Automated Summary
Key Facts
The case involves FTG Holland, a Netherlands-incorporated company, suing AFAPack Enterprises Limited and AFA Chemicals Limited. The defendants counterclaimed €118,731.50 and sought security from the plaintiff, who operates via resellers in Africa with no known assets in Kenya. The court ruled that the plaintiff must provide security within 30 days via deposit or a Kenyan bank bond due to the foreign company's lack of local assets, and ordered the plaintiff to cover the defendants' costs. The decision balances the need to prevent potential absconding or non-payment while not prejudicing the trial outcome.
Issues
- Whether the motion for the arrest of the plaintiff's directors to show cause for furnishing security is appropriate, and whether the court should prioritize substantial justice over procedural technicalities in this context.
- Whether the court has the authority to require a foreign company plaintiff to furnish security for a counterclaim under Order 39 of the Civil Procedure Rules 2010, and whether the defendants' apprehensions about the plaintiff's ability to meet the counterclaim are justified given the plaintiff's domicile in Holland and lack of attachable assets in Kenya.
Holdings
- In default of furnishing security, the court directed that the plaintiff's movable property up to the value of €118,731.5 be attached and held under court order until the conclusion of the suit, at the plaintiff's expense.
- 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, either by depositing the amount in court or through a bond or bank guarantee from a reputable Kenyan bank. This was due to the plaintiff being a foreign company with no attachable assets in Kenya and failing to rebut the defendants' claims of potential absconding or inability to meet the counterclaim.
- The plaintiff was further ordered to pay the defendants the costs of the application, as per the court's ruling on 19th March 2013.
Remedies
- 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 bank guarantee (unlimited in time) issued by a reputable bank carrying on business in Kenya.
- The plaintiff shall pay the defendants the costs of this application.
- In default of furnishing security, the plaintiff's moveable properties to the value of €118,731.5 shall be attached and held to the order of the court at the plaintiff's expense until conclusion of the suit.
Legal Principles
The court emphasized that the burden of proof rests with the applicant seeking security, requiring them to demonstrate the plaintiff's potential to abscond or avoid meeting the counterclaim. The plaintiff's failure to rebut these averments supported the court's discretion to order security.
Precedent Name
- Parmex Limited Vs Austin and Partners
- Procon Limited Vs Provincial Building Company
- Korecha Vs Bank of Baroda
- Mama Ngina Kenyatta and another Vs Mahira Housing Company
- Cancer Investments Limited Vs Sayani Investments Ltd
- Sir Lindsay Parkinson & Company Ltd Vs Triplan Ltd
- Kuria Kanyoko t/a Amigos Bar & Restaurant Vs Francis Kinuthia Nderu
- Shah Vs Shah
Cited Statute
Civil Procedure Act
Judge Name
G.K. Kimondo
Passage Text
- The general rule is that security is normally required from plaintiffs resident outside the jurisdiction, but as was agreed in the court below, a court has a discretion, to be exercised reasonably and judicially, to refuse to order that security be given.
- 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 bank guarantee (unlimited in time) issued by a reputable bank carrying on business in Kenya.