Tuwai Company Ltd - Application by Directors/Shareholders (ruling on joinder and freezing of company account)
The bottom line
#When directors sue over company funds, the company itself must be added as a party to the case.
What this practically means
#Executive summary
#Key legal issues
#Joinder of a necessary party under Order 1 rule 10(2)
Tuwai Company Ltd is a necessary party and the applicants are granted leave to enjoin it within 14 days
The court found that all parties except the 4th defendant are directors and/or shareholders of Tuwai Ltd, and the account they seek to freeze belongs to the company. Although widely mentioned, the company had not been made a party for unknown reasons. Its presence would help the court effectively settle the issues, especially given myriad suits touching the company within the court's jurisdiction.
Whether to decide the merits of the freezing application at this stage
The court declined to determine the merits until the company is on board
The court held that wading into the merits or demerits of the application would be premature before the necessary party is joined. However, to secure the interests of the parties and the company, it ordered a freezing of the account as a temporary measure pending hearing and further directions.
Legal principles established
#- A company whose account is sought to be frozen, and whose directors/shareholders are the litigating parties, is a necessary party whose presence enables the court to effectively and completely adjudicate upon all questions in the suit.
Court orders
#- 1.The applicants are granted leave to enjoin Tuwai Company Ltd as a defendant or as a plaintiff, whichever applies, within 14 days from the date of the ruling, and thereafter serve the defendants
- 2.Freezing of account number [particulars withheld] at Cooperative Bank Kitale Branch pending the hearing and determination of the application and/or further directions from the court
- 3.Costs in the cause
- Jurisdiction invoked
- Order 1 rule 10(2) of the Civil Procedure Rules (inherent power to add a necessary party)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Tuwai Company Ltd - Application by Directors/Shareholders (ruling on joinder and freezing of company account)", Case Analysis (2019). Application dated 14th January 2019 (High Court, Kitale). Source:
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.