Mackinnon Road Dokata Ranching Company Limited v Muktar Sheikh Mohamed & 7 others [2022] KEELC 232 (KLR)
The bottom line
#A Kenyan court dismissed a company's land injunction because the people who filed the suit could not prove they had the company's authority to sue.
What this practically means
#Executive summary
#Key legal issues
#Authority to file suit on behalf of a company
The suit was not shown to have been properly authorised: the CR 12 did not disclose the members or shareholding, the AGM resolution was doubtful, and the signatories to the authority to file suit were not shown to be directors, secretary or members
The CR 12 showed only directors, not members or shareholding, so the court could not tell who could constitute an AGM and pass a binding resolution. The authority to file suit was signed by Belewa Chiwaya and Abbas Ngalaa Ngedzo, neither of whom appeared in the CR 12 as director or secretary. Belewa Chuphi described himself as Managing Director although the minutes named Chiwaya Chuphi as Managing Director. There was therefore no demonstrated mandate to file suit.
Prima facie case for interlocutory injunction
No prima facie case with a probability of success was established because of doubt as to the veracity of the suit itself
Because a threshold challenge to the plaintiff's authority to sue had been raised, the court first had to be satisfied that the case was properly in court. Given the doubts over membership, the resolution and the signatories to the authority, the court could not find a prima facie case, and the injunction application had to be dismissed with the plaintiff left to prove its case at the hearing.
Proper constitution and existence of the company
The court raised, but left open, questions whether the company properly exists given that the original subscribers died with no succession/transmission of shares, leaving directors apparently appointed without members
The original subscribers Kauli Stungurube and Chuphi Ngalaa were said to be deceased with no grants of administration taken out and no transmission of shares. The court observed the anomaly of a company with directors but no members and invited interested persons to regularise the company's affairs, noting that a company not properly constituted leaves its property open to abuse.
Legal principles established
#- A limited liability company is a separate legal entity from its members
- A company can only act through its organs and/or authorised agents, principally the General Meeting of members and the Board of Directors
- A prima facie case cannot be established where there is serious doubt whether the suit was properly authorised by the plaintiff
Court orders
#- 1.The application for injunction was dismissed
- 2.On costs: if the plaintiff does not succeed in the main suit, the costs of the application to be paid personally by Belewa Chuphi; if the plaintiff succeeds, no orders as to the costs of the application
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court over land (injunction application in a land suit)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mackinnon Road Dokata Ranching Company Limited v Muktar Sheikh Mohamed & 7 others [2022] KEELC 232 (KLR)", Case Analysis (2022). Not stated in the judgment (suit commenced by plaint filed 27 May 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/232/eng@2022-04-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.