Mwilu (Suing as the Directorand Shareholder of Mikululo Ranching) v Nduulu (Environment & Land Case E009 of 2022) [2024] KEELC 4479 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Whether the suit is a derivative claim under Sections 238-240 of the Companies Act
The suit is not a derivative claim; the Plaintiff herself conceded this and pleaded personal reliefs
Section 238 defines a derivative claim as proceedings by a member in respect of a cause of action vested in the company and seeking relief on behalf of the company. The court observed that the Defendants simultaneously argued the suit was not derivative and that leave was required, which is contradictory. Parties are bound by their pleadings, and the Plaintiff conceded the suit was not derivative, pleading personal reliefs based on fraud by directors.
Whether absence of a board resolution invalidates the suit
No - failure to file a resolution is not fatal to the suit
Relying on Order 4 Rule 1(4) of the Civil Procedure Rules and the Court of Appeal decision in Leo Investment Ltd v Trident Insurance Company Limited, the court held that a board resolution may be filed at any time before the suit is fixed for hearing. The absence of a resolution at filing is not a ground for invalidating the suit.
Whether the suit is sub judice under Section 6 of the Civil Procedure Act
The objection fails because the Defendants did not annex the pleadings in the other suits to demonstrate that the issues are directly and substantially the same
Section 6 of the Civil Procedure Act bars trial of a suit where the matter in issue is directly and substantially in issue in a previously instituted suit between the same parties. However, the Defendants did not produce the pleadings in the cited suits (Makindu ELC E001 of 2022, ELC 55 of 2021, PMCC 394 of 2009, Nairobi Civil Appeal E58 of 2021) to establish the threshold.
Legal principles established
#- Failure to file a board resolution authorizing a company suit is not fatal, as such resolution may be filed any time before the suit is fixed for hearing.
- A preliminary objection must be on a pure point of law and cannot rest on disputed facts.
Court orders
#- 1.The preliminary objection dated 1st July 2022 is dismissed
- 2.Costs of the preliminary objection awarded to the Plaintiff
- Jurisdiction invoked
- Environment and Land Court jurisdiction; objection based on Sections 238, 239, 240 of the Companies Act, 2015 and Section 6 of the Civil Procedure Act
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Mohazo Ex-Impo Limited v Amri & 5 others (Environment and Land Case E013 of 2025) [2026] KEELC 617 (KLR)[2026] KEELC 617 (KLR)29 Jan 2026
- Mohazo Ex-Impo Limited v Amri & 5 others (Environment and Land Case E013 of 2025) [2026] KEELC 617 (KLR)[2026] KEELC 617 (KLR)29 Jan 2026followed
Cite this brief
#Cite this brief
Caselaw, "Mwilu (Suing as the Directorand Shareholder of Mikululo Ranching) v Nduulu (Environment & Land Case E009 of 2022) [2024] KEELC 4479 (KLR)", Case Analysis (2024). Makindu ELC (Suit number not stated in extract). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/4479/eng@2024-05-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.