liability.
27. Relying on principles of equity and constructive trust, the Advocate argued that assets registered in the Objector’s name are in reality beneficially owned by the 2nd Judgment Debtor and should be available for execution. He therefore urges the court to lift or sidestep the corporate veil, treat the Objector and the Judgment Debtors as jointly liable, and permit execution against the proclaimed assets, including motor vehicles KDQ 323T and KDC 038E.
28. In conclusion, the Advocate contended that the Objector has failed to prove legal and beneficial ownership of the attached assets, has concealed material facts, and has approached the court with unclean hands. He therefore asked the court to dismiss the Objector’s application with costs and allow the decree-holder to realize the fruits of the judgment.
Submissions
29. Having considered the Notice of Motion application dated 10th July 2025, the Replying Affidavit sworn on 28th July 2025, the Further Supporting Affidavit sworn on 18th August 2025, and submissions, the issues for determination are: -
(a) Whether the Objector has established a legal or equitable interest in the attached property sufficient to warrant the lifting of the attachment and proclamation
(b) What orders on costs should issue
30. The law governing objector proceedings is found in Order 22 Rule 51 of the Civil Procedure Rules. The burden rests upon the Objector to demonstrate, on a balance of probabilities, that at the date of attachment it had a legal or equitable interest in the attached property. In Precast Portal Structures v Kenya Pencil Company Ltd & 2 others [1993] KEHC 100 (KLR), the court held that: -
“The objector must adduce evidence to show that at the date of the attachment he had a legal or equitable interest in the property. For this purpose, he may raise an objection on the ground, inter alia, that he has some beneficial interest in the property. A beneficial interest is as much an interest within the meaning of the Rules as a legal interest in the property attached …
The burden is on the objector to prove and establish his right to have the attached property released from the attachment.”
31. The Objector contends that motor vehicle registration No. KDQ 323T and the other proclaimed assets belong to it and not to the Respondents. It relies on the doctrine of separate corporate personality as established in Salomon v Salomon [1897] AC 78 and reiterated in Joseph Kobia Nguthari v Kiegoi Tea Factory Company Limited & 2 others (2016) eKLR. The principle is that a company is a distinct legal entity separate from its shareholders and directors and is capable of owning property in its own name.
32. This court agrees that separate corporate personality remains a cardinal principle of company law. However, that principle is not absolute. Courts will disregard the corporate veil where it is shown that the company is being used as a facade to conceal the true facts, perpetrate fraud, evade legal obligations or defeat the ends of justice. The Court of Appeal in Riccatti Business College of East Africa Limited v Kyanzavi Farmers Company Limited [2016] KECA 763 (KLR) affirmed that: -
“The Court may lift the corporate veil in exercising its inherent jurisdiction to do justice and fairness for the ends of justice. This jurisdiction may be exercised only in special circumstances where the Court finds improper conduct, fraud or when a company is a sham, acting as an agent of the shareholders or evading tax revenues.”
33. In Ukwala Supermarket v Jaideep Shah & another [2022] KEHC 2207 (KLR), the court emphasized that: -
“In Kenya, courts have a strong presumption against piercing the corporate veil, and will only do so if there has been serious misconduct or if the Company, shareholders or directors who are asserted to be the Company’s alter egos have acted in fairly egregious manner. This is because Courts understand the benefits of limited liability as expressed in the statute.
The corporate persona of a company will be dispensed with in cases where it is apparent that the company is being used as ‘A creature of [the controlling director], a device and a sham, a mask which he holds before his face in an attempt to avoid recognition by the eye of equity.’”
34. In the present case, the Advocate has placed before the court detailed allegations that the 2nd Judgment Debtor exercises complete control over the Objector, treats its assets as his own, commingles company and personal assets, disregards corporate formalities, and transferred motor vehicle KDQ 323T to the Objector immediately after proclamation in order to defeat execution.
35. Significantly, the material before the court shows that the motor vehicle was initially registered in the personal name of the 2nd Judgment Debtor and was only transferred to the Objector after proclamation had been undertaken. The timing of that transfer raises legitimate questions regarding its purpose and bona fides. Courts have consistently held that transfers effected after execution proceedings have commenced and intended to defeat creditors ought not to receive judicial protection.
36. While the Objector insists that the Advocate ought to have first filed a formal application seeking to pierce the corporate veil, this court is unable to agree. The court is entitled, in determining objector proceedings, to examine the substance of the transactions and relationships placed before it and determine whether the alleged ownership is genuine or merely a device intended to obstruct execution. Equity looks at substance rather than form.
37. This court further notes that apart from producing documents showing legal registration of some assets in its name, the Objector has not satisfactorily rebutted the allegations concerning the circumstances surrounding the transfer of motor vehicle KDQ 323T, the extensive control exercised by the 2nd Judgment Debtor, and the alleged unity of ownership and beneficial interest between the Judgment Debtor and the Objector.
38. This court is mindful that under Section 44 of the Civil Procedure Act, property liable to attachment includes property over which a judgment debtor has a disposing power exercisable for his own benefit. Beneficial ownership and actual control may therefore be relevant considerations even where legal title is vested in another entity.
39. Having considered the totality of the evidence, this court finds that the Objector has failed to discharge the burden of proving, on a balance of probabilities, that the attached assets are wholly independent of the 2nd Judgment Debtor and beyond the reach of execution. Conversely, the evidence presented by the Advocate establishes a prima facie basis for treating the Objector as an instrument through which the 2nd Judgment Debtor holds and controls assets intended to defeat lawful execution.
40. This court is persuaded that permitting the Objector to rely solely on the doctrine of separate corporate personality in the circumstances of this case would elevate form over substance and would aid the frustration of a valid court decree. Courts must guard against the misuse of the corporate form as an engine of fraud or injustice.
Determination
41. Accordingly, this court finds that the Objector has failed to establish a sufficient legal or equitable interest in the attached property capable of defeating the decree-holder's execution process with the following orders: -
(a) The Notice of Motion application dated 10th July 2025 is hereby dismissed.
(b) The Notice of Proclamation of Sale of Movable Property dated 8th July 2025 and the Warrants of Attachment and Sale issued on 3rd July 2025 are upheld.
(c) The decree-holder shall be at liberty to proceed with execution in accordance with the law.
(d) The costs of the application shall be borne by the Objector.
Dated and delivered virtually at Mombasa this 25th day of June, 2026
………………………..
HON. F. WANGARI
JUDGE OF THE HIGH COURT
In the presence of: -
N/A by the Advocate/ Respondent
Dr. Khaminwa Advocate for the Objector/ Applicant
Ms. Salwa, Court Assistant
2. The Objector seeks for the following orders: -
1. Spent
2. Spent
3. THAT this Honourable Court do set aside the Notice of Proclamation of Sale of Movable Property No. 446 dated 8th July 2025 issued by Leonard Mwangi T/A Ndutumi Auctioneers.
4. THAT this Honourable Court be pleased to lift the Warrants of Attachment and Sale issued on 3rd July 2025.
5. THAT the costs of this Application be awarded to the Objector.
3. The application is supported by the annexed affidavit of Shahame Aziz Mwidani and grounds that the Objector sought the lifting of the proclamation dated 8th July 2025 as the attached properties belong to the Objector and not the Respondents against whom the decree was issued. The Objector stated that the Advocate could not execute against its property to satisfy a decree issued against separate parties, as it was neither a party to the proceedings nor aware of the dispute between the Advocate and the Respondents.
4. It maintained that the Respondents had no legal or equitable interest in the proclaimed property and that the proclamation was therefore irregular, misconceived, and unlawful. The Objector further stated that the Auctioneer never visited its premises to conduct the proclamation and alleged that the Advocate intended to take custody of its property. The Objector therefore urged the court to raise the proclamation and attachment to prevent it from suffering prejudice.
5. The Advocate in opposition to the application filed a Replying Affidavit sworn on 28th July 2025 contending that it was a scheme orchestrated by the 2nd Judgment Debtor, Osman Erdinc Elsek, in collusion with the Objector to evade satisfaction of the decree. The Advocate stated that the Objector forms part of the Elsek Group of Companies, all of which are controlled by the 2nd Judgment Debtor, who is said to be the beneficial owner, controlling director, and ‘controlling mind’ of the Objector.
6. The Advocate deposed that the Objector is not independent of the Judgment Debtors but is merely an alter ego, nominee, or instrument through which the 2nd Judgment Debtor conducts business and conceals assets. He maintained that Shahame Aziz Mwidani, who swore the Objector’s supporting affidavit, was the recognized agent and finance manager for the entire Elsek Group, including the Objector, demonstrating the close relationship between the companies and the Judgment Debtors.
7. Regarding the proclaimed motor vehicle registration No. KDQ 323T, the Advocate stated that it was purchased by the 2nd Judgment Debtor using funds generated through businesses operated in the Objector’s name. After the vehicle was proclaimed on 23rd June 2025, it was allegedly transferred to the Objector without consideration in an attempt to shield it from execution. The Advocate deposed that the vehicle remained under the control and use of the 2nd Judgment Debtor even after the transfer and that the transfer was fraudulent and intended to defeat execution.
8. The Advocate further alleged that the 2nd Judgment Debtor routinely acquires assets through various companies within the Elsek Group, including the Objector, and uses them interchangeably without observing corporate formalities. He claimed that there was extensive commingling of assets, funds, employees, liabilities, and business operations among the companies and the 2nd Judgment Debtor personally. According to the Advocate, the 2nd Judgment Debtor freely uses the Objector’s assets and accounts for personal purposes, treats company property as his own, and ignores requirements relating to meetings, resolutions, and corporate governance.
9. The Advocate therefore deposed that the Objector’s separate legal personality is a façade and that the corporate veil should be lifted because the company is being used to conceal assets and frustrate execution. He stated that the Objector holds assets in trust for the benefit of the 2nd Judgment Debtor and that there exists such unity of ownership and interest between them that they should be treated as one entity. He also invoked principles of constructive trust and equity, asserting that the court should disregard the corporate veil to prevent injustice and ensure that the decree is not rendered unenforceable.
10. In conclusion, the Advocate maintained that the Objector has failed to prove legal and beneficial ownership of the proclaimed goods, has made material non-disclosures and false statements, and has approached the court with unclean hands. He therefore urged the court to dismiss the Objector’s application with costs and allow execution to proceed against the proclaimed property.
11. In a Further Supporting Affidavit sworn on 18th August 2025, Shahame Aziz Mwidani, on behalf of the Objector, refuted the Advocate’s allegations and maintained that the Objector is the legal owner of the proclaimed property and a separate corporate entity with no connection to the dispute between the Advocate and the Respondents. The Objector deposed that it is a distinct legal person capable of owning property and conducting business independently, and that the Advocate had failed to produce evidence linking it to the Respondents or establishing that they operated as a single entity.
12. The Objector stated that the Advocate’s assertions amounted to an indirect attempt to lift the corporate veil without filing a proper application or presenting sufficient evidence. It denied being part of any ‘Elsek Group of Companies’ and challenged the Advocate to prove the existence of such a conglomerate. It further denied any transfer, commingling, or movement of assets and funds between itself and the Respondents, describing the allegations as speculative, unsupported, and lacking documentary proof.
13. The Objector maintained that it and the Respondents are separate companies incorporated at different times, conducting different businesses, with neither being a subsidiary or holding company of the other. It emphasized that the existence of common directors does not, in law, merge companies into a single legal or economic entity, nor does it justify execution against one company for the liabilities of another.
14. The Objector also denied acting as an agent of the Respondents and stated that its participation in matters involving the Respondents did not establish any legal or economic unity between them. It further pointed out that the Advocate’s own documents showed that the 1st Respondent owned a separate property, Kilifi/Mtwapa/867, against which execution could have been pursued. The Objector therefore questioned why the Advocate chose to execute against its assets instead of the Respondents’ property.
15. In conclusion, the Objector maintained that its property cannot lawfully be attached or sold to satisfy a debt it did not incur and urged the court to reject the Advocate’s allegations and uphold its separate corporate identity.
16. The application was canvassed by way of written submissions. The Objector filed submissions dated 27th August 2025 and contended that the court is constitutionally obligated to protect and enforce fundamental rights and freedoms under the Bill of Rights, and to interpret the Constitution in a manner that promotes its values, the rule of law, human rights, and good governance pursuant to Articles 24 and 259 of the Constitution. It argued that the warrants of attachment and proclamation were irregular, unlawful, and maliciously executed against its property without affording it a hearing, thereby violating its right to a fair hearing under Article 50 of the Constitution.
17. The Objector maintained that it is a separate legal entity distinct from the Respondents and relied on Salomon v Salomon (1897) AC 78, as approved in Joseph Kobia Nguthari v Kiegoi Tea Factory Company Limited & 2 others (2016) eKLR, to emphasize the principle of corporate personality. It contended that the attached motor vehicle registration No. KDQ 323T and the premises where the proclamation occurred belonged to the Objector, and therefore the Advocate had no legal basis to attach or sell its assets in satisfaction of a decree issued against the Respondents.
18. The Objector further argued that the Advocate knew as early as 24th June 2025 that the motor vehicle belonged to the Objector but nevertheless proceeded with its proclamation on 8th July 2025. It accused the Advocate of acting in bad faith and with malice by failing to disclose this information to the Auctioneer and by seeking to execute against property not owned by the judgment debtors.
19. Relying on Article 40 of the Constitution, the Objector asserted its right to own and enjoy property free from unlawful interference. It also submitted that the execution process contravened Rules 12 and 14 of the Auctioneers Rules and Section 44(1) of the Civil Procedure Act, arguing that the Respondents had no legal or beneficial interest or disposing power over the attached assets, which were exclusively owned by the Objector.
20. The Objector contended that the Advocate’s case was premised on an allegation that the Objector was a sham entity, yet no application had been made to lift or pierce the corporate veil before execution commenced. Citing Riccatti Business College of East Africa Limited v Kyanzavi Farmers Company Limited (2016) eKLR and Ukwala Supermarket v Jaideep Shah & another (2022) eKLR, it argued that the strict requirements for lifting the corporate veil had not been met. It maintained that it operates an independent business, as demonstrated by its lease agreement, and that common directorship or business interests with the Respondents were insufficient grounds for disregarding its separate legal personality.
21. The Objector denied engaging in fraud, tax evasion, wrongful trading, undercapitalization, or any other conduct that would justify lifting the corporate veil. It stated that it had no knowledge of the dispute between the Advocate and the Respondents and would suffer substantial prejudice if its property were sold to satisfy debts for which it bore no liability. Consequently, it urged the court to find that the proclamation and attachment were illegal, irregular, misconceived, and unlawful.
22. The Advocate in their submissions dated 10th November 2025 argued that the 2nd Judgment Debtor, Osman Erdinc Elsek, uses the Objector company as a vehicle for holding and concealing his personal assets and business interests in order to evade creditors and frustrate execution of court decrees. The Advocate alleged that on 17th June 2025, the 2nd Judgment Debtor acquired motor vehicle registration No. KDQ 323T (Toyota Land Cruiser V8) using income generated through businesses operated in the Objector’s name, although the vehicle was initially registered in his personal name.
23. When auctioneers traced and proclaimed the vehicle on 23rd June 2025 at the 2nd Judgment Debtor’s premises at Kilifi Pearl Beach Resort, the vehicle was allegedly transferred to the Objector on the same day without consideration in an effort to place it beyond the reach of execution. The Advocate maintained that despite the transfer, the 2nd Judgment Debtor retained possession, use, and beneficial ownership of the vehicle, which was later seized by auctioneers and released following settlement of the decree by the Objector.
24. The Advocate further asserted that the 2nd Judgment Debtor has accumulated funds and assets through various companies, including Elsek & Elsek Construction Limited, and has registered or concealed them in the name of the Objector. According to the Advocate, these resources have been used to acquire assets, secure credit facilities, operate businesses such as Kilifi Pearl Beach Resort, and finance the 2nd Judgment Debtor’s personal lifestyle.
25. It is further alleged that the 2nd Judgment Debtor disregards corporate formalities, exercises unrestricted control over the Objector’s finances and assets, and freely transfers funds between himself and the company without proper records, resolutions, or governance procedures. The Advocate claimed there was extensive commingling of funds and assets between the 2nd Judgment Debtor and the Objector, including deposits and withdrawals through personal accounts and mobile money platforms.
26. On this basis, the Advocate argued that the Objector lacks genuine independence and exists merely as the alter ego, nominee, trustee, or instrument of the 2nd Judgment Debtor. He submitted that there is such a unity of ownership, control, and interest between them that the company’s separate legal personality should be disregarded. The Advocate characterized the Objector as a sham entity created to shield assets from creditors and avoid liability.
27. Relying on principles of equity and constructive trust, the Advocate argued that assets registered in the Objector’s name are in reality beneficially owned by the 2nd Judgment Debtor and should be available for execution. He therefore urges the court to lift or sidestep the corporate veil, treat the Objector and the Judgment Debtors as jointly liable, and permit execution against the proclaimed assets, including motor vehicles KDQ 323T and KDC 038E.
28. In conclusion, the Advocate contended that the Objector has failed to prove legal and beneficial ownership of the attached assets, has concealed material facts, and has approached the court with unclean hands. He therefore asked the court to dismiss the Objector’s application with costs and allow the decree-holder to realize the fruits of the judgment.
Submissions
29. Having considered the Notice of Motion application dated 10th July 2025, the Replying Affidavit sworn on 28th July 2025, the Further Supporting Affidavit sworn on 18th August 2025, and submissions, the issues for determination are: -
(a) Whether the Objector has established a legal or equitable interest in the attached property sufficient to warrant the lifting of the attachment and proclamation
(b) What orders on costs should issue
30. The law governing objector proceedings is found in Order 22 Rule 51 of the Civil Procedure Rules. The burden rests upon the Objector to demonstrate, on a balance of probabilities, that at the date of attachment it had a legal or equitable interest in the attached property. In Precast Portal Structures v Kenya Pencil Company Ltd & 2 others [1993] KEHC 100 (KLR), the court held that: -
“The objector must adduce evidence to show that at the date of the attachment he had a legal or equitable interest in the property. For this purpose, he may raise an objection on the ground, inter alia, that he has some beneficial interest in the property. A beneficial interest is as much an interest within the meaning of the Rules as a legal interest in the property attached …
The burden is on the objector to prove and establish his right to have the attached property released from the attachment.”
31. The Objector contends that motor vehicle registration No. KDQ 323T and the other proclaimed assets belong to it and not to the Respondents. It relies on the doctrine of separate corporate personality as established in Salomon v Salomon [1897] AC 78 and reiterated in Joseph Kobia Nguthari v Kiegoi Tea Factory Company Limited & 2 others (2016) eKLR. The principle is that a company is a distinct legal entity separate from its shareholders and directors and is capable of owning property in its own name.
32. This court agrees that separate corporate personality remains a cardinal principle of company law. However, that principle is not absolute. Courts will disregard the corporate veil where it is shown that the company is being used as a facade to conceal the true facts, perpetrate fraud, evade legal obligations or defeat the ends of justice. The Court of Appeal in Riccatti Business College of East Africa Limited v Kyanzavi Farmers Company Limited [2016] KECA 763 (KLR) affirmed that: -
“The Court may lift the corporate veil in exercising its inherent jurisdiction to do justice and fairness for the ends of justice. This jurisdiction may be exercised only in special circumstances where the Court finds improper conduct, fraud or when a company is a sham, acting as an agent of the shareholders or evading tax revenues.”
33. In Ukwala Supermarket v Jaideep Shah & another [2022] KEHC 2207 (KLR), the court emphasized that: -
“In Kenya, courts have a strong presumption against piercing the corporate veil, and will only do so if there has been serious misconduct or if the Company, shareholders or directors who are asserted to be the Company’s alter egos have acted in fairly egregious manner. This is because Courts understand the benefits of limited liability as expressed in the statute.
The corporate persona of a company will be dispensed with in cases where it is apparent that the company is being used as ‘A creature of [the controlling director], a device and a sham, a mask which he holds before his face in an attempt to avoid recognition by the eye of equity.’”
34. In the present case, the Advocate has placed before the court detailed allegations that the 2nd Judgment Debtor exercises complete control over the Objector, treats its assets as his own, commingles company and personal assets, disregards corporate formalities, and transferred motor vehicle KDQ 323T to the Objector immediately after proclamation in order to defeat execution.
35. Significantly, the material before the court shows that the motor vehicle was initially registered in the personal name of the 2nd Judgment Debtor and was only transferred to the Objector after proclamation had been undertaken. The timing of that transfer raises legitimate questions regarding its purpose and bona fides. Courts have consistently held that transfers effected after execution proceedings have commenced and intended to defeat creditors ought not to receive judicial protection.
36. While the Objector insists that the Advocate ought to have first filed a formal application seeking to pierce the corporate veil, this court is unable to agree. The court is entitled, in determining objector proceedings, to examine the substance of the transactions and relationships placed before it and determine whether the alleged ownership is genuine or merely a device intended to obstruct execution. Equity looks at substance rather than form.
37. This court further notes that apart from producing documents showing legal registration of some assets in its name, the Objector has not satisfactorily rebutted the allegations concerning the circumstances surrounding the transfer of motor vehicle KDQ 323T, the extensive control exercised by the 2nd Judgment Debtor, and the alleged unity of ownership and beneficial interest between the Judgment Debtor and the Objector.
38. This court is mindful that under Section 44 of the Civil Procedure Act, property liable to attachment includes property over which a judgment debtor has a disposing power exercisable for his own benefit. Beneficial ownership and actual control may therefore be relevant considerations even where legal title is vested in another entity.
39. Having considered the totality of the evidence, this court finds that the Objector has failed to discharge the burden of proving, on a balance of probabilities, that the attached assets are wholly independent of the 2nd Judgment Debtor and beyond the reach of execution. Conversely, the evidence presented by the Advocate establishes a prima facie basis for treating the Objector as an instrument through which the 2nd Judgment Debtor holds and controls assets intended to defeat lawful execution.
40. This court is persuaded that permitting the Objector to rely solely on the doctrine of separate corporate personality in the circumstances of this case would elevate form over substance and would aid the frustration of a valid court decree. Courts must guard against the misuse of the corporate form as an engine of fraud or injustice.
Determination
41. Accordingly, this court finds that the Objector has failed to establish a sufficient legal or equitable interest in the attached property capable of defeating the decree-holder's execution process with the following orders: -
(a) The Notice of Motion application dated 10th July 2025 is hereby dismissed.
(b) The Notice of Proclamation of Sale of Movable Property dated 8th July 2025 and the Warrants of Attachment and Sale issued on 3rd July 2025 are upheld.
(c) The decree-holder shall be at liberty to proceed with execution in accordance with the law.
(d) The costs of the application shall be borne by the Objector.
Dated and delivered virtually at Mombasa this 25th day of June, 2026
………………………..
HON. F. WANGARI
JUDGE OF THE HIGH COURT
In the presence of: -
N/A by the Advocate/ Respondent
Dr. Khaminwa Advocate for the Objector/ Applicant
Ms. Salwa, Court Assistant