Metro Plaza Limited v Dubai Bank Kenya Limited (in Liquidation) & 1 other
The bottom line
#The Court of Appeal confirmed that suing a bank in KDIC liquidation for contempt requires 30 days' advance notice to KDIC, and skipping that step killed the case.
What this practically means
#Executive summary
#Key legal issues
#Effect of KDIC liquidation on the legal character of a bank in liquidation
KDIC's assumption of control under section 45 of the Kenya Deposit Insurance Act changes the institution's legal character; KDIC acts as agent of the institution and controls its assets and affairs, so contempt proceedings against the institution engage section 30(2) of the Contempt of Court Act as proceedings against a State corporation.
Section 45 of the Kenya Deposit Insurance Act vests all powers of the institution and its directors in KDIC or the appointed person during the period of control; directors may not act except as authorized by the Corporation. Although KDIC acts as agent of the institution and does not assume its liabilities, an application against the institution in liquidation is in substance an application against KDIC, a State corporation, thus triggering the statutory notice requirement for contempt proceedings.
Mandatory pre-commencement notice in contempt proceedings against State corporations
Section 30(2) of the Contempt of Court Act mandatorily requires a notice of not less than 30 days to the accounting officer before contempt proceedings are commenced against a State organ or corporation; non-compliance renders the application incompetent.
Because punishment for contempt exercises ordinary criminal jurisdiction under section 5 of the Judicature Act, the procedure for instituting contempt proceedings must be scrupulously followed. The appellant issued no such notice, so the trial court was entitled to strike out the application; this was not an elevation of procedural technicality over substantive justice but a jurisdictional defect.
Whether the trial court erred in failing to determine all prayers in the contempt application
Once the application was found incurably defective for want of the mandatory notice, the court lacked jurisdiction to entertain the other prayers, including the prayer for cancellation of the auction sale, and did not err in striking the application out.
The notice requirement is a prerequisite under the Contempt of Court Act. Without it, the application was incurably defective and jurisdiction over the remaining prayers was absent. The striking out of the whole application was therefore a proper exercise of discretion and not a dismissal on a mere technicality causing loss of the suit property.
Applicability of the Contempt of Court Act after its declaration of unconstitutionality
The Act applies to contempt applications instituted before the declaration of unconstitutionality; rights and obligations are governed by the law as it stood when the alleged contempt was committed.
The court took judicial notice that the Contempt of Court Act was declared unconstitutional in Kenya Human Rights Commission v Attorney General, but the contempt application in this case predates that declaration. Retrospective invalidation does not apply, and section 30(2) governed the competence of these proceedings.
Legal principles established
#- Upon appointment of KDIC as liquidator, the legal character of an institution changes: its capacity to act independently is exhausted and control of its assets, operations and decision-making transfers wholly to KDIC, so an application against the institution is essentially an application against KDIC as a State corporation.
- Contempt proceedings against the accounting officer of a State corporation require a notice of not less than 30 days to the accounting officer before commencement; the notice requirement is mandatory given the criminal nature of contempt proceedings.
- Where a contempt application is incompetent for want of the mandatory notice, the court lacks jurisdiction to entertain the other prayers in the application.
- Rights and obligations in contempt proceedings are determined in accordance with the law as it stood at the time the alleged contempt was committed, notwithstanding a subsequent declaration of unconstitutionality of the applicable statute.
Court orders
#- 1.The appeal is dismissed
- 2.No order as to costs
- On appeal from
- High Court of Kenya
- Jurisdiction invoked
- First appellate jurisdiction over an appeal from the High Court (the memorandum of appeal dated 14th October 2019); no specific constitutional or statutory provision is cited as the basis of jurisdiction
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Metro Plaza Limited v Dubai Bank Kenya Limited (in Liquidation) & 1 other", Case Analysis (2026). Appeal from the ruling of the High Court delivered on 4th May 2018 (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1330/eng@2026-07-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.