Kingdom Bank Limited v Vazom Limited & another (Civil Suit E007 of 2024) [2024] KEHC 10077 (KLR) (25 June 2024) (Ruling)

Key Facts

Transaction Type

Issues

• The court determined whether the Defendants' removal of motor vehicles from Kenya was with the intent to dispose of them to evade justice, as alleged by the Applicant. The court found that the removal was for operational purposes and that the Applicant was aware of this prior to filing the application.
• The Applicant claimed the Respondents had not received the insurance policies for the motor vehicles, but the court observed that the issue was raised as an afterthought and found no evidence to confirm the policies were transmitted to the Respondents.
• The Applicant alleged that the tracking devices on the motor vehicles were tampered with, but the court noted no proof was advanced to support this claim and that the issue was introduced after the Responding Affidavit was filed, requiring resolution at a full hearing.
• The court evaluated whether the Applicant met the threshold for granting an injunction under Order 39 Rule 5, specifically regarding the requirement to demonstrate irreparable injury if the injunction was not granted. It concluded the Applicant failed to show that damages would be inadequate or that the Respondent could not pay.

Holdings

• The court directed the parties to comply with Order 11 to proceed with the hearing of the main suit, emphasizing the need for full evidence testing through cross-examination on disputed issues such as tracking devices and insurance policies.
• The court determined that the Applicant established a prima facie case but failed to demonstrate that the injury would be irreparable if the injunction is not granted. It concluded that the Applicant did not meet the threshold for granting the injunction orders sought, as they could not prove that damages recoverable in law would not be an adequate remedy or that the Respondent is incapable of paying.

Remedies

• The court directed the parties to comply with Order 11, paving the way for the hearing of the main suit. This includes procedural steps to ensure the case is ready for trial, with evidence to be tested through cross-examination as previously outlined in the ruling.
• The court denied the Applicant's request for an injunction to retain motor vehicles in its jurisdiction and to require the Defendants to furnish security. It ruled that the Applicant failed to demonstrate irreparable injury if the injunction was not granted and emphasized the need for a full hearing to test evidence. The court directed the parties to proceed with Order 11 to facilitate the main suit's hearing.

Contract Value

Legal Principles

• The court applied the 'prima facie' standard of proof, requiring the Applicant to show a legal right apparently infringed. The Applicant satisfied this threshold but did not meet the higher standard for irreparable injury.
• The court applied the principles for granting an interim injunction, requiring the Applicant to establish a prima facie case, demonstrate irreparable injury if the injunction is not granted, and show the balance of convenience favors granting the injunction. The Applicant met the prima facie case but failed to demonstrate irreparable injury, leading to the denial of the injunction.
• The Applicant bore the burden to prove a prima facie case and irreparable injury. While the prima facie case was established, the Applicant failed to demonstrate irreparable harm, which is a critical hurdle for interim injunctions.

Precedent Name

• Kenya Breweries Ltd & another v. Washington Okeyo
• Iko Solutions Ltd v. Mobile Positioning Africa Ltd
• International Air Transport Association & Another v. Akarim Agencies Company Limited & 2 Others
• Nation Media Group Ltd & 2 others v, John Harun Mwau
• Nguruman Limited versus Jan Bonde Nielsen & 2 others
• Moses Koech Rotich v Kenya Highways Authority
• Mrao Ltd Versus First American Bank of Kenya Ltd
• Beta Healthcare International Limited v Grace Mumbi Githaiga & 2 others
• Kenya Commercial Finance Co. Ltd V. Afraha Education Society
• Kanduyi Holdings Ltd v. Barma Kenya Foundation and another
• Martin Nyaga Wambora v. County Assembly of Embu & 2 others

Key Disputed Contract Clauses

• The court analyzed whether the loan agreement required the installation of tracking devices on the motor vehicles and trailers. The Applicant claimed the devices were fitted and tampered with, while the Defendants denied knowledge of such requirements and argued the issue was introduced post-hearing.
• The court examined the contractual obligation to deliver insurance policies for the financed vehicles. The Applicant alleged non-delivery hindered the Defendants' ability to use the assets, while the Defendants countered that the issue was raised as an afterthought without evidentiary support.

Cited Statute

• Civil Procedure Rules
• Civil Procedure Act

Judge Name

Passage Text

• The court declined to grant the prayers sought and directed parties to comply with Order 11 for the main suit hearing.
• The court could not locate the Further Affidavit referenced in the Applicant's submissions, undermining claims about trackers and insurance.
• The Applicant must satisfy the court that the injury will be irreparable if the injunction is not granted, which they failed to demonstrate.

Damages / Relief Type

• Injunction to retain motor vehicles KDN 895F, KDN 896F, KDN 897F and trailers ZH 2757, ZH 2771, ZH 2758 in court's jurisdiction pending suit determination
• Security deposit of Kshs. 26,069,460.88 as alternative relief