1. Before me is a Notice of Motion application dated 19th December 2024 filed by the plaintiffs under the provisions of Sections 1A, 1B & 3A of the Civil Procedure Act, Order 40 Rules 1, 2, 3 & 4 and Order 51 of the Civil Procedure Rules, 2010, Section 96(3)(d) & (h) of the Land Act, 2012, Rules 3(2) of The High Court (Practice and Procedure) Rules No. 1356 of 1952, and all other enabling provisions of the law. The plaintiffs pray for an order of temporary injunction restraining the 1st & 2nd defendants, their agents, or anyone acting under their authority from selling, disposing of, leasing, entering, or otherwise interfering with the plaintiffs’ quiet possession of all that property on Nairobi L.R. No. 209/9278 (Industrial Area) pending the hearing and determination of the suit.
2. The 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 Mr. Issack Abdikadir, the 1st plaintiff herein. Mr. Abdikadir averred that between 2023 & 2024, each of the plaintiffs entered into separate Lease Agreements with the 1st defendant, being the Landlord of all that property known as Nairobi L.R. No. 209/9278, situated in Industrial Area, Nairobi County. He stated that the 1st plaintiff leased part of the premises on 15th August 2023 for a three (3) year term at a monthly rent of Kshs.300,000/= to operate a transport business, the 2nd plaintiff leased a section of the said premises on 15th February 2024 for one (1) year at Kshs.140,000/= per month for use as a storage godown for export of frankincense and gum, the 3rd plaintiff leased another portion on 1st August 2024 for one (1) year at Kshs.100,000/= per month to operate an MDF furniture business, while the 4th plaintiff leased a section on 1st January 2024 for one (1) year at Kshs.100,000/= per month for use as a motor vehicle garage known as Wembleys Motor Masters.
3. Mr. Abdikadir deposed that the said Leases were duly executed, rent was paid quarterly through the 1st defendant’s agent, Aquva Agencies Limited and that the plaintiffs have since enjoyed quiet possession of their respective premises. He stated that without any prior Notice or communication, they were shocked to learn through a Newspaper Advertisement dated 29th August 2024 that Dalali Traders Auctioneers, acting on the instructions of the 2nd defendant, intended to sell the entire suit property by public auction. He asserted that the plaintiffs were unaware of the 2nd defendant’s interest in the suit property and the 1st defendant had not issued any Termination Notices to enable them to relocate. He averred that the 2nd defendant neither served the plaintiffs with the mandatory forty-day Statutory Notice under Section 96(3)(d) & (h) of the Land Act, 2012, nor did it pin Notices under the said provisions, at the premises as required by law.
4. Mr. Abdikadir deposed that the plaintiffs fear that the intended sale, if allowed to proceed, will gravely violate their constitutional rights to property and access to information under Articles 35(1)(b) & 40 of the Constitution, disrupt their businesses and expose them to financial losses since rent already paid for the current quarter remains unutilized. He also expressed apprehension that the advertisement has caused panic among their customers and suppliers, affecting their business operations and reputation. Mr. Abdikadir averred that if the intended auction proceeds, their livelihoods and those of their employees will be jeopardized, as they will be forced to vacate the premises abruptly without sufficient time to secure alternative premises.
5. In opposition to the application, the 2nd defendant filed a replying affidavit sworn on 8th January 2025 by Ms Faith Ndonga, the 2nd defendant’s Legal Manager in the Debt Recovery Department. Ms Ndonga confirmed that the 1st defendant is the registered proprietor of all that property known as L.R. No. 209/9278, Nairobi. She averred that the 2nd defendant bank had extended various loan and credit facilities to Aquva Agencies Limited (hereinafter referred to as the borrower) between 2011 & 2022, secured by the suit property through a first charge dated 1st February 2012 and a second charge dated 26th April 2013. She stated that the facilities included multiple term loans, overdraft and letters of credit facilities, the details of which were governed by several letters of offer between 2011 & 2022. She deposed that the borrower was required to repay the aforesaid facilities within specified terms, with interest rates ranging between 13% & 15% per annum and provisions for default interest and variation at the 2nd defendant’s discretion.
6. Ms Ndonga stated that the borrower defaulted in its loan repayment obligations, accruing arrears amounting to Kshs.2,056,901.81 as at 17th April 2023, prompting the 2nd defendant to issue a demand letter of even date, followed by a 90 days’ Statutory Notice under Section 90(3) of the Land Act, dated 19th May 2023. She averred that the said Notices were sent to the address provided in the charge documents and also by email. She further stated that upon expiry of the Statutory Notice period and continued default, the 2nd defendant issued a Notification of Sale under Section 96(2) of the Land Act, dated 5th September 2023, followed by a 45-day Auctioneer’s Notice issued on 19th October 2023 through Dalali Traders Auctioneers, in compliance with the Auctioneers Rules, 1997. Ms Ndonga asserted that all requisite Statutory Notices were properly issued and served, but the borrower remains in arrears of approximately Kshs.63,492,657.28 as evidenced by the loan statements annexed to the 2nd defendant’s replying affidavit.
7. Ms Ndonga deposed that the borrower had been granted indulgence, including an eleven-month moratorium on repayment under the supplementary letter of offer dated 21st July 2020, but it still failed to regularize the accounts. She asserted that the 2nd defendant’s statutory power of sale had accrued lawfully. She averred that the instant application lacks merit as the plaintiffs have no locus standi or privity of contract to challenge the 2nd defendant’s exercise of its statutory power of sale since they are mere tenants on the charged property and not parties to the lending arrangements. She stated that the plaintiffs have in collusion with the 1st defendant, filed multiple suits seeking to stop the 2nd defendant from exercising its statutory power of sale, including Nairobi HCCC No. E113 of 2024 - Jorida Investments Limited v Diamond Trust Bank Kenya Ltd, in which the High Court delivered a Ruling on 26th June 2024 allowing the 2nd defendant to proceed with the sale.
8. Ms Ndonga stated that subsequently, the plaintiffs filed Nairobi MCELC No. E380 of 2024 - Issack Abdikadir & 3 Others v Jorida Investments Ltd & Diamond Trust Bank Kenya Ltd, which was struck out on 17th December 2024. She asserted that this suit is res judicata and offends the provisions of Sections 6, 7 & 8 of the Civil Procedure Act. She claimed that the plaintiffs entered into the alleged Lease Agreements without the 2nd defendant’s prior written consent, contrary to Sections 87 & 88 of the Land Act, 2012. She contended that the 4th plaintiff’s lease has expired by effluxion of time. She averred that the instant application is an abuse of the Court process intended to delay or frustrate the 2nd defendant’s legitimate recovery efforts, hence it should be dismissed with costs.
9. The application herein was canvassed by way of written submissions. The plaintiffs' submissions were filed on 8th March 2025 by the law firm of Moroga Wangwi & Associates Advocates, whereas the 2nd defendant’s submissions were filed on 17th March 2025 by the law firm of Madhani Advocates LLP.
10. Mr. Moroga, learned Counsel for the plaintiffs cited the case of Giella v Cassman Brown & Co. Ltd [1973] EA, and submitted that the plaintiffs have established a case to warrant being granted an order of temporary injunction. He cited the Court of Appeal case of Mrao Ltd v First American Bank of Kenya Ltd [2003] KLR 125 and asserted that the plaintiffs have established a prima facie case as they are lawful tenants on the suit property L.R. No. 209/9278, Industrial Area, Nairobi, having entered into valid Lease Agreements with the 1st defendant, having paid rent as required.
11. Counsel argued that the plaintiffs were never informed of any encumbrances or pending auction in respect to the suit property, and that the 1st defendant fraudulently concealed the fact that the suit property was charged, depriving them of the opportunity to make informed decisions. This, he claimed amounts to a violation of their rights to information and property under Articles 35 & 40 of the Constitution. He cited the case of Bamboo Tree Holdings Ltd v National Bank of Kenya Limited [2019] KEHC 9976 (KLR) and further submitted that under Section 96(3)(d) & (h) of the Land Act, the 2nd defendant was obligated to notify all occupants and lessees of the suit property prior to exercising its statutory power of sale over the suit property.
12. Mr. Moroga argued that the plaintiffs were not parties to Nairobi HCCC No. E113 of 2024 or MCELC No. E380 of 2024, therefore this suit is not res judicata, as the substantive issue of compliance with Section 96 of the Land Act remains undetermined. Counsel contended that unless the orders being sought herein are granted, the plaintiffs will suffer significant loss that cannot be adequately compensated by an award of damages. He explained that the plaintiffs operate businesses on the suit premises and an abrupt sale would result in disruption, loss of clientele, and damage to business’ goodwill. He asserted that the balance of convenience tilts in favour of the plaintiffs.
13. Mr. Kisinga, learned Counsel for the 2nd defendant submitted that the plaintiffs have not met the established principles in the case of Giella v Cassman Brown & Company Limited (supra). He argued that as a registered chargee, the 2nd defendant lawfully exercised its statutory power of sale after the 1st defendant defaulted on loan repayments, thus the sale of the suit property was valid. Counsel relied on inter alia, the Court of Appeal case of Nguruman Limited v Jan Bonde Nielsen & 2 others [2014] KECA 606 (KLR) and further submitted that a prima facie case must be based on a legal right that is directly infringed, not merely alleged or anticipated. He contended that the plaintiffs being tenants to the suit property are not parties to the charge, thus they have no legal or equitable interest capable of restraining the 2nd defendant’s exercise of its statutory power of sale.
14. Mr. Kisinga referred to the Court of Appeal case of Diamond Trust Bank Kenya Limited v Kaminara Agencies Limited & 2 others [2025] KECA 48 (KLR) and the case of Musa Kimengich Kimuge v Beth Wangari Njoroge [2021] KEELC 373 (KLR), and contended that the Lease Agreements between the plaintiffs and the 1st defendant have either lapsed or are due to lapse shortly, specifically in August 2025 & September 2026, rendering the instant application nugatory. He submitted that all the requisite Statutory Notices under the Land Act, were duly served upon the 1st defendant, a fact confirmed in Nairobi HCCC No. E113 of 2024. In addition, he asserted that the plaintiffs who neither obtained the 2nd defendant’s consent nor notified it of their alleged occupation of the charged property, cannot rely on their own illegality to defeat the 2nd defendant’s statutory right of sale as provided for under Sections 87 & 88 of the Land Act.
15. Mr. Kisinga claimed that this suit is sub judice and res judicata as per Sections 6 & 7 of the Civil Procedure Act, as similar issues are pending or have been determined in Nairobi HCCC No. E113 of 2024 and Nairobi MCELC No. E380 of 2024. He argued that the multiplicity of suits involving the same parties and subject matter constitutes an abuse of Court process. To buttress these submissions, Counsel relied on the Court of Appeal case of Bank of Africa Kenya Ltd & Another v TSS Investment Ltd & 2 Others [2024] KECA 410 (KLR), where the Court of Appeal held that cosmetic addition of parties cannot circumvent the doctrine of res judicata.
16. He referred to the case of Andrew Muriuki Wanjohi v Equity Building Society Ltd & 2 others [2006] KEHC 2727 (KLR) and stated that the plaintiffs’ alleged losses are quantifiable and can be compensated by damages, hence no irreparable harm would result if the auction proceeds. Further, that Section 99(4) of the Land Act provides a statutory remedy in damages for any irregular exercise of the power of sale. He added that the 2nd defendant being financially capable, can meet any such award. Counsel submitted that the balance of convenience tilts in favour of the 2nd defendant, given that the borrower has been in default since 2023 and the debt continues to accrue interest, risking surpassing the value of the suit property. Conversely, he contended that the plaintiffs would suffer no prejudice as any purchaser at the auction would take the property subject to existing leases under Section 46(1) of the Land Act.
ANALYSIS AND DETERMINATION.
17. I have considered the application herein, the grounds on the face of it and the affidavit in support thereof. I have also considered the replying affidavit by the 2nd defendant and the written submissions by Counsel for the parties. The issues that arise for determination are –
i) Whether the application herein and the suit are sub judice and/or res judicata; and
ii) Whether the plaintiff has made out a case to warrant being granted an order for injunction.
Whether the application herein and the suit are sub judice and/or res judicata.
18. The doctrine of sub judice is provided for under Section 6 of the Civil Procedure Act, Cap 21 Laws of Kenya, which provides that –
No court shall proceed with the trial of any suit or proceeding in which the matter in issue is also directly and substantially in issue in a previously instituted suit or proceeding between the same parties, or between parties under whom they or any of them claim, litigating under the same title, where such suit or proceeding is pending in the same or any other court having jurisdiction in Kenya to grant the relief claimed.
19. The rationale behind the doctrine of sub judice is to prevent having conflicting orders emanating from two or more different Courts over the same subject matter. A five-judge bench in the case of Ndii & others v Attorney General & others [2021] KEHC 9746 (KLR), had this to say in regard to the doctrine of sub judice-
The rationale behind this provision (Section 6 of the Civil Procedure Act) is that it is vexatious and oppressive for a claimant to sue concurrently in two courts. Where there are two courts faced with substantially the same question or issue, that question or issue should be determined in only one of those courts, and the court will….
20. In order for the doctrine of sub judice to apply, the party invoking it must demonstrate that the matter in question in the subsequent suit is directly and substantially the same as that in a previously instituted suit, that the proceedings involve the same parties or their privies litigating under the same title, and that such earlier suit is pending before a Court of competent jurisdiction capable of granting the relief sought.
21. It is not in contest that the 1st defendant filed Nairobi HCCC No. E113 of 2024 against the 2nd defendant, wherein it sought an order of temporary injunction. In a Ruling delivered on 26th June 2024, the High Court dismissed the 1st defendant’s application for injunction, effectively allowing the 2nd defendant to proceed with the sale of the suit property in exercise of its statutory power of sale. It is also not in dispute that the plaintiffs filed Nairobi MCELC No. E380 of 2024 against the defendants herein, which suit was struck out on 17th December 2024.
22. The 2nd defendant contends that this suit and the application herein are sub judice Nairobi HCCC No. E113 of 2024. A review of the pleadings filed therein annexed to the 2nd defendant’s replying affidavit reveals that the 1st defendant challenged the 2nd defendant’s exercise of its statutory power of sale, arguing, among other things, that there was no default under the Loan Agreement contrary to Section 90 of the Land Act, that the 2nd defendant failed to conduct a forced sale valuation on the suit property and sought to sell it below market value in breach of Section 97 of the Land Act, and that the 2nd defendant proceeded without issuing a Redemption Notice or Notification of Sale. The 1st defendant in that suit also asserts its proprietary rights over the suit property as the registered owner. This suit on the other hand has been filed by lessees of the suit property, challenging the 2nd defendant’s exercise of its statutory power of sale over the suit property on grounds that the 2nd defendant neither served the plaintiffs with the mandatory forty-day Statutory Notice under Section 96(3)(d) & (h) of the Land Act 2012, nor did it pin the said Notices on the premises as required by law
23. While this Court acknowledges that the subject matter in the present suit and in Nairobi HCCC No. E113 of 2024 are similar, it notes that the issues raised in the two cases are distinct. In this suit, the Court is called upon to determine whether service of the statutory forty-day Notice and Notification of Sale upon the plaintiffs was a mandatory requirement and/or a necessary precondition before the 2nd defendant could lawfully exercise its statutory power of sale over the suit property. The Court further notes that the plaintiffs herein are not parties to Nairobi HCCC No. E113 of 2024 and no evidence has been presented to demonstrate that they had Notice or knowledge of the said suit instituted by the 1st defendant against the 2nd defendant challenging the exercise of the statutory power of sale over the suit property.
24. Moreover, although the subject matter is the same in both suits, the issues for determination and the reliefs sought in the two suits are different. The earlier suit concerned the validity of the chargee’s power of sale vis-à-vis the chargor, while this suit concerns the chargee’s statutory obligations owed to third-party lessees. The determination of this suit and the instant application will therefore not result in the duplication or re-litigation of issues pending in Nairobi HCCC No. E113 of 2024, nor does it risk the issuance of conflicting decisions over the same subject matter.
25. It is therefore this Court’s finding that the instant application does not offend the doctrine of sub judice as provided for under Section 6 of the Civil Procedure Act, Cap 21 Laws of Kenya.
26. The above notwithstanding, even if this Court was to find that this suit and the instant application are sub judice, it would still be in the interest of justice to first determine the instant application for injunction before issuing any orders to stay these proceedings or to transfer this suit for consolidation with Nairobi HCCC No. E113 of 2024, so that both suits may be heard concurrently before the same Court.
27. The doctrine of res judicata on the other hand is provided for under the provisions of Section 7 of the Civil Procedure Act, Cap 21 Laws of Kenya which states as hereunder –
No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such court.
28. In the case of John Florence Maritime Services Limited & another v Cabinet Secretary for Transport and Infrastructure & 3 others [2015] KECA 472 (KLR), the Court of Appeal sitting in Malindi set out the ingredients of res judicata as follows:
From the above, the ingredients of res judicata are firstly, that the issue in dispute in the former suit between the parties must be directly or substantially be in dispute between the parties in the suit where the doctrine is pleaded as a bar. Secondly, that the former suit should be the same parties, or parties under whom they or any of them claim, litigating under the same title and lastly that the court or tribunal before which the former suit was litigated was competent and determined the suit finally (see Karia & Another v the Attorney General and Others [2005] 1 EA 83.
29. Under Section 7 of the Civil Procedure Act, in order for a matter to be res judicata, it must be shown that the issues in the subsequent suit are directly and substantially the same as those in a former suit, that the former suit was between the same parties or parties litigating under the same title, and that the issue was heard and finally determined by a Court of competent jurisdiction. This Court has already found that the plaintiffs in this case were not parties to Nairobi HCCC No. E113 of 2024, and it has not been demonstrated that they were litigating under the same title as the 1st defendant, who was the plaintiff in that matter.
30. Further, the claims of the plaintiffs herein arise from their independent rights as lessees of the suit property, which are distinct from the proprietary interests of the chargor. In addition, the issues in the two suits are not identical. Whereas Nairobi HCCC No. E113 of 2024 concerns the validity of the 2nd defendant’s exercise of its statutory power of sale vis-à-vis the chargor under Sections 90 & 97 of the Land Act, this suit turns on whether the 2nd defendant complied with the requirements of Section 96(3)(d) & (h) of the Land Act by serving the plaintiffs, as lessees, with the requisite forty-day Statutory Notice and Notification of Sale. Further, the Ruling delivered in Nairobi HCCC No. E113 of 2024 was in respect of an interlocutory application and did not finally determine the substantive issues in that case.
31. Consequently, this Court finds that the essential elements of res judicata have not been met, hence this suit and the instant application cannot be barred by the doctrine of res judicata.
32. In light of the foregoing, this Court finds that neither a plea of sub judice nor res judicata can be successfully raised in this case.
Whether the plaintiff has made out a case to warrant being granted an order for injunction.
33. Interlocutory injunctions are provided for under Order 40 Rules 1(a) & (b) of the Civil Procedure Rules, 2010, which states that -
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.
34. The principles governing the grant of interlocutory injunctions were well set out in the case of Giella v Cassman Brown & Co. Ltd (supra). In Nguruman Limited v Jan Bonde Nielsen & 2 others (supra), the Court of Appeal while considering an application for injunction, reaffirmed and elaborated on the Giella v Cassman Brown & Company Ltd principles, by holding that -
In an interlocutory injunction application, the applicant has to satisfy the triple requirements to;
a) establish his case only at a prima facie level,
b) demonstrate irreparable injury if a temporary injunction is not granted, and
c) ally any doubts as to (b) by showing that the balance of convenience is in his favour.
35. 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 hereunder -
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.
36. The plaintiffs herein contend that as lessees of the suit property, they were entitled to be served with the forty-day Notice of Notification of Sale as required under Section 96(2) of the Land Act before the 2nd defendant could lawfully exercise its statutory power of sale over the suit property. They rely on the provisions of Section 96(3)(d) and (h) of the Land Act, 2012, which stipulate as follows -
A copy of the notice to sell served in accordance with subsection (2) shall be served on -
a) the Commission, if the charged land is public land;
b) the holder of the land out of which the lease has been granted, if the charged land is a lease;
c) a spouse of the chargor who had given the consent;
d) any lessee and sub lessee of the charged land or of any buildings on the charged land;
e) any person who is a co-owner with the chargor;
f) any other chargee of money secured by a charge on the charged land of whom the chargee proposing to exercise the power of sale has actual notice;
g) any guarantor of the money advanced under the charge;
h) any other person known to have a right to enter on and use the land or the natural resources in, on, or under the charged land by affixing a notice at the property; and
i) any other persons as may be prescribed by regulations, and shall be posted in a prominent place at or as near as may be to the charged land. (Emphasis added).
37. The 2nd defendant on the other hand averred that the 1st defendant is the registered owner of the suit property and that it had advanced various loan and credit facilities to Aquva Agencies Limited between 2011 & 2022, secured by the said property through a first legal charge dated 1st February 2012 and a second legal charge dated 26th April 2013. It contended that the plaintiffs entered into the alleged Lease Agreements without obtaining its prior written consent, thereby contravening Sections 87 & 88 of the Land Act, 2012, which state as follows–
87. Chargee’s consent to transfer
If a charge contains a condition, express or implied that chargee prohibits the chargor from, transferring, assigning, leasing, or in the case of a lease, subleasing the land, without the consent of the chargee, no transfer, assignment, lease or sublease shall be registered until the written consent of the chargee has been produced to the Registrar.
88. Implied covenant by the chargor
1) There shall be implied in every charge covenants by the chargor with the chargee binding the chargor –
a) to pay the principal money on the day appointed in the charge agreement, and, so long as any of the principal money or any part thereof remains unpaid, to pay interest on the money thereon or on so much of the money that for the time being remains unpaid at the rate and on the days and in the manner specified in charge agreement;
b) to pay all rates, charges, rent, taxes and other outgoings that are at all times payable in respect of the charged land;
c) to repair and keep in repair all buildings and other improvements upon the charged land or to permit the chargee or chargee’s agent to enter the land and examine the state and condition of such buildings and improvements after a seven days notice to the chargor until the charge is discharged;
d) to ensure by insurance or any other means that may be prescribed or which are appropriate, that resources will be available to make good any loss or damage caused by fire to any building on the land, and where insurance is taken out, it is done so in the joint names of the chargor and chargee with insurers approved by the chargee and to the full value of all the buildings;
e) in the case of a charge of land used for agricultural purposes, to use the land in a sustainable manner in accordance with the principles and any conditions subject to which the land or lease under which the land is held, and in compliance with all written laws and lawful orders applicable to that use of the land;
f) not to lease or sublease the charged land or any part of it for any period longer than a year without the previous consent in writing of the chargee, which consent shall not be unreasonably withheld;
g) not to transfer or assign the land or lease or part of it without the previous consent in writing of the chargee which consent shall not be unreasonably withheld;
h) in the case of a charge of a lease, during the continuance of the charge, to pay, perform and observe the rent, covenants and conditions contained in or implied by and in the lease contained and implied and on the part of the lessee to be paid, performed and observed and to keep the chargee indemnified against all proceedings, expenses and claims on account of non-payment any part of the rent or part of it or the breach or non-observance of any covenants and conditions referred to above, and, if the lessee has an enforceable right to renew the lease, to renew it;
i) if the charge is a second or subsequent charge, that he chargor will pay the interest from
[...truncated]
2. The 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 Mr. Issack Abdikadir, the 1st plaintiff herein. Mr. Abdikadir averred that between 2023 & 2024, each of the plaintiffs entered into separate Lease Agreements with the 1st defendant, being the Landlord of all that property known as Nairobi L.R. No. 209/9278, situated in Industrial Area, Nairobi County. He stated that the 1st plaintiff leased part of the premises on 15th August 2023 for a three (3) year term at a monthly rent of Kshs.300,000/= to operate a transport business, the 2nd plaintiff leased a section of the said premises on 15th February 2024 for one (1) year at Kshs.140,000/= per month for use as a storage godown for export of frankincense and gum, the 3rd plaintiff leased another portion on 1st August 2024 for one (1) year at Kshs.100,000/= per month to operate an MDF furniture business, while the 4th plaintiff leased a section on 1st January 2024 for one (1) year at Kshs.100,000/= per month for use as a motor vehicle garage known as Wembleys Motor Masters.
3. Mr. Abdikadir deposed that the said Leases were duly executed, rent was paid quarterly through the 1st defendant’s agent, Aquva Agencies Limited and that the plaintiffs have since enjoyed quiet possession of their respective premises. He stated that without any prior Notice or communication, they were shocked to learn through a Newspaper Advertisement dated 29th August 2024 that Dalali Traders Auctioneers, acting on the instructions of the 2nd defendant, intended to sell the entire suit property by public auction. He asserted that the plaintiffs were unaware of the 2nd defendant’s interest in the suit property and the 1st defendant had not issued any Termination Notices to enable them to relocate. He averred that the 2nd defendant neither served the plaintiffs with the mandatory forty-day Statutory Notice under Section 96(3)(d) & (h) of the Land Act, 2012, nor did it pin Notices under the said provisions, at the premises as required by law.
4. Mr. Abdikadir deposed that the plaintiffs fear that the intended sale, if allowed to proceed, will gravely violate their constitutional rights to property and access to information under Articles 35(1)(b) & 40 of the Constitution, disrupt their businesses and expose them to financial losses since rent already paid for the current quarter remains unutilized. He also expressed apprehension that the advertisement has caused panic among their customers and suppliers, affecting their business operations and reputation. Mr. Abdikadir averred that if the intended auction proceeds, their livelihoods and those of their employees will be jeopardized, as they will be forced to vacate the premises abruptly without sufficient time to secure alternative premises.
5. In opposition to the application, the 2nd defendant filed a replying affidavit sworn on 8th January 2025 by Ms Faith Ndonga, the 2nd defendant’s Legal Manager in the Debt Recovery Department. Ms Ndonga confirmed that the 1st defendant is the registered proprietor of all that property known as L.R. No. 209/9278, Nairobi. She averred that the 2nd defendant bank had extended various loan and credit facilities to Aquva Agencies Limited (hereinafter referred to as the borrower) between 2011 & 2022, secured by the suit property through a first charge dated 1st February 2012 and a second charge dated 26th April 2013. She stated that the facilities included multiple term loans, overdraft and letters of credit facilities, the details of which were governed by several letters of offer between 2011 & 2022. She deposed that the borrower was required to repay the aforesaid facilities within specified terms, with interest rates ranging between 13% & 15% per annum and provisions for default interest and variation at the 2nd defendant’s discretion.
6. Ms Ndonga stated that the borrower defaulted in its loan repayment obligations, accruing arrears amounting to Kshs.2,056,901.81 as at 17th April 2023, prompting the 2nd defendant to issue a demand letter of even date, followed by a 90 days’ Statutory Notice under Section 90(3) of the Land Act, dated 19th May 2023. She averred that the said Notices were sent to the address provided in the charge documents and also by email. She further stated that upon expiry of the Statutory Notice period and continued default, the 2nd defendant issued a Notification of Sale under Section 96(2) of the Land Act, dated 5th September 2023, followed by a 45-day Auctioneer’s Notice issued on 19th October 2023 through Dalali Traders Auctioneers, in compliance with the Auctioneers Rules, 1997. Ms Ndonga asserted that all requisite Statutory Notices were properly issued and served, but the borrower remains in arrears of approximately Kshs.63,492,657.28 as evidenced by the loan statements annexed to the 2nd defendant’s replying affidavit.
7. Ms Ndonga deposed that the borrower had been granted indulgence, including an eleven-month moratorium on repayment under the supplementary letter of offer dated 21st July 2020, but it still failed to regularize the accounts. She asserted that the 2nd defendant’s statutory power of sale had accrued lawfully. She averred that the instant application lacks merit as the plaintiffs have no locus standi or privity of contract to challenge the 2nd defendant’s exercise of its statutory power of sale since they are mere tenants on the charged property and not parties to the lending arrangements. She stated that the plaintiffs have in collusion with the 1st defendant, filed multiple suits seeking to stop the 2nd defendant from exercising its statutory power of sale, including Nairobi HCCC No. E113 of 2024 - Jorida Investments Limited v Diamond Trust Bank Kenya Ltd, in which the High Court delivered a Ruling on 26th June 2024 allowing the 2nd defendant to proceed with the sale.
8. Ms Ndonga stated that subsequently, the plaintiffs filed Nairobi MCELC No. E380 of 2024 - Issack Abdikadir & 3 Others v Jorida Investments Ltd & Diamond Trust Bank Kenya Ltd, which was struck out on 17th December 2024. She asserted that this suit is res judicata and offends the provisions of Sections 6, 7 & 8 of the Civil Procedure Act. She claimed that the plaintiffs entered into the alleged Lease Agreements without the 2nd defendant’s prior written consent, contrary to Sections 87 & 88 of the Land Act, 2012. She contended that the 4th plaintiff’s lease has expired by effluxion of time. She averred that the instant application is an abuse of the Court process intended to delay or frustrate the 2nd defendant’s legitimate recovery efforts, hence it should be dismissed with costs.
9. The application herein was canvassed by way of written submissions. The plaintiffs' submissions were filed on 8th March 2025 by the law firm of Moroga Wangwi & Associates Advocates, whereas the 2nd defendant’s submissions were filed on 17th March 2025 by the law firm of Madhani Advocates LLP.
10. Mr. Moroga, learned Counsel for the plaintiffs cited the case of Giella v Cassman Brown & Co. Ltd [1973] EA, and submitted that the plaintiffs have established a case to warrant being granted an order of temporary injunction. He cited the Court of Appeal case of Mrao Ltd v First American Bank of Kenya Ltd [2003] KLR 125 and asserted that the plaintiffs have established a prima facie case as they are lawful tenants on the suit property L.R. No. 209/9278, Industrial Area, Nairobi, having entered into valid Lease Agreements with the 1st defendant, having paid rent as required.
11. Counsel argued that the plaintiffs were never informed of any encumbrances or pending auction in respect to the suit property, and that the 1st defendant fraudulently concealed the fact that the suit property was charged, depriving them of the opportunity to make informed decisions. This, he claimed amounts to a violation of their rights to information and property under Articles 35 & 40 of the Constitution. He cited the case of Bamboo Tree Holdings Ltd v National Bank of Kenya Limited [2019] KEHC 9976 (KLR) and further submitted that under Section 96(3)(d) & (h) of the Land Act, the 2nd defendant was obligated to notify all occupants and lessees of the suit property prior to exercising its statutory power of sale over the suit property.
12. Mr. Moroga argued that the plaintiffs were not parties to Nairobi HCCC No. E113 of 2024 or MCELC No. E380 of 2024, therefore this suit is not res judicata, as the substantive issue of compliance with Section 96 of the Land Act remains undetermined. Counsel contended that unless the orders being sought herein are granted, the plaintiffs will suffer significant loss that cannot be adequately compensated by an award of damages. He explained that the plaintiffs operate businesses on the suit premises and an abrupt sale would result in disruption, loss of clientele, and damage to business’ goodwill. He asserted that the balance of convenience tilts in favour of the plaintiffs.
13. Mr. Kisinga, learned Counsel for the 2nd defendant submitted that the plaintiffs have not met the established principles in the case of Giella v Cassman Brown & Company Limited (supra). He argued that as a registered chargee, the 2nd defendant lawfully exercised its statutory power of sale after the 1st defendant defaulted on loan repayments, thus the sale of the suit property was valid. Counsel relied on inter alia, the Court of Appeal case of Nguruman Limited v Jan Bonde Nielsen & 2 others [2014] KECA 606 (KLR) and further submitted that a prima facie case must be based on a legal right that is directly infringed, not merely alleged or anticipated. He contended that the plaintiffs being tenants to the suit property are not parties to the charge, thus they have no legal or equitable interest capable of restraining the 2nd defendant’s exercise of its statutory power of sale.
14. Mr. Kisinga referred to the Court of Appeal case of Diamond Trust Bank Kenya Limited v Kaminara Agencies Limited & 2 others [2025] KECA 48 (KLR) and the case of Musa Kimengich Kimuge v Beth Wangari Njoroge [2021] KEELC 373 (KLR), and contended that the Lease Agreements between the plaintiffs and the 1st defendant have either lapsed or are due to lapse shortly, specifically in August 2025 & September 2026, rendering the instant application nugatory. He submitted that all the requisite Statutory Notices under the Land Act, were duly served upon the 1st defendant, a fact confirmed in Nairobi HCCC No. E113 of 2024. In addition, he asserted that the plaintiffs who neither obtained the 2nd defendant’s consent nor notified it of their alleged occupation of the charged property, cannot rely on their own illegality to defeat the 2nd defendant’s statutory right of sale as provided for under Sections 87 & 88 of the Land Act.
15. Mr. Kisinga claimed that this suit is sub judice and res judicata as per Sections 6 & 7 of the Civil Procedure Act, as similar issues are pending or have been determined in Nairobi HCCC No. E113 of 2024 and Nairobi MCELC No. E380 of 2024. He argued that the multiplicity of suits involving the same parties and subject matter constitutes an abuse of Court process. To buttress these submissions, Counsel relied on the Court of Appeal case of Bank of Africa Kenya Ltd & Another v TSS Investment Ltd & 2 Others [2024] KECA 410 (KLR), where the Court of Appeal held that cosmetic addition of parties cannot circumvent the doctrine of res judicata.
16. He referred to the case of Andrew Muriuki Wanjohi v Equity Building Society Ltd & 2 others [2006] KEHC 2727 (KLR) and stated that the plaintiffs’ alleged losses are quantifiable and can be compensated by damages, hence no irreparable harm would result if the auction proceeds. Further, that Section 99(4) of the Land Act provides a statutory remedy in damages for any irregular exercise of the power of sale. He added that the 2nd defendant being financially capable, can meet any such award. Counsel submitted that the balance of convenience tilts in favour of the 2nd defendant, given that the borrower has been in default since 2023 and the debt continues to accrue interest, risking surpassing the value of the suit property. Conversely, he contended that the plaintiffs would suffer no prejudice as any purchaser at the auction would take the property subject to existing leases under Section 46(1) of the Land Act.
ANALYSIS AND DETERMINATION.
17. I have considered the application herein, the grounds on the face of it and the affidavit in support thereof. I have also considered the replying affidavit by the 2nd defendant and the written submissions by Counsel for the parties. The issues that arise for determination are –
i) Whether the application herein and the suit are sub judice and/or res judicata; and
ii) Whether the plaintiff has made out a case to warrant being granted an order for injunction.
Whether the application herein and the suit are sub judice and/or res judicata.
18. The doctrine of sub judice is provided for under Section 6 of the Civil Procedure Act, Cap 21 Laws of Kenya, which provides that –
No court shall proceed with the trial of any suit or proceeding in which the matter in issue is also directly and substantially in issue in a previously instituted suit or proceeding between the same parties, or between parties under whom they or any of them claim, litigating under the same title, where such suit or proceeding is pending in the same or any other court having jurisdiction in Kenya to grant the relief claimed.
19. The rationale behind the doctrine of sub judice is to prevent having conflicting orders emanating from two or more different Courts over the same subject matter. A five-judge bench in the case of Ndii & others v Attorney General & others [2021] KEHC 9746 (KLR), had this to say in regard to the doctrine of sub judice-
The rationale behind this provision (Section 6 of the Civil Procedure Act) is that it is vexatious and oppressive for a claimant to sue concurrently in two courts. Where there are two courts faced with substantially the same question or issue, that question or issue should be determined in only one of those courts, and the court will….
20. In order for the doctrine of sub judice to apply, the party invoking it must demonstrate that the matter in question in the subsequent suit is directly and substantially the same as that in a previously instituted suit, that the proceedings involve the same parties or their privies litigating under the same title, and that such earlier suit is pending before a Court of competent jurisdiction capable of granting the relief sought.
21. It is not in contest that the 1st defendant filed Nairobi HCCC No. E113 of 2024 against the 2nd defendant, wherein it sought an order of temporary injunction. In a Ruling delivered on 26th June 2024, the High Court dismissed the 1st defendant’s application for injunction, effectively allowing the 2nd defendant to proceed with the sale of the suit property in exercise of its statutory power of sale. It is also not in dispute that the plaintiffs filed Nairobi MCELC No. E380 of 2024 against the defendants herein, which suit was struck out on 17th December 2024.
22. The 2nd defendant contends that this suit and the application herein are sub judice Nairobi HCCC No. E113 of 2024. A review of the pleadings filed therein annexed to the 2nd defendant’s replying affidavit reveals that the 1st defendant challenged the 2nd defendant’s exercise of its statutory power of sale, arguing, among other things, that there was no default under the Loan Agreement contrary to Section 90 of the Land Act, that the 2nd defendant failed to conduct a forced sale valuation on the suit property and sought to sell it below market value in breach of Section 97 of the Land Act, and that the 2nd defendant proceeded without issuing a Redemption Notice or Notification of Sale. The 1st defendant in that suit also asserts its proprietary rights over the suit property as the registered owner. This suit on the other hand has been filed by lessees of the suit property, challenging the 2nd defendant’s exercise of its statutory power of sale over the suit property on grounds that the 2nd defendant neither served the plaintiffs with the mandatory forty-day Statutory Notice under Section 96(3)(d) & (h) of the Land Act 2012, nor did it pin the said Notices on the premises as required by law
23. While this Court acknowledges that the subject matter in the present suit and in Nairobi HCCC No. E113 of 2024 are similar, it notes that the issues raised in the two cases are distinct. In this suit, the Court is called upon to determine whether service of the statutory forty-day Notice and Notification of Sale upon the plaintiffs was a mandatory requirement and/or a necessary precondition before the 2nd defendant could lawfully exercise its statutory power of sale over the suit property. The Court further notes that the plaintiffs herein are not parties to Nairobi HCCC No. E113 of 2024 and no evidence has been presented to demonstrate that they had Notice or knowledge of the said suit instituted by the 1st defendant against the 2nd defendant challenging the exercise of the statutory power of sale over the suit property.
24. Moreover, although the subject matter is the same in both suits, the issues for determination and the reliefs sought in the two suits are different. The earlier suit concerned the validity of the chargee’s power of sale vis-à-vis the chargor, while this suit concerns the chargee’s statutory obligations owed to third-party lessees. The determination of this suit and the instant application will therefore not result in the duplication or re-litigation of issues pending in Nairobi HCCC No. E113 of 2024, nor does it risk the issuance of conflicting decisions over the same subject matter.
25. It is therefore this Court’s finding that the instant application does not offend the doctrine of sub judice as provided for under Section 6 of the Civil Procedure Act, Cap 21 Laws of Kenya.
26. The above notwithstanding, even if this Court was to find that this suit and the instant application are sub judice, it would still be in the interest of justice to first determine the instant application for injunction before issuing any orders to stay these proceedings or to transfer this suit for consolidation with Nairobi HCCC No. E113 of 2024, so that both suits may be heard concurrently before the same Court.
27. The doctrine of res judicata on the other hand is provided for under the provisions of Section 7 of the Civil Procedure Act, Cap 21 Laws of Kenya which states as hereunder –
No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such court.
28. In the case of John Florence Maritime Services Limited & another v Cabinet Secretary for Transport and Infrastructure & 3 others [2015] KECA 472 (KLR), the Court of Appeal sitting in Malindi set out the ingredients of res judicata as follows:
From the above, the ingredients of res judicata are firstly, that the issue in dispute in the former suit between the parties must be directly or substantially be in dispute between the parties in the suit where the doctrine is pleaded as a bar. Secondly, that the former suit should be the same parties, or parties under whom they or any of them claim, litigating under the same title and lastly that the court or tribunal before which the former suit was litigated was competent and determined the suit finally (see Karia & Another v the Attorney General and Others [2005] 1 EA 83.
29. Under Section 7 of the Civil Procedure Act, in order for a matter to be res judicata, it must be shown that the issues in the subsequent suit are directly and substantially the same as those in a former suit, that the former suit was between the same parties or parties litigating under the same title, and that the issue was heard and finally determined by a Court of competent jurisdiction. This Court has already found that the plaintiffs in this case were not parties to Nairobi HCCC No. E113 of 2024, and it has not been demonstrated that they were litigating under the same title as the 1st defendant, who was the plaintiff in that matter.
30. Further, the claims of the plaintiffs herein arise from their independent rights as lessees of the suit property, which are distinct from the proprietary interests of the chargor. In addition, the issues in the two suits are not identical. Whereas Nairobi HCCC No. E113 of 2024 concerns the validity of the 2nd defendant’s exercise of its statutory power of sale vis-à-vis the chargor under Sections 90 & 97 of the Land Act, this suit turns on whether the 2nd defendant complied with the requirements of Section 96(3)(d) & (h) of the Land Act by serving the plaintiffs, as lessees, with the requisite forty-day Statutory Notice and Notification of Sale. Further, the Ruling delivered in Nairobi HCCC No. E113 of 2024 was in respect of an interlocutory application and did not finally determine the substantive issues in that case.
31. Consequently, this Court finds that the essential elements of res judicata have not been met, hence this suit and the instant application cannot be barred by the doctrine of res judicata.
32. In light of the foregoing, this Court finds that neither a plea of sub judice nor res judicata can be successfully raised in this case.
Whether the plaintiff has made out a case to warrant being granted an order for injunction.
33. Interlocutory injunctions are provided for under Order 40 Rules 1(a) & (b) of the Civil Procedure Rules, 2010, which states that -
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.
34. The principles governing the grant of interlocutory injunctions were well set out in the case of Giella v Cassman Brown & Co. Ltd (supra). In Nguruman Limited v Jan Bonde Nielsen & 2 others (supra), the Court of Appeal while considering an application for injunction, reaffirmed and elaborated on the Giella v Cassman Brown & Company Ltd principles, by holding that -
In an interlocutory injunction application, the applicant has to satisfy the triple requirements to;
a) establish his case only at a prima facie level,
b) demonstrate irreparable injury if a temporary injunction is not granted, and
c) ally any doubts as to (b) by showing that the balance of convenience is in his favour.
35. 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 hereunder -
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.
36. The plaintiffs herein contend that as lessees of the suit property, they were entitled to be served with the forty-day Notice of Notification of Sale as required under Section 96(2) of the Land Act before the 2nd defendant could lawfully exercise its statutory power of sale over the suit property. They rely on the provisions of Section 96(3)(d) and (h) of the Land Act, 2012, which stipulate as follows -
A copy of the notice to sell served in accordance with subsection (2) shall be served on -
a) the Commission, if the charged land is public land;
b) the holder of the land out of which the lease has been granted, if the charged land is a lease;
c) a spouse of the chargor who had given the consent;
d) any lessee and sub lessee of the charged land or of any buildings on the charged land;
e) any person who is a co-owner with the chargor;
f) any other chargee of money secured by a charge on the charged land of whom the chargee proposing to exercise the power of sale has actual notice;
g) any guarantor of the money advanced under the charge;
h) any other person known to have a right to enter on and use the land or the natural resources in, on, or under the charged land by affixing a notice at the property; and
i) any other persons as may be prescribed by regulations, and shall be posted in a prominent place at or as near as may be to the charged land. (Emphasis added).
37. The 2nd defendant on the other hand averred that the 1st defendant is the registered owner of the suit property and that it had advanced various loan and credit facilities to Aquva Agencies Limited between 2011 & 2022, secured by the said property through a first legal charge dated 1st February 2012 and a second legal charge dated 26th April 2013. It contended that the plaintiffs entered into the alleged Lease Agreements without obtaining its prior written consent, thereby contravening Sections 87 & 88 of the Land Act, 2012, which state as follows–
87. Chargee’s consent to transfer
If a charge contains a condition, express or implied that chargee prohibits the chargor from, transferring, assigning, leasing, or in the case of a lease, subleasing the land, without the consent of the chargee, no transfer, assignment, lease or sublease shall be registered until the written consent of the chargee has been produced to the Registrar.
88. Implied covenant by the chargor
1) There shall be implied in every charge covenants by the chargor with the chargee binding the chargor –
a) to pay the principal money on the day appointed in the charge agreement, and, so long as any of the principal money or any part thereof remains unpaid, to pay interest on the money thereon or on so much of the money that for the time being remains unpaid at the rate and on the days and in the manner specified in charge agreement;
b) to pay all rates, charges, rent, taxes and other outgoings that are at all times payable in respect of the charged land;
c) to repair and keep in repair all buildings and other improvements upon the charged land or to permit the chargee or chargee’s agent to enter the land and examine the state and condition of such buildings and improvements after a seven days notice to the chargor until the charge is discharged;
d) to ensure by insurance or any other means that may be prescribed or which are appropriate, that resources will be available to make good any loss or damage caused by fire to any building on the land, and where insurance is taken out, it is done so in the joint names of the chargor and chargee with insurers approved by the chargee and to the full value of all the buildings;
e) in the case of a charge of land used for agricultural purposes, to use the land in a sustainable manner in accordance with the principles and any conditions subject to which the land or lease under which the land is held, and in compliance with all written laws and lawful orders applicable to that use of the land;
f) not to lease or sublease the charged land or any part of it for any period longer than a year without the previous consent in writing of the chargee, which consent shall not be unreasonably withheld;
g) not to transfer or assign the land or lease or part of it without the previous consent in writing of the chargee which consent shall not be unreasonably withheld;
h) in the case of a charge of a lease, during the continuance of the charge, to pay, perform and observe the rent, covenants and conditions contained in or implied by and in the lease contained and implied and on the part of the lessee to be paid, performed and observed and to keep the chargee indemnified against all proceedings, expenses and claims on account of non-payment any part of the rent or part of it or the breach or non-observance of any covenants and conditions referred to above, and, if the lessee has an enforceable right to renew the lease, to renew it;
i) if the charge is a second or subsequent charge, that he chargor will pay the interest from
[...truncated]