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ELCDismissedNot stated in the judgment (application dated 15th August 2024)· [2026] KEELC 1656 (KLR)

London Distillers (K) Limited v Mavoko Water & Sewarage Company & 7 others (Environment and Land Case 104 of 2019) [2026] KEELC 1656 (KLR)

Environment and Land Court
24 March 2026
NMN.A. Matheka
2,975 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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A Kenyan court refused to force a defendant to deposit Kshs. 1 billion upfront, ruling that claims that a company cannot pay must be proven with real evidence, not just asserted.

What this practically means

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Executive summary

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The Plaintiff/Applicant, whose distillery operations feed pre-treated effluent into the EPZA main trunk sewer line, sued over the alleged destruction of its sewer line and theft of sewer pipes on 17th September 2019, claiming Kshs. 660,099,630 made up of repair costs and loss of production. By a notice of motion dated 15th August 2024 under Order 26 Rule 1, Order 39 Rules 1 and 5 and Order 51 of the Civil Procedure Rules, the Applicant sought an order compelling the 3rd Defendant/Respondent to deposit Kshs. 1,000,000,000 as security, plus an affidavit of means from its Managing Director, Zeyun Yang, and consequential orders. The Applicant argued that the Respondent was heavily indebted to financial institutions in sums exceeding Kshs. 2 billion, its property was subject to multiple charges and facing auction, and thus a decree might not be satisfiable. The Respondent opposed, describing itself as a going concern, characterising its financing disputes as unrelated, and invoking the public interest in environmental protection and the polluter-pays principle. The court identified a single issue: whether an order for security for costs could issue against the 3rd Defendant. Relying on established authorities, it held that security for costs is discretionary, that inability to pay must be proven and not merely alleged, and that poverty is not a sufficient ground for such an order. The court found the Respondent still a going concern, the financing disputes unrelated, and the applicant's evidential burden undischarged. The application was dismissed with costs abiding the outcome of the suit.

Key legal issues

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01

Whether security for costs should issue against the 3rd Defendant/Respondent

Holding

The application was dismissed because the applicant did not prove that the respondent would be unable to pay any decree, and the respondent was shown to be a going concern

Reasoning

The court applied Order 26 Rule 1 and the case law establishing that security for costs is discretionary. The applicant relied on the respondent's alleged indebtedness to financial institutions, but the court found those disputes unrelated and accepted the respondent's assertion that it remains a going concern. The evidential burden of proving inability to pay was therefore not discharged, and ordering security would be unfair given the defence is yet to be tested at trial.

p. 6
02

Whether the 3rd Defendant has a bonafide defence

Holding

The court, without delving into the merits, found it would be unfair to order security since the veracity of the defence can only be established at trial

Reasoning

Applying Shah v Sethi, the test is whether the defendant has a bonafide defence, but at the interlocutory stage the court should not assess the merits. The court perused the defence, noted that establishing its veracity requires evidence at the main trial, and concluded that ordering the sought security would be unfair in the circumstances.

p. 6

Legal principles established

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  • An order for security for costs is discretionary and must be exercised reasonably having regard to the circumstances of each case
  • A party seeking security for costs must prove, not merely allege, that the respondent would be unable to pay if unsuccessful
  • Poverty is not a sufficient ground for an order for security for costs

Court orders

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  1. 1.The application dated 15th August 2024 is dismissed
  2. 2.Costs shall abide the outcome of the suit

Authorities

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Legislation

  • Civil Procedure RulesOrder 26 Rule 1
  • Civil Procedure RulesOrder 39 Rule 1 & 5
  • Civil Procedure RulesOrder 51
  • Civil Procedure Act, Cap 21 Laws of KenyaSections 1A, 1B and 3A
  • Constitution of KenyaArticle 50

Cases cited (14)

  • Shah and others v Manurama Limited and others
    (2003) EA 294
  • Ahmed Kulimye Bin & 2 others v Kenya Revenue Authority & another
    (2012) eKLR
  • Cancer Investments Limited v Sayani Investments Limited
    (2010) eKLR
  • Shah v Sheti
    Civil Appeal No. 34 of 1981
  • Jayesh Hasmukh Shah v Narin Haira & another
    (2015) eKLR
  • Kenya Education Trust v Katherine S.M. Whitton
    Civil Appeal No 310 of 2009
  • Marco Trols & Explosive Limited v Mamunje Brothers Limited
    (1988) eKLR 730
  • Shakalanga Jirongo v the Board of National Social Security Fund
    HCC No 957 of 2000
  • Noornamohammed Abdullah v Ranchorbhai J. Patel
    (1962) EA 447
  • Keystone Bank Limited & 4 others v I&M Holdings Limited & another
    (2017) eKLR
  • Edermann Property Ltd v Kenya Commercial Bank
    Civ. Appl. No. Nai E042 of 2024
  • Edermann Property Ltd v Credit Bank
    Civ. Appl. No. Nai. E112 of 2024
  • Erdemann Property Ltd v Credit Bank Ltd
    COA Civil Application E175 of 2025
  • Mwita Francis & Others v EPL, and KCB
    Machakos HCCC No. E007 of 2024
Jurisdiction invoked
Orders 26 Rule 1, Order 39 Rule 1 & 5 and Order 51 of the Civil Procedure Rules; Sections 1A, 1B and 3A of the Civil Procedure Act, Cap 21

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "London Distillers (K) Limited v Mavoko Water & Sewarage Company & 7 others (Environment and Land Case 104 of 2019) [2026] KEELC 1656 (KLR)", Case Analysis (2026). Not stated in the judgment (application dated 15th August 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/1656/eng@2026-03-24

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.