RULING
Thrown away costs
1.The matter was coming up for ruling on 12.2.2026 in respect of the defendants’ notice of motion dated 20.4.2025 seeking termination of the arbitral proceedings commenced by the plaintiff, dismissal of the suit and that costs of the application and the suit be borne by the plaintiffs.
2.The plaintiff filed a notice of withdrawal dated 25.9.2025 under Order 25 Rule 1 of the Civil Procedure Rules wholly withdrawing the suit dated 17.5.2021 against the defendants with no orders as to costs.
3.The plaintiffs also filed a replying affidavit sworn by the 1st plaintiff on 26.9.2025. They indicated that they have elected to withdraw the suit in the spirit of good faith and to demonstrate their commitment to resolving the dispute amicably. They asserted that the withdrawal is not an admission that their case lacks merit but a gesture of goodwill aimed at allowing continued negotiations without the pressure of pending litigation.
4.The defendants had applied for the suit to be struck out, hence, the suit may be withdrawn.
5.However, the residual issue is; who should bear the costs of the suit.
6.The plaintiffs submitted that no costs should be awarded to either party as the parties have a long-standing business partnership. They stated that the 1st plaintiff is a shareholder of the 2nd defendant and an owner of 2 floors of Sifa Towers. They contended that awarding costs to either party would bring more divisions rather than promoting reconciliation.
7.Costs of any action, cause or other matter or issue shall follow the event unless the court shall for good reason otherwise order. Section 27 of the Civil Procedure Act
8.In Morgan Air Cargo Limited v Evrest Enterprises Limited [2014] eKLR, the court highlighted some of the factors that need to be considered in determining the issue of costs, as follows: -
“a. the conduct of the parties
b. the subject of litigation
c. the circumstances which led to the institution of the proceedings
d. the events which eventually led to their termination
e. the stage at which the proceedings were terminated
f. the manner in which they were terminated
g. the relationship between the parties and
h. The need to promote reconciliation amongst the disputing parties pursuant to Article 159 (2) (c) of the Constitution.”
9.I have considered the circumstances which led to the institution of the proceedings. The background is that the parties entered a joint venture agreement dated 26.3.2012 with the 1st plaintiff as the owner of the land and the 1st defendant as the developer.
10.There was a dispute regarding the alleged irregular exclusion of the 1st plaintiff, a former director of the 2nd defendant, from management of Sifa Towers, improper convening of meetings, purported appointment of additional directors and changes to the company’s register without his participation or consent.
11.Through a ruling dated 10.8.2021 in respect of the applications made by the defendants, the court stayed the proceedings pending arbitration.
12.There was no progress on the appointment of the arbitrator for a long period.
13.On 14.5.2024, the court directed that the parties agree on the arbitrator within 30 days or in default, the Chairman of the Chartered Institute of Arbitrators, Kenya Branch appoints one within 30 days.
14.On 7.5.2025, the court directed the plaintiffs to reply to the defendant’s dismissal application.
15.As of 22.9.2025, there were no replies. The court remarked: -
“Parties who set out to delay proceedings completely rout any favour from the court as well as from other parties. This is a classic case of a party taking unto self a veto power to frustrate all efforts by other shareholders/ directors. This court will not play into that parties’ trap.”
16.I am aware that, even where a matter did not proceed to hearing, the defendants have expended time and resources and may be entitled to costs. See Pacis Insurance Company Ltd v Francis Njeru Njoka [2018] eKLR
17.Nonetheless, I have considered that, parties are in a relationship whose preservation is paramount interest of the parties. I have also considered the circumstances of this case and the conduct of the defendants post the joint venture agreement. Thus, some nominal costs are merited.
Disposal
18.In the upshot. I order thrown away costs of KE. 10,000 to be paid to the defendants.
19.Orders accordingly.
Dated, signed and delivered at Nairobi through Microsoft Teams online application this 12th day February, 2026
----------------------
F. Gikonyo M
Judge
In the presence of: -
Nzeku 1st, 3rd, and 4th Defendant
Gitau for 2nd Defendant
Ms. Kamau for Plaintiffs
CA- Kinyua
Thrown away costs
1.The matter was coming up for ruling on 12.2.2026 in respect of the defendants’ notice of motion dated 20.4.2025 seeking termination of the arbitral proceedings commenced by the plaintiff, dismissal of the suit and that costs of the application and the suit be borne by the plaintiffs.
2.The plaintiff filed a notice of withdrawal dated 25.9.2025 under Order 25 Rule 1 of the Civil Procedure Rules wholly withdrawing the suit dated 17.5.2021 against the defendants with no orders as to costs.
3.The plaintiffs also filed a replying affidavit sworn by the 1st plaintiff on 26.9.2025. They indicated that they have elected to withdraw the suit in the spirit of good faith and to demonstrate their commitment to resolving the dispute amicably. They asserted that the withdrawal is not an admission that their case lacks merit but a gesture of goodwill aimed at allowing continued negotiations without the pressure of pending litigation.
4.The defendants had applied for the suit to be struck out, hence, the suit may be withdrawn.
5.However, the residual issue is; who should bear the costs of the suit.
6.The plaintiffs submitted that no costs should be awarded to either party as the parties have a long-standing business partnership. They stated that the 1st plaintiff is a shareholder of the 2nd defendant and an owner of 2 floors of Sifa Towers. They contended that awarding costs to either party would bring more divisions rather than promoting reconciliation.
7.Costs of any action, cause or other matter or issue shall follow the event unless the court shall for good reason otherwise order. Section 27 of the Civil Procedure Act
8.In Morgan Air Cargo Limited v Evrest Enterprises Limited [2014] eKLR, the court highlighted some of the factors that need to be considered in determining the issue of costs, as follows: -
“a. the conduct of the parties
b. the subject of litigation
c. the circumstances which led to the institution of the proceedings
d. the events which eventually led to their termination
e. the stage at which the proceedings were terminated
f. the manner in which they were terminated
g. the relationship between the parties and
h. The need to promote reconciliation amongst the disputing parties pursuant to Article 159 (2) (c) of the Constitution.”
9.I have considered the circumstances which led to the institution of the proceedings. The background is that the parties entered a joint venture agreement dated 26.3.2012 with the 1st plaintiff as the owner of the land and the 1st defendant as the developer.
10.There was a dispute regarding the alleged irregular exclusion of the 1st plaintiff, a former director of the 2nd defendant, from management of Sifa Towers, improper convening of meetings, purported appointment of additional directors and changes to the company’s register without his participation or consent.
11.Through a ruling dated 10.8.2021 in respect of the applications made by the defendants, the court stayed the proceedings pending arbitration.
12.There was no progress on the appointment of the arbitrator for a long period.
13.On 14.5.2024, the court directed that the parties agree on the arbitrator within 30 days or in default, the Chairman of the Chartered Institute of Arbitrators, Kenya Branch appoints one within 30 days.
14.On 7.5.2025, the court directed the plaintiffs to reply to the defendant’s dismissal application.
15.As of 22.9.2025, there were no replies. The court remarked: -
“Parties who set out to delay proceedings completely rout any favour from the court as well as from other parties. This is a classic case of a party taking unto self a veto power to frustrate all efforts by other shareholders/ directors. This court will not play into that parties’ trap.”
16.I am aware that, even where a matter did not proceed to hearing, the defendants have expended time and resources and may be entitled to costs. See Pacis Insurance Company Ltd v Francis Njeru Njoka [2018] eKLR
17.Nonetheless, I have considered that, parties are in a relationship whose preservation is paramount interest of the parties. I have also considered the circumstances of this case and the conduct of the defendants post the joint venture agreement. Thus, some nominal costs are merited.
Disposal
18.In the upshot. I order thrown away costs of KE. 10,000 to be paid to the defendants.
19.Orders accordingly.
Dated, signed and delivered at Nairobi through Microsoft Teams online application this 12th day February, 2026
----------------------
F. Gikonyo M
Judge
In the presence of: -
Nzeku 1st, 3rd, and 4th Defendant
Gitau for 2nd Defendant
Ms. Kamau for Plaintiffs
CA- Kinyua