1. INTRODUCTION
1. The Notice of Motion dated 10th March 2026 is brought under the relevant provisions of the Constitution of Kenya, the Companies Act, the Civil Procedure Act, and the Civil Procedure Rules.
2. The application seeks interlocutory reliefs and leave to institute derivative proceedings arising from allegations of irregular alterations to the statutory records of Zabach Enterprises Limited, alleged fraudulent removal of a director, interference with corporate governance, and refusal to provide company records.
3. The Court has carefully considered the application, the supporting affidavit, the replying affidavit, the further affidavit, annexures thereto, and the rival written submissions filed by counsel.
2. PRAYERS SOUGHT
The Applicants seek the following orders:
a. Spent.
b. A temporary injunction restraining the 1st Respondent, his agents or servants from effecting or causing any alteration to the statutory records, directorship, or shareholding of Zabach Enterprises Limited pending determination of the application.
c. A temporary injunction restraining the 1st and 2nd Respondents from interfering with the governance, statutory records, or financial affairs of the Company pending hearing and determination of the derivative suit.
d. Leave to institute derivative proceedings on behalf of and for the benefit of Zabach Enterprises Limited.
e. An order directing the 3rd Respondent, the Registrar of Companies, not to register or effect further changes relating to the Company without leave of this Honourable Court pending determination of the derivative suit.
f. Costs.
3. FACTUAL BACKGROUND
4. The 1st Applicant deposes that she and the 2nd Applicant are co-administrators of the estate of the late Onesmus Shauri Mtsunga.
5. It is contended that the deceased was a founding director and held 40% shareholding in the Company, comprising 40 ordinary shares valued at Kshs. 40,000.
6. Upon conducting a company search and reviewing a CR 12 report, the Applicants allegedly discovered that:
o The deceased had been removed as director;
o The 1st Respondent is reflected as sole director;
o The 2nd Applicant appears in the records without proper explanation;
o The changes were effected without notice to the Applicants.
7. The Applicants further allege refusal by the 1st Respondent to provide statutory documents including the register of members, financial statements, and bank records.
8. They contend that these actions amount to fraudulent interference with corporate governance and necessitate derivative proceedings.
4. RESPONDENTS’ CASE
9. The 1st Respondent states that following the death of the deceased, statutory procedures were followed to reflect cessation of directorship.
10. He contends that a deceased person cannot legally remain a director pursuant to sections 129, 135, and 136 of the Companies Act, which require directors to be natural persons.
11. He further argues that prior disputes were resolved by consent and that the present application is motivated by attempts to seek compensation rather than protect corporate interests.
5. ISSUES FOR DETERMINATION
The Court identifies the following issues:
1. Whether the Applicants have established a prima facie case.
2. Whether the Applicants have satisfied the threshold for grant of a temporary injunction.
3. Whether leave to institute derivative proceedings should be granted.
4. What consequential orders should issue.
6. LEGAL ANALYSIS
(A) Principles Governing Temporary Injunctions
12. The settled principles are laid down in:
• Giella v Cassman Brown & Co. Ltd (1973) EA 358
• Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR
13. The applicant must demonstrate:
i. A prima facie case with a probability of success;ii. Irreparable injury;iii. Where in doubt, the balance of convenience.
14. These principles must be applied sequentially.
(B) Prima Facie Case
15. In Mrao Ltd v First American Bank of Kenya Ltd [2003] KLR 125 , the Court defined a prima facie case as one which discloses an apparent infringement of rights requiring explanation.
16. The Applicants have raised serious allegations of:
• Fraud;
• Irregular alteration of statutory records;
• Disputed directorship changes;
• Denial of access to company records.
17. These allegations, if proved, could fundamentally affect the governance and ownership structure of the Company.
18. The Court therefore finds that a prima facie case has been established.
(C) Irreparable Injury
19. Under Nguruman Limited v Jan Bonde Nielsen (supra) , irreparable injury must be actual and substantial, not speculative.
20. The dispute concerns:
• Corporate control;
• Directorship;
• Shareholding structure;
• Access to financial records.
21. Alterations to company structure may permanently affect governance and shareholder rights in a manner not easily compensable by damages.
22. The Court finds that failure to preserve the status quo may occasion irreparable harm.
23. Accordingly, the balance of convenience favours maintaining the current position pending determination of the derivative suit.
(D) Leave to Institute Derivative Proceedings
24. Derivative actions are designed to enable a member to sue on behalf of the company where wrongdoing is alleged and those in control may not act in the company’s interest.
25. Given the prima facie case established and the seriousness of the allegations, the threshold for leave has been satisfied.
26. Prayer (d) had been allowed at the ex parte stage.
(E) Preservation Orders
27. To protect the integrity of the proceedings and prevent further alteration of the corporate structure:
• The 1st Respondent is restrained from altering statutory records, directorship, or shareholding.
• The 1st and 2nd Respondents are restrained from interfering with governance or financial affairs.
• The Registrar of Companies is directed not to effect further changes without leave of Court.
28. These orders are necessary to preserve the substratum of the dispute pending determination of the derivative suit.
(F) Costs
29. The application has substantially succeeded.
30. Costs are awarded to the Applicants.
7. FINAL ORDERS
Accordingly, the Court makes the following orders:
1. Prayer (b) Allowed.
2. Prayer (c) Allowed.
3. Prayer (d) Allowed. Leave had been granted to institute derivative proceedings.
4. Prayer (e) Allowed. Registrar restrained from effecting changes without leave of Court.
5. Prayer (f) Costs awarded to the Applicants
6. The suit to be expedited since leave had been granted early enough
8. CONCLUSION
The Court finds that serious allegations of fraud and governance irregularities have been raised. In the interests of justice, corporate stability, and preservation of the subject matter of the dispute, protective orders are warranted pending the hearing and determination of the derivative proceedings.
It is so ordered.
DATED, SIGNED AND DELIVERED AT MOMBASA THIS …13TH… DAY OF MAY………… 2026.
HON. LADY JUSTICE W. K. MICHENI
JUDGE
1. The Notice of Motion dated 10th March 2026 is brought under the relevant provisions of the Constitution of Kenya, the Companies Act, the Civil Procedure Act, and the Civil Procedure Rules.
2. The application seeks interlocutory reliefs and leave to institute derivative proceedings arising from allegations of irregular alterations to the statutory records of Zabach Enterprises Limited, alleged fraudulent removal of a director, interference with corporate governance, and refusal to provide company records.
3. The Court has carefully considered the application, the supporting affidavit, the replying affidavit, the further affidavit, annexures thereto, and the rival written submissions filed by counsel.
2. PRAYERS SOUGHT
The Applicants seek the following orders:
a. Spent.
b. A temporary injunction restraining the 1st Respondent, his agents or servants from effecting or causing any alteration to the statutory records, directorship, or shareholding of Zabach Enterprises Limited pending determination of the application.
c. A temporary injunction restraining the 1st and 2nd Respondents from interfering with the governance, statutory records, or financial affairs of the Company pending hearing and determination of the derivative suit.
d. Leave to institute derivative proceedings on behalf of and for the benefit of Zabach Enterprises Limited.
e. An order directing the 3rd Respondent, the Registrar of Companies, not to register or effect further changes relating to the Company without leave of this Honourable Court pending determination of the derivative suit.
f. Costs.
3. FACTUAL BACKGROUND
4. The 1st Applicant deposes that she and the 2nd Applicant are co-administrators of the estate of the late Onesmus Shauri Mtsunga.
5. It is contended that the deceased was a founding director and held 40% shareholding in the Company, comprising 40 ordinary shares valued at Kshs. 40,000.
6. Upon conducting a company search and reviewing a CR 12 report, the Applicants allegedly discovered that:
o The deceased had been removed as director;
o The 1st Respondent is reflected as sole director;
o The 2nd Applicant appears in the records without proper explanation;
o The changes were effected without notice to the Applicants.
7. The Applicants further allege refusal by the 1st Respondent to provide statutory documents including the register of members, financial statements, and bank records.
8. They contend that these actions amount to fraudulent interference with corporate governance and necessitate derivative proceedings.
4. RESPONDENTS’ CASE
9. The 1st Respondent states that following the death of the deceased, statutory procedures were followed to reflect cessation of directorship.
10. He contends that a deceased person cannot legally remain a director pursuant to sections 129, 135, and 136 of the Companies Act, which require directors to be natural persons.
11. He further argues that prior disputes were resolved by consent and that the present application is motivated by attempts to seek compensation rather than protect corporate interests.
5. ISSUES FOR DETERMINATION
The Court identifies the following issues:
1. Whether the Applicants have established a prima facie case.
2. Whether the Applicants have satisfied the threshold for grant of a temporary injunction.
3. Whether leave to institute derivative proceedings should be granted.
4. What consequential orders should issue.
6. LEGAL ANALYSIS
(A) Principles Governing Temporary Injunctions
12. The settled principles are laid down in:
• Giella v Cassman Brown & Co. Ltd (1973) EA 358
• Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR
13. The applicant must demonstrate:
i. A prima facie case with a probability of success;ii. Irreparable injury;iii. Where in doubt, the balance of convenience.
14. These principles must be applied sequentially.
(B) Prima Facie Case
15. In Mrao Ltd v First American Bank of Kenya Ltd [2003] KLR 125 , the Court defined a prima facie case as one which discloses an apparent infringement of rights requiring explanation.
16. The Applicants have raised serious allegations of:
• Fraud;
• Irregular alteration of statutory records;
• Disputed directorship changes;
• Denial of access to company records.
17. These allegations, if proved, could fundamentally affect the governance and ownership structure of the Company.
18. The Court therefore finds that a prima facie case has been established.
(C) Irreparable Injury
19. Under Nguruman Limited v Jan Bonde Nielsen (supra) , irreparable injury must be actual and substantial, not speculative.
20. The dispute concerns:
• Corporate control;
• Directorship;
• Shareholding structure;
• Access to financial records.
21. Alterations to company structure may permanently affect governance and shareholder rights in a manner not easily compensable by damages.
22. The Court finds that failure to preserve the status quo may occasion irreparable harm.
23. Accordingly, the balance of convenience favours maintaining the current position pending determination of the derivative suit.
(D) Leave to Institute Derivative Proceedings
24. Derivative actions are designed to enable a member to sue on behalf of the company where wrongdoing is alleged and those in control may not act in the company’s interest.
25. Given the prima facie case established and the seriousness of the allegations, the threshold for leave has been satisfied.
26. Prayer (d) had been allowed at the ex parte stage.
(E) Preservation Orders
27. To protect the integrity of the proceedings and prevent further alteration of the corporate structure:
• The 1st Respondent is restrained from altering statutory records, directorship, or shareholding.
• The 1st and 2nd Respondents are restrained from interfering with governance or financial affairs.
• The Registrar of Companies is directed not to effect further changes without leave of Court.
28. These orders are necessary to preserve the substratum of the dispute pending determination of the derivative suit.
(F) Costs
29. The application has substantially succeeded.
30. Costs are awarded to the Applicants.
7. FINAL ORDERS
Accordingly, the Court makes the following orders:
1. Prayer (b) Allowed.
2. Prayer (c) Allowed.
3. Prayer (d) Allowed. Leave had been granted to institute derivative proceedings.
4. Prayer (e) Allowed. Registrar restrained from effecting changes without leave of Court.
5. Prayer (f) Costs awarded to the Applicants
6. The suit to be expedited since leave had been granted early enough
8. CONCLUSION
The Court finds that serious allegations of fraud and governance irregularities have been raised. In the interests of justice, corporate stability, and preservation of the subject matter of the dispute, protective orders are warranted pending the hearing and determination of the derivative proceedings.
It is so ordered.
DATED, SIGNED AND DELIVERED AT MOMBASA THIS …13TH… DAY OF MAY………… 2026.
HON. LADY JUSTICE W. K. MICHENI
JUDGE