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JudgmentKARATA DUME LIMITED VS IBIZA LIMITED21 min read

KARATA DUME LIMITED VS IBIZA LIMITED

High Court at Milimani High Court · · Moses Ado

Introduction
1. This ruling determines three interrelated applications, which arise from the interim orders issued on 3 April 2026 in respect of the Plaintiff’s application dated 31st March 2026, seeking, in the main, an interlocutory injunction against the Defendant temporarily restraining the use of “HELLO JUA”, which the Plaintiff contends is its registered trademark.

2. The interim orders of 3 April 2026 were in the terms that, pending the hearing and determination of the application of 31 March 2026, the Defendant was temporarily restrained, “……whether by itself, its directors, officers, servants, agents, employees, or otherwise howsoever, from hosting, marketing, advertising, promoting, or conducting any event or commercial activity under the name 'HELLO JUA' or any name, mark, or brand confusingly similar thereto.”

3. Following service of the orders for interim injunction, the Defendants, vide the application dated 3 April 2026, moved the Court seeking orders, inter alia, to set aside, discharge, vary or stay the ex parte injunction issued on 3 April 2026. The application is founded on the contention that the injunction was improperly granted, causes substantial commercial prejudice, and ought not to remain in force pending the hearing of the suit.

4. The Plaintiff thereafter filed an application dated 6 April 2026, seeking orders that the Defendants be cited and punished for contempt of court on the ground that, despite having actual knowledge of the injunction issued on 3 April 2026, they proceeded to organise and hold the HELLO JUA MORNING PARTY on 5 April 2026 and continued using and promoting the impugned mark. The Plaintiff further sought consequential relief, including coercive sanctions to compel compliance with the Court's orders.

5. The Plaintiff also filed a further application dated 20 May 2026, complaining of continuing acts of non-compliance after the filing of the contempt proceedings. In that application, it seeks additional preservatory and enforcement orders, including the order for police assistance, and that the Defendant be compelled to deposit security for damages in the sum of Kshs. 50,000,000/=, contending that the Defendants continued to advertise, market and exploit the impugned mark notwithstanding the subsisting injunction.

6. The three applications are inextricably connected. The determination of one necessarily affects the others. For that reason, this Court on 18th May 2026 heard all the applications together (by way of written submissions) and reserved one composite ruling, addressing the three applications.

7. I have considered the pleadings, affidavits, the voluminous annexures, the rival written submissions and the authorities cited by counsel. I am grateful to counsel for the industry reflected in their respective submissions. While I have considered every argument advanced, I do not propose to reproduce them verbatim. It is neither necessary nor desirable to rehearse every submission. Where appropriate, I shall refer only to those matters material to the determination of the issues before the Court.

The Parties’ Respective Arguments

8. The Plaintiff's case is straightforward. It contends that it is the registered proprietor of the trademark "HELLO JUA" in Kenya and that the mark has, through continuous commercial use since August 2022, acquired substantial goodwill and reputation within the East African entertainment industry. It maintains that the Defendants adopted not only the identical dominant words constituting the mark but also appropriated the Plaintiff's distinctive commercial concept of sunrise entertainment events. It therefore alleges infringement of its statutory trademark rights, passing off and unlawful interference with its goodwill.

9. The Plaintiff further contends that after this Court granted interim injunctive orders on 3 April 2026, the Defendants acquired actual knowledge of those orders but nevertheless proceeded to organise and host the event scheduled for 5 April 2026 under the restrained mark.

10. According to the Plaintiff, that conduct constituted a deliberate and conscious defiance of the authority of the Court. It also alleges that subsequent advertisements, continued physical branding and further promotional activities demonstrate an ongoing contempt of court. The Plaintiff consequently seeks orders finding both the corporate Defendant and its director guilty of contempt together with consequential sanctions.

The Defendants Case

11. The Defendants take an entirely different view. They dispute that the Plaintiff enjoys the exclusive rights asserted over the impugned mark and deny that their event infringes the Plaintiff's trademark or constitutes passing off. They contend that the parties' events differ materially in concept, branding and presentation and that the Plaintiff has overstated the scope of its proprietary rights.

12. The Defendants also challenged the continuation of the interlocutory injunction issued on 3 April 2026. They submit that the ex parte orders were obtained without full disclosure of the material facts and that they occasion disproportionate commercial prejudice. They therefore invite the Court to discharge, vary or stay those orders pending the hearing of the suit.

13. Concerning the contempt application, the Defendants deny deliberate disobedience of the Court's orders. They contend that some of the material relied upon by the Plaintiff comprises historical online content or automatically generated digital publications which cannot properly be characterised as fresh acts of promotion undertaken after issuance of the injunction. They further argue that contempt proceedings, being quasi-criminal in nature, require strict proof and that the Plaintiff has failed to discharge that burden.

Analysis and Determination

14. Having considered the pleadings, affidavits, annexures, written submissions and the authorities cited, the court finds the following substantive issues as arising for determination.

i. Whether the Defendant has established sufficient grounds for the discharge, variation or setting aside of the interlocutory injunction issued on 3 April 2026.

ii. Whether the Plaintiff has proved, to the requisite standard, that the Defendants are guilty of civil contempt of that order.

iii. Whether the 2nd Defendant is liable for the contemptuous acts (if established) of the 1st Defendant

iv. If contempt is established, what would be the appropriate sanction

Whether the Interim Injunction should be Discharged, Varied or Set Aside

15. The first issue for determination is whether the Defendant has established sufficient grounds to warrant the discharge, variation or setting aside of the interlocutory injunction granted by this Court on 3 April 2026.

16. The Defendants, in support of their application, submitted that the interim injunction ought to be discharged because it was granted ex parte, occasions substantial commercial prejudice and, in its view, was obtained without full disclosure of all material facts.

17. The Plaintiff, on its part, contends that the Defendant in its application for variation or discharge of the orders has demonstrated none of the recognised grounds for setting aside an interlocutory injunction.

18. The jurisdiction of the Court to grant interlocutory injunctions is conferred by Order 40 Rules 1 and 2 of the Civil Procedure Rules, which empower the Court to preserve the subject matter of litigation where there is a danger that the property in dispute may be wasted, damaged, alienated or where it is otherwise just and convenient to grant interim relief pending the determination of the suit.

19. The Court's power to vary or discharge an interlocutory injunction is an incident of that jurisdiction. It is a discretionary power which must be exercised judicially and upon settled principles.

20. The principles governing the grant of interlocutory injunctions were stated in Giella v Cassman Brown & Co. Ltd [1973] EA 358, where Spry V-P held that an applicant must establish: a prima facie case with a probability of success; that unless the injunction is granted he stands to suffer irreparable injury which would not adequately be compensated by an award of damages; and if the Court is in doubt, the matter should be determined on the balance of convenience.

21. The Court of Appeal in Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] KLR 125, defined a prima facie case as one which, on the material presented, discloses a right apparently infringed so as to call for an answer from the opposite party.

22. Subsequently, in Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR, the Court of Appeal emphasized that the three limbs in Giella are sequential rather than cumulative. Unless a prima facie case is established, the Court need not proceed to consider irreparable injury or the balance of convenience.

23. However, where a party seeks to discharge the temporary ex-prate injunctive orders issued by the Court (as in the present case), it must of necessity be demonstrated that the continued existence of those temporary injunctive orders would occasion hardship to the other party, and that having the Court exercise its discretion to have the orders discharged, or otherwise varied, would be necessary to serve the ends of justice. In Shah v Mbogo & Another [1967] EA 116, Harris J stated that the Court's discretion exists:

"...to avoid injustice or hardship resulting from accident, inadvertence or excusable mistake or error, but is not designed to assist a person who has deliberately sought, whether by evasion or otherwise, to obstruct or delay the course of justice."

24. Similarly, in Patel v East African Cargo Handling Services Ltd [1974] EA 75, the former East African Court of Appeal held that the discretion to set aside ex parte orders is unfettered but must be exercised upon such terms as are just, with the overriding objective of doing justice between the parties.

25. The Court of Appeal reaffirmed those principles in CMC Holdings Ltd v Nzioki [2004] 1 KLR 173, observing that the discretion must be exercised to avoid injustice and that the Court should consider all the circumstances of the case. The Court was clear that:

“……discretion must be exercised upon reasons and must be exercised judiciously… In law, the discretion that a court of law has, in deciding whether or not to set aside an ex-parte order was meant to ensure that a litigant does not suffer injustice or hardship as a result of amongst others an excusable mistake or error. It would not be proper use of such discretion if the court turns its back to a litigant who clearly demonstrates such an excusable mistake, inadvertence, accident or error. Such an exercise of discretion would be wrong principle.”

26. While the Court appreciates that the above authorities concerned the setting aside of ex parte judgments, the same equitable principles apply with equal force to interlocutory injunctions obtained without hearing the opposing party.

27. Applying the above principles to the present case, and having carefully considered the record, I am unable to conclude that the Defendant has discharged that burden.

28. First, no evidence has been placed before the Court demonstrating that the Plaintiff deliberately concealed material facts from the Court when obtaining the ex parte injunction. While the Defendant disputes the merits of the Plaintiff's trademark claim, those disputes concern the substantive suit rather than the propriety of the interlocutory order.

29. Secondly, the Defendant's principal complaint concerns the commercial consequences of the injunction. It points to advertising expenditure, contractual commitments and preparations undertaken before the order was issued. These are inevitable consequences of an ex parte interlocutory injunction. Were inconvenience alone sufficient to justify discharge, interlocutory injunctions would seldom fulfil their preservatory function.

30. Accordingly, I find no basis for interfering with the orders issued on 3 April 2026. The Defendant's application to discharge, vary or set aside the injunction therefore fails.

Whether the Plaintiff has established contempt on the Part of the Defendants

31. Having found that the interlocutory injunction issued on 3 April 2026 remains valid and binding, the next thing to consider is whether the Plaintiff has established that the Defendants are guilty of contempt of that order.

32. Order 40 Rule 3 of the Civil Procedure Rules, which provides for the jurisdiction of this Court to punish for civil contempt, states as follows:

“Consequence of breach [Order 40, rule 3]

(1) In cases of disobedience, or of breach of any such terms, the court granting an injunction may order the property of the person guilty of such disobedience or breach to be attached, and may also order such person to be detained in prison for a term not exceeding six months unless in the meantime the court directs his release.

(2) No attachment under this rule shall remain in force for more than one year, at the end of which time, if the disobedience or breach continues, the property attached may be sold, and out of the proceeds the court may award such compensation as it thinks fit, and shall pay the balance, if any, to the party entitled thereto.

(3) An application under this rule shall be made by notice of motion in the same suit.”

33. It is clear from the above that the rule provides that where an injunction has been disobeyed the Court may order attachment of property and may also commit the contemnor to prison for a period not exceeding six months.

34. The rule is complemented by section 63(c) of the Civil Procedure Act, which empowers the Court, in order to prevent the ends of justice from being defeated, to grant temporary injunctions and, in cases of disobedience, commit the person guilty thereof to prison and order attachment of property.

35. Further under Section 3A of the Civil Procedure Act, the Court also retains its inherent jurisdiction to make such orders as may be necessary for the ends of justice and to prevent abuse of the process of the Court.

36. It is settled law that parties are under an obligation to obey court orders. In Econet Wireless Kenya Ltd v Minister for Information & Communication & Another [2005] 1 KLR 828, Ibrahim J (as he then was), cited with approval the English decision in HADKINSON –V- HADKINSON (1952) 2 All ER. 567, where it was stated that:

“It is plain and unqualified obligation of every person against or in respect of, who an order is made by a court of competent jurisdiction to obey it unless and until that order is discharged. The uncompromising nature of this obligation is shown by the fact that it extends even to cases where the person affected by an order believes it to be irregular or even void.”

37. In Samuel M.N. Mweru & Others v National Land Commission & 2 Others [2020] eKLR, the High Court (Mativo J – as he then was) distilled four essential ingredients which an applicant must establish before contempt can be found. The Court was clear that:

i. there must exist a clear and unambiguous court order;
ii. the alleged contemnor must have knowledge of that order;
iii. the alleged contemnor must have breached the order; and
iv. such breach must have been deliberate.

38. Regarding the burden and standard of proof in contempt proceedings, the law is that the burden of proving every element/ingredient of contempt rests on the person alleging, and that the standard of proof must be higher than proof on a balance of probabilities, but not as high as beyond reasonable doubt.

39. The Court of Appeal in Mutitika v Baharini Farm Ltd [1985] KECA 60 (KLR), held that because contempt may result in deprivation of liberty, the standard of proof must be higher than proof on a balance of probabilities, almost but not exactly beyond reasonable doubt. The Court was clear that:

“In our view the standard of proof in contempt proceedings must be higher than proof on the balance of probabilities, almost but not exactly, beyond reasonable doubt. We envisage no difficulty in courts determining the suggested standard of proof. The standard of proof beyond reasonable doubt ought to be left where it belongs, to wit, in criminal cases. It is not safe to extend it to offence which can be said to be quasi – criminal in nature Winn LJ on page 1064 was in our view right in saying that the guilt has to be proved.”

40. The Supreme Court in Republic v Ahmad Abolfathi Mohammed & Another [2018] eKLR, reaffirmed that approach in Mutitika (supra) observing that proceedings carrying penal consequences require strict observance of procedural fairness and careful evaluation of the evidence before adverse findings are made. The Court clarified as follows:

“The rationale for this standard is that if cited for contempt, and the prayer sought is for committal to jail, the liberty of the contemnor will be affected. As such, the standard of proof is higher than the standard in civil cases. This power, to commit a person to jail, must be exercised with utmost care, and exercised only as a last resort. It is of utmost importance, therefore, for the respondents to establish that the alleged contemnor’s conduct was deliberate, in the sense that he or she willfully acted in a manner that flouted the Court Order.”

41. Having set out the above legal framework, I now turn to consider whether each of the ingredients has been sufficiently proven.

i. Whether there was in place a clear and unambiguous Court Order

42. It is not controverted that the Court issued an injunction on 3 April 2026 restraining the Defendants from using, advertising, marketing, promoting or conducting any event under the name "HELLO JUA" or any confusingly similar mark pending the hearing and determination of the Plaintiff's application.

43. It is equally not in dispute that the order was formally extracted and carried an express penal notice warning of the consequences of non-compliance. It is further clear from the record that the terms of the order are neither vague nor uncertain. As a matter of fact, no such claim has been raised by the Defendants.

44. I therefore find that the first ingredient has been established

ii. Whether the Defendants had knowledge of the order.

45. The Plaintiff contended that notwithstanding full knowledge of the injunction, the Defendants deliberately proceeded to organize and host the HELLO JUA MORNING PARTY on 5 April 2026 and thereafter continued promoting and advertising similar events in defiance of the Court's orders.

46. In support of the argument, the Plaintiff exhibited evidence of electronic service through the Judiciary Case Tracking System, email correspondence, WhatsApp transmission and a subsequent affidavit of service.

47. Further, the Court notes from the record that immediately after the order was made, the Defendants instructed counsel, entered appearance and filed an application seeking stay of the same orders.

48. In Shimmers Plaza Limited v National Bank of Kenya Limited [2015] eKLR, the Court of Appeal reaffirmed that knowledge of a court order supersedes personal service, and that once a party has actual knowledge of an order, that party is under an obligation to obey it unless and until it is discharged. The Court, citing with approval Lenaola J (as he then was) in the case of Basil Criticos Vs Attorney General and 8 Others [2012] eKLR, pronounced himself as follows:-

“...the law has changed and as it stands today knowledge supersedes personal service......where a party clearly acts and shows that he had knowledge of a Court Order; the strict requirement that personal service must be proved is rendered unnecessary.”

49. Arising from the foregoing, the Court is satisfied that actual knowledge has been conclusively established.

iii. Whether there was a breach of the Court Order of 3 April 2026
iv. Whether the breach was deliberate and willful

50. I propose to deal with the two ingredients together given their interrelatedness.

51. Unlike the first two ingredients, the question of whether there was breach and whether that breach was deliberate and willful are vigorously contested.

52. The Plaintiff relied upon several categories of evidence including screenshots of advertisements published after issuance of the injunctive order, WhatsApp communications, Instagram posts, photographs, videos, certificates of electronic evidence and financial documents said to demonstrate that notwithstanding the injunction, the Defendants proceeded to host the "HELLO JUA MORNING PARTY" on 5 April 2026 and thereafter continued advertising similar events.

53. The Defendants, on the other hand, challenged both the admissibility and probative value of that evidence, contending that some of the material comprises historical publications, automatically generated social media content or cached digital material incapable of constituting fresh acts of promotion after issuance of the injunction.

54. Regarding the event of 5 April 2026, the Plaintiff exhibited promotional material preceding the event together with financial records allegedly generated immediately thereafter. Those financial records indicate that the event proceeded notwithstanding the existence of the injunction and record substantial turnover for that day.

55. The Court notes that the financial records adduced by the Plaintiff in support of the activities of 5 April 2026 were also adduced by the Defendant and indeed formed the basis of the Defendants’ application seeking stay/variation of the temporary injunctive order issued by the Court on 3 April 2026.

56. The Defendants in their application for stay/variation/ vacation of the temporary injunctive order argued that cancelling the event of 5 April 2026 would occasion them substantial financial loss. While the claim for financial loss might be true, it must always be remembered that commercial inconvenience alone cannot of itself justify disobedience of a lawful court order.

57. The administration of justice depends upon the principle that court orders are obeyed unless and until varied or discharged. In Shimmers Case (Supra), the Court of Appeal stated that:

“It is our view that there was nothing ambiguous about the said order and it should have been complied with. Given the outcome of the appeal, the respondent would not have lost anything by the compliance. And, even if the appeal had gone the other way, and notwithstanding whatever losses the respondent would have incurred once the order of status quo was made, it just had to be obeyed.”

58. The Court further went on, stating that:

“It cannot be gainsaid that the duty to obey the law by all individuals and institutions is paramount in the maintenance of the rule of law, good order and the due administration of justice.”

59. If parties were permitted to disregard orders because compliance proved expensive or commercially inconvenient, the authority of the Court would be reduced to a matter of individual choice.

60. In the premises, the Court finds that there is compelling evidence that the Defendants knowingly proceeded with the event of 5 April 2026 notwithstanding the subsisting injunction, and therefore acted in breach of that order by the Court.

61. The Court, however, takes a different view regarding the several other additional acts of contempt allegedly committed by the Defendants after the 5 April 2026 event.

62. The Plaintiff in its further affidavits exhibited screenshots and photographs said to demonstrate continued use of the restrained mark. The Court, however, notes that some of the evidence relates to social media activity whose origin and timing remain disputed.

63. Contempt findings cannot rest upon inference where competing explanations remain reasonably available. As correctly submitted by the Defendants, the Court takes judicial notice that the digital platforms frequently preserve historical publications, generate automated content and recirculate archived material without direct human intervention.

64. It therefore follows that the mere continued accessibility of online content does not, of itself, establish a fresh act of publication.

65. Accordingly, I am not prepared, at least at this stage, to treat every publication exhibited as constituting an independent act of contempt unless the evidence clearly demonstrates that it was deliberately published or republished after issuance of the injunction. No act of such deliberate actions on the part of the Defendants has been proven in the present case.

66. The above, however, does not extend to the photographs showing physical branding displaying the words "HELLO JUA" within the Defendant's premises after the injunction was issued.

67. Unlike digital content, physical signage ordinarily remains under the direct control of the occupier of the premises. Ordinarily, this would have attracted an independent finding of contempt. However, due to the fact that the Plaintiff’s affidavit was sworn only a few days after the issuance of the Court order of 3 April 2026, the Court is prepared, at least at this stage, to treat it as an act of delayed compliance, rather than an act of contempt.

68. The upshot of the foregoing is that the Court finds that there was a breach of the Court order of 3 April 2026, and that the breach was deliberate and willful, but only in relation to the event of 5 April 2026.

Whether the 2nd Defendant is liable

69. The Defendants argued that the 2nd Defendant, a director of the 1st Defendant, was not personally liable for the contemptuous actions of the 1st Defendant, even where one is established on the part of the 1st Defendant. They maintained that the company is a separate legal entity and that the director should not be held personally liable for acts undertaken by the company.

70. The Court readily accepts the arguments regarding the separate legal personality of a limited liability company, as established in Salomon v A. Salomon & Co. Ltd [1897] AC 22. However, contempt proceedings occupy a distinct position.

71. A company acts only through natural persons. It therefore follows that in contempt proceedings against a company, the directors and other officers, who are the controlling mind and soul of the company, would equally be liable for the contemptuous acts of the company where one is established, and where such officers/directors fail to adduce evidence of the efforts they made in ensuring compliance.

72. The Court in Oilfield Movers Limited v Zahara Oil & Gas Limited [2020] eKLR, recognised this principle and held that directors who knowingly cause a company to disobey a court order cannot hide behind the corporate veil.

73. In the present case, no evidence has been placed before Court by the 2nd Defendant suggesting that the event proceeded contrary to his instructions or without his authority.

74. In any event, in the present case, the terms of the injunctive orders of 3 April 2026 were clear and expressly bound the company together with its directors, officers, servants or agents. Specifically, the Order restrained the Defendant “……whether by itself, its directors, officers, servants, agents, employees, or otherwise howsoever, from hosting, marketing, advertising, promoting, or conducting any event or commercial activity under the name 'HELLO JUA' or any name, mark, or brand confusingly similar thereto.”

75. Accordingly, the Court, on the evidence before the Court, is satisfied that the 2nd Defendant is equally liable for the established contemptuous acts of the 1st Defendant.

The appropriate sanctions

76. Having found that contempt has been established, the remaining question concerns the appropriate sanction.

77. The Plaintiff urged the Court to commit the 2nd Defendant to civil jail, attach the assets of the 1st Defendant and require the deposit of Kshs. 10,000,000 as security.

78. The Court declines to adopt that course at this stage. Although Order 40 Rule 3 empowers the Court to order attachment and imprisonment, those sanctions are discretionary and must be exercised proportionately.

79. It is settled law that Civil contempt jurisdiction is principally coercive rather than punitive, with the primary purpose being to secure compliance with court orders.

80. Punishment becomes necessary only where coercive measures have proved ineffective or where the contemnor demonstrates persistent defiance of the Court's authority.

81. For the foregoing reasons, I find it reasonable, in the circumstances of this case, to make the following final orders:

i. The Defendants' application seeking to discharge, vary or set aside the interim injunction issued on 3 April 2026 is dismissed.

ii. The Plaintiff’s application dated 6 April 2026 is allowed, but only to the extent that the Court finds that the Plaintiff has established that the 1st Defendant and the 2nd Defendant are liable for civil contempt of the orders issued on 3 April 2026.

iii. The Defendants shall, within seven (7) days of today's date, fully comply with the Court's orders of 3 April 2026 and file an affidavit setting out the steps taken to purge the contempt.

iv. The matter shall therefore be mentioned before the Deputy Registrar on 28 July 2026 for compliance with condition (iii) above.

v. Mention for mitigation and meting of appropriate sanctions on 23 September 2026.

vi. The Defendants shall bear the costs of the application seeking to discharge or vary the injunction and the Plaintiff's contempt application.

82. It is so ordered.

DATED, SIGNED, AND DELIVERED AT NAIROBI
THIS 9TH DAY OF JULY 2026

HON. MR. JUSTICE MOSES ADO
Judge of the High Court

In the Presence of:
Moses C/A
……………… for the Applicant
……………for the Respondent
    KARATA DUME LIMITED VS IBIZA LIMITED KARATA DUME LIMITED VS IBIZA LIMITED