.
1. Background
The 1st Respondent seeks to set aside the orders issued on 15th January 2026.
By his supporting affidavit sworn on 23rd January 2026, he deposes that he is a director of the 2nd Respondent and that the Petitioner had filed an application dated 18th December 2025 seeking, inter alia, injunctive orders restraining him from accessing the 2nd Respondent’s bank account number 6031914164002 held at Kingdom Bank.
That on 12th January 2026, this Court directed service of the application upon the Respondents by close of business and the filing of responses by 14th January 2026. He further contends that he was served on 14th January 2026 with incomplete documents lacking proper citation and a hearing notice, and that he only obtained the complete and correct documents after the Court had already delivered its ruling on 15th January 2026.
He therefore argues that he was denied a fair opportunity to respond, and that the orders were obtained in circumstances that prejudice him and threaten the continued operations of the 2nd Respondent.
2. Response by the Petitioner
In opposition, the Petitioner, also a director and shareholder of the 2nd Respondent, contends that the application is misleading and an abuse of process.
He denies any defect in service and maintains that the 1st Respondent was aware of the proceedings. He further argues that any alleged delay did not prejudice the 1st Respondent, who is an insider within the company and thus privy to its affairs.
The Petitioner asserts that the application giving rise to the orders of 15th January 2026 was filed to preserve company assets and client funds amid allegations of mismanagement, breach of fiduciary duty, and financial impropriety.
He further contends that the threshold for setting aside orders under Order 40 Rule 7 of the Civil Procedure Rules has not been met.
3. Issues for Determination
The Court identifies the following issues for determination:
a) Whether the orders issued on 15th January 2026 should be set aside;
b) what should happen to the 2nd respondent in the meantime?
c) Who should bear the costs?
4. Determination
The Court has carefully considered the application, affidavits, submissions, and authorities cited.
(a) Principles
The power to set aside interlocutory orders is discretionary and must be exercised judiciously in the interests of justice. Each case turns on its own facts, with the overriding consideration being fairness and due process.
(b) Issue of Service and Procedural Fairness
The central complaint raised by the 1st Respondent is that he was served with incomplete court documents, thereby denying him a fair opportunity to respond before the impugned orders were issued.
The Court has examined this issue with care. It is clear that the 1st Respondent’s position on incomplete service has not been satisfactorily rebutted by the Petitioner. There is no convincing affidavit of service or evidential material placed before the Court demonstrating that complete pleadings, citation, and supporting documents were duly served within the timelines directed by the Court.
The burden of proving proper and complete service lies squarely upon the party asserting compliance. In this case, that burden rests upon the Petitioner. That burden has not been discharged.
In the absence of proof of full and effective service, the Court is unable to conclude that the 1st Respondent was afforded a fair and meaningful opportunity to respond before the orders of 15th January 2026 were issued.
The Court further notes that the Petitioner appears to oscillate between asserting proper service and relying on alleged knowledge of the proceedings by the 1st Respondent. However, constructive knowledge, which was not proved, cannot cure defective or incomplete service, particularly where the Court had issued strict timelines tied to formal service.
A party cannot shift evidential positions or “move the goalposts” in an attempt to validate procedural gaps after the fact. The integrity of judicial process depends on strict adherence to service requirements, especially in interlocutory applications that may affect proprietary and managerial rights.
Accordingly, the Court finds that the failure to prove proper and complete service constitutes a fundamental procedural defect that materially affected the fairness of the proceedings. This alone is sufficient basis to interfere with the orders of 15th January 2026.
(c) Rival Allegations and Nature of Dispute
Both parties have accused each other of bad faith, mismanagement, and improper corporate conduct. The Court is effectively invited into a deeply fractured corporate relationship.
This is a classic case where the Court is drawn, metaphorically, into the wisdom of Solomon, being asked to determine control in circumstances of irreconcilable distrust.
At this interlocutory stage, it would be premature to impose rigid or final corporate governance structures that would effectively determine the dispute before evidence is fully tested. The Court’s primary duty at this stage is preservation of the subject matter, not final allocation of control.
The Court therefore urges the parties to reassess their entrenched positions, particularly as the matter proceeds towards scrutiny of accounts and financial records of the 2nd Respondent.
(d) Corporate Context and Judicial Intervention
The dispute arises in a corporate setting governed by fiduciary obligations under the Companies Act, 2015. While the general rule in Foss v Harbottle (1843) discourages judicial interference in internal company affairs, statutory exceptions permit intervention where there are allegations of oppression, mismanagement, or risk to company assets.
In the present case, the breakdown of trust between the directors is evident, and limited judicial supervision is necessary to preserve the company as a going concern pending determination of the petition.
5. Final Orders
Accordingly, the Court makes the following orders:
a) The orders issued on 15th January 2026 are hereby set aside and substituted with the following:
i. Pending hearing and determination of the petition, both the Petitioner and the 1st Respondent shall jointly manage the day-to-day affairs of the 2nd Respondent, including operation of its bank accounts and preservation of its business.
ii. Kingdom Bank Account No. 6031914164002 shall not process any transaction exceeding Kshs. 10,000 without a jointly signed written authorization from both parties or further order of this Court.
iii. Monthly statements of account shall be filed in Court detailing all transactions undertaken.
iv. An independent auditor shall be appointed. Each party shall, within 14 days, propose a qualified auditor, from which the Court shall select one. The auditor shall file a report within 60 days of appointment.
v. Each party shall deposit Kshs. 250,000 as security for the costs of the auditor.
vi. The matter shall proceed on a fast-track basis but the parties are advised to reconsider their hard-line positions as they are putting the company at risk.
b) Each party shall bear its own costs.
6. Conclusion
It is so ordered.
DATED, SIGNED AND DELIVERED AT MOMBASA THIS …22nd… DAY OF ………April….. 2026.
HON. LADY JUSTICE W. K. MICHENI
JUDGE
PRESENT
MR Ongere for the Respondent
Ms Keter for the Petitioner
Bebora court assistant
1. Background
The 1st Respondent seeks to set aside the orders issued on 15th January 2026.
By his supporting affidavit sworn on 23rd January 2026, he deposes that he is a director of the 2nd Respondent and that the Petitioner had filed an application dated 18th December 2025 seeking, inter alia, injunctive orders restraining him from accessing the 2nd Respondent’s bank account number 6031914164002 held at Kingdom Bank.
That on 12th January 2026, this Court directed service of the application upon the Respondents by close of business and the filing of responses by 14th January 2026. He further contends that he was served on 14th January 2026 with incomplete documents lacking proper citation and a hearing notice, and that he only obtained the complete and correct documents after the Court had already delivered its ruling on 15th January 2026.
He therefore argues that he was denied a fair opportunity to respond, and that the orders were obtained in circumstances that prejudice him and threaten the continued operations of the 2nd Respondent.
2. Response by the Petitioner
In opposition, the Petitioner, also a director and shareholder of the 2nd Respondent, contends that the application is misleading and an abuse of process.
He denies any defect in service and maintains that the 1st Respondent was aware of the proceedings. He further argues that any alleged delay did not prejudice the 1st Respondent, who is an insider within the company and thus privy to its affairs.
The Petitioner asserts that the application giving rise to the orders of 15th January 2026 was filed to preserve company assets and client funds amid allegations of mismanagement, breach of fiduciary duty, and financial impropriety.
He further contends that the threshold for setting aside orders under Order 40 Rule 7 of the Civil Procedure Rules has not been met.
3. Issues for Determination
The Court identifies the following issues for determination:
a) Whether the orders issued on 15th January 2026 should be set aside;
b) what should happen to the 2nd respondent in the meantime?
c) Who should bear the costs?
4. Determination
The Court has carefully considered the application, affidavits, submissions, and authorities cited.
(a) Principles
The power to set aside interlocutory orders is discretionary and must be exercised judiciously in the interests of justice. Each case turns on its own facts, with the overriding consideration being fairness and due process.
(b) Issue of Service and Procedural Fairness
The central complaint raised by the 1st Respondent is that he was served with incomplete court documents, thereby denying him a fair opportunity to respond before the impugned orders were issued.
The Court has examined this issue with care. It is clear that the 1st Respondent’s position on incomplete service has not been satisfactorily rebutted by the Petitioner. There is no convincing affidavit of service or evidential material placed before the Court demonstrating that complete pleadings, citation, and supporting documents were duly served within the timelines directed by the Court.
The burden of proving proper and complete service lies squarely upon the party asserting compliance. In this case, that burden rests upon the Petitioner. That burden has not been discharged.
In the absence of proof of full and effective service, the Court is unable to conclude that the 1st Respondent was afforded a fair and meaningful opportunity to respond before the orders of 15th January 2026 were issued.
The Court further notes that the Petitioner appears to oscillate between asserting proper service and relying on alleged knowledge of the proceedings by the 1st Respondent. However, constructive knowledge, which was not proved, cannot cure defective or incomplete service, particularly where the Court had issued strict timelines tied to formal service.
A party cannot shift evidential positions or “move the goalposts” in an attempt to validate procedural gaps after the fact. The integrity of judicial process depends on strict adherence to service requirements, especially in interlocutory applications that may affect proprietary and managerial rights.
Accordingly, the Court finds that the failure to prove proper and complete service constitutes a fundamental procedural defect that materially affected the fairness of the proceedings. This alone is sufficient basis to interfere with the orders of 15th January 2026.
(c) Rival Allegations and Nature of Dispute
Both parties have accused each other of bad faith, mismanagement, and improper corporate conduct. The Court is effectively invited into a deeply fractured corporate relationship.
This is a classic case where the Court is drawn, metaphorically, into the wisdom of Solomon, being asked to determine control in circumstances of irreconcilable distrust.
At this interlocutory stage, it would be premature to impose rigid or final corporate governance structures that would effectively determine the dispute before evidence is fully tested. The Court’s primary duty at this stage is preservation of the subject matter, not final allocation of control.
The Court therefore urges the parties to reassess their entrenched positions, particularly as the matter proceeds towards scrutiny of accounts and financial records of the 2nd Respondent.
(d) Corporate Context and Judicial Intervention
The dispute arises in a corporate setting governed by fiduciary obligations under the Companies Act, 2015. While the general rule in Foss v Harbottle (1843) discourages judicial interference in internal company affairs, statutory exceptions permit intervention where there are allegations of oppression, mismanagement, or risk to company assets.
In the present case, the breakdown of trust between the directors is evident, and limited judicial supervision is necessary to preserve the company as a going concern pending determination of the petition.
5. Final Orders
Accordingly, the Court makes the following orders:
a) The orders issued on 15th January 2026 are hereby set aside and substituted with the following:
i. Pending hearing and determination of the petition, both the Petitioner and the 1st Respondent shall jointly manage the day-to-day affairs of the 2nd Respondent, including operation of its bank accounts and preservation of its business.
ii. Kingdom Bank Account No. 6031914164002 shall not process any transaction exceeding Kshs. 10,000 without a jointly signed written authorization from both parties or further order of this Court.
iii. Monthly statements of account shall be filed in Court detailing all transactions undertaken.
iv. An independent auditor shall be appointed. Each party shall, within 14 days, propose a qualified auditor, from which the Court shall select one. The auditor shall file a report within 60 days of appointment.
v. Each party shall deposit Kshs. 250,000 as security for the costs of the auditor.
vi. The matter shall proceed on a fast-track basis but the parties are advised to reconsider their hard-line positions as they are putting the company at risk.
b) Each party shall bear its own costs.
6. Conclusion
It is so ordered.
DATED, SIGNED AND DELIVERED AT MOMBASA THIS …22nd… DAY OF ………April….. 2026.
HON. LADY JUSTICE W. K. MICHENI
JUDGE
PRESENT
MR Ongere for the Respondent
Ms Keter for the Petitioner
Bebora court assistant