Automated Summary
Key Facts
The court ruled that FTG Holland, a Netherlands-incorporated company with no known assets in Kenya, must furnish security of €118,731.5 (or equivalent in Kenyan shillings) within 30 days for the defendants' counterclaim. The security can be provided via deposit in court or a bond/guarantee from a Kenyan bank. The court emphasized the plaintiff's failure to demonstrate local assets or rebut the defendants' concerns about potential absconding.
Issues
- The court addressed whether a foreign plaintiff (FTG Holland) incorporated in the Netherlands and operating through resellers in Africa, with no known assets in Kenya, could be compelled to furnish security for the defendants' counterclaim of €118,731.5. The ruling emphasized the court's discretion under Order 39 to require security to prevent potential absconding or failure to meet obligations, citing precedents like Halsbury's Laws and Mama Ngina Kenyatta vs Mahira Housing Company.
- The court evaluated the plaintiff's failure to file a deposition rebutting the defendants' claims. The plaintiff conceded it trades through third-party resellers in Africa without demonstrating attachable assets in Kenya. The ruling noted this lack of evidence supported the defendants' apprehensions about the plaintiff's ability to satisfy the counterclaim, aligning with principles from Kuria Kanyoko vs Francis Kinuthia Nderu.
- The court considered the applicability of sections 1A, 1B, and 3A of the Civil Procedure Act to the motion for security. It concluded the motion was valid under these provisions, emphasizing the overriding objective of substantial justice over technicalities, as referenced in Shah vs Shah and Parmex Limited vs Austin and Partners.
Holdings
- In the event of default, the court directed that the plaintiff's movable properties up to the value of €118,731.5 be attached and held until the suit concludes. This was to ensure the counterclaim and costs are addressed, given the plaintiff's foreign operations and lack of local assets.
- The court ordered the plaintiff (FTG Holland) to furnish security in the sum of €118,731.5 or equivalent in Kenya shillings within 30 days via deposit, bond, or bank guarantee from a Kenyan bank. This was due to the plaintiff's foreign status, lack of assets in Kenya, and failure to rebut the defendants' concerns about potential absconding or inability to meet the counterclaim.
- The court ruled that the plaintiff must pay the defendants the costs associated with the application. This was a consequence of the plaintiff's failure to file a deposition to counter the defendants' allegations of potential absconding or non-compliance.
Remedies
- THAT in default the plaintiff's moveable properties to the value of that sum shall be attached and held to the order of the court, and at the plaintiff's expense, until conclusion of the suit.
- THAT the plaintiff shall within 30 days of the date hereof furnish security in the sum of € 118,731.5 or the equivalent in Kenya shillings by either depositing the sum in court or by a bond or bankguarantee (unlimited in time) issued by a reputable bank carrying on business in Kenya.
- THAT the plaintiff shall pay the defendants the costs of this application.
Legal Principles
- The court exercised its discretion under Order 39 to order the plaintiff to pay the defendants' costs of the application, citing the plaintiff's foreign status and failure to provide evidence of its ability to meet the counterclaim.
- The court emphasized that the burden of proof rests with the applicant to demonstrate the plaintiff's inability to meet the counterclaim, particularly noting the plaintiff's failure to rebut the defendants' averments regarding lack of attachable assets in Kenya.
Precedent Name
- Mama Ngina Kenyatta and another Vs Mahira Housing Company
- Kenya Education Trust Limited Vs Katherine S.M. Whittan
- Halsbury's Laws of England
- Procon Limited Vs Provincial Building Company
- Parmex Limited Vs Austin and Partners
- Sir Lindsay Parkinson & Company Ltd Vs Triplan Ltd
- Jismaji Vs Saheb and another
- Shah Vs Shah
- Kuria Kanyoko t/a Amigos Bar & Restaurant Vs Francis Kinuthia Nderu and 2 others
Cited Statute
- Civil Procedure Rules 2010
- Civil Procedure Act
Judge Name
G.K. Kimondo
Passage Text
- THAT the plaintiff shall within 30 days of the date hereof furnish security in the sum of € 118,731.5 or the equivalent in Kenya shillings by either depositing the sum in court or by a bond or bankguarantee (unlimited in time) issued by a reputable bank carrying on business in Kenya.
- The plaintiff is described as a company incorporated in The Netherlands. No evidence has then been provided to show that the plaintiff has any attachable assets in Kenya.
- The respondent has shot itself in the foot by failing to file a deposition to rebut those averments by the applicants.