Manchester Outfitters Limited v Galot Holdings Limited & 4 Others

in High Court Petition E027 of 2024 slated for 2nd October, 2026. iii. The costs of this application be in the cause. 2. In support of the Motion is the affidavit of Narendra Galot, the 5th Defendant herein. He deponed that he is a shareholder of the Plaintiff, having acquired shares by transmission from the estate of his late father, Lalchand Pusharam Galot and duly authorized to swear the affidavit on his own behalf and on behalf of Pradeep Galot, his coAdministrator. 3. He explained that the application seeks a stay of the proceedings pending the determination of the directorship of the Plaintiff in High Court Petition No. E027 of 2024, scheduled for 2nd October 2026. According to him, although the court had previously issued directions on the matter, the question of directorship remains unresolved. He contended that its determination will clarify the legal capacity of the parties and the competence of the witnesses appearing on behalf of the Plaintiff. 4. According to Mr. Narendra, the 5th Defendant was joined to the proceedings on 28th May 2026, shortly before the hearing on 2nd, 3rd and 4th June 2026, during which Pushpinder Singh Mann testified in the purported capacity of a director of the Plaintiff. Similarly, Avin Galot had sworn and filed various affidavits on record in the same capacity. ELC NO. 358 OF 2021 RULING 2

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5. He stated that the suit concerns the alleged fraudulent transfer of L.R. No. 24092 (Grant No. I.R. 79398) by the 3 rd and 4th Defendants without the knowledge of the Plaintiff’s directors; that the identity of the lawful directors is therefore central to determining who has authority to testify on behalf of the company regarding the alleged fraud and that the court had previously acknowledged that the matter could not proceed until the question of directorship was finally determined. 6. He therefore contended that it is necessary to await the Commercial Court’s determination on the directorship of the 1st Plaintiff, as that decision will clarify whether those individuals had the requisite locus standi to represent the company. In his view, proceeding before that question is resolved risks the court receiving evidence from persons who might subsequently be found not to be directors, thereby wasting judicial time and potentially undermining the validity of the proceedings and any resulting determination. 7. Also referenced are the orders issued by Mugambi J issued on 26th June 2026, in High Court Civil Case No. 55 of 2012, staying further hearing pending the determination of Petition No. E027 of 2024. He explained that Pushpinder Singh Mann, who had purported to testify on behalf of Manchester Outfitters Limited in that matter, was stood down for the same reason and that the parties thereafter appeared before the court on 2nd July 2026 to explore a possible resolution. ELC NO. 358 OF 2021 RULING 3

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8. He deponed that substantial progress has since been made regarding the Plaintiff’s shareholding and that the court determined the allocation of shares belonging to the estates of Mohan Galot and Lalchand Pusharam Galot and directed the Company Secretary and the Registrar of Companies to amend the relevant records accordingly. However, when the parties appeared before Mugambi J on 16th July 2026, they agreed only on the shareholding and remained sharply divided on the company’s directorship, which was reserved for determination on 2nd October 2026. 9. The 5th Defendant therefore maintained that the proceedings should be stayed until the Commercial Court determines the lawful directorship of the 1 st Plaintiff. It was deposed that the determination will establish whether the persons who had testified or sworn affidavits on the company’s behalf possessed the requisite locus standi. He concluded that no party would suffer prejudice from awaiting the ruling scheduled for 2nd October 2026. 10. The 3rd Defendant, Pravin Galot, swore an affidavit in support of the Motion dated 25th July, 2026. He stated that he was present before Mugambi J on 26th June 2026, when the court stayed the proceedings in High Court Civil Case No. 55 of 2012, involving the same Plaintiff, pending the determination of the directorship dispute in Petition No. E027 of 2024. He added that Pushpinder Singh Mann, who had been testifying on behalf of the Plaintiff in that matter, was stood down pending the court’s determination scheduled for 2nd October 2026. ELC NO. 358 OF 2021 RULING 4

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11. According to Mr. Pravin, Pushpinder Singh Mann had appeared before this court on 3rd June 2026, and described himself as a director of the Plaintiff by relying on a board resolution dated 12th April 2024. He disputed the validity of that resolution, contending that the company’s CR12 forms dated 19th and 27th April 2024, together with its annual return, identified Mohan Galot as its sole director at the material time. 12. Mr. Pravin also contended that the impugned resolution did not comply with Article 9 of the Plaintiff’s Articles of Association, which required a minimum quorum of two directors. He maintained that the authority of an individual director must emanate from a resolution of a properly constituted board and that Pushpinder Singh Mann had not demonstrated such authority. 13. The 3rd Defendant further stated that a Special General Meeting convened on 18th May 2024 to appoint directors had proceeded despite orders issued in High Court Civil Case No. E256 of 2024. According to him, Pushpinder Singh Mann and the other persons who assumed office pursuant to that meeting were subsequently found guilty of contempt, with sentencing scheduled for 2 nd October 2026. He therefore maintained that their continued representation of the Plaintiff is legally questionable. 14. He referred to the court’s ruling dated 19 th September 2024, in which it observed that the proceedings could not continue until the question of directorship was finally determined. ELC NO. 358 OF 2021 He asserted that the RULING issue remained 5

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unresolved following the death of Mohan Galot, who had previously been recognized as the governing director, and that only the High Court possessed jurisdiction to determine the lawful directorship of the company. 15. He concluded that allowing the proceedings to continue under the instructions of persons whose directorship was disputed could render the trial and any resulting determination legally unsustainable. He maintained that he would suffer prejudice if subjected to proceedings prosecuted without proper corporate authority and urged the court to stay the matter pending the High Court’s determination on 2nd October 2026. 16. The 4th Defendant, Rajesh Galot, filed a response in support of the Motion on 25th July, 2026. He deponed that the issue of the 1st Plaintiff’s directorship and of who has the authority and legal cарасity to institute and prosecute this matter on its behalf has haunted this case from inception. 17. He noted that this suit was initially instituted on behalf of the Plaintiff, who was enjoined as the 1 st Plaintiff through Mr. Mohan Galot, the then director and shareholder of the Plaintiff and the latter was enjoined herein as the 2 nd Plaintiff, with Galot Limited, another shareholder, being enjoined herein as the 3rd plaintiff. 18. It was deposed that the issue of the capacity of Mohan Galot and Galot Limited to participate in these proceedings, as the director and shareholder, respectively, was raised at the very outset of the proceedings, and the ELC NO. 358 OF 2021 RULING 6

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court, in its ruling delivered on the 15 th day of August 2013, found that the 2nd and 3rd Plaintiffs, merely by virtue of being directors or shareholders of the Plaintiff company, lacked the requisite locus standi to institute the suit in their own names or on behalf of the company. Consequently, they were struck out from the proceedings, leaving the company as the sole Plaintiff. 19. He further stated that the court had, even at that early stage, acknowledged that the question of the Plaintiff’s directorship and shareholding was pending determination in HCCC No. 55 of 2012 pursuant to a consent entered into by the parties; that the court had observed that no board resolution authorizing the institution of the suit had been produced and that, given the competing claims regarding the control of the company, there was doubt as to whether the persons who commenced the proceedings possessed the necessary authority. 20. Mr. Rajesh averred that the Plaintiff thereafter took no steps to prosecute the matter for approximately five years, resulting in its dismissal for want of prosecution on 31 st October 2018 and that the Plaintiff subsequently filed an application dated 28th May 2019, seeking reinstatement of the suit. However, because its directorship and representation remained contested, the parties consented to a stay of the proceedings pending the determination of those issues in HCCC No. 55 of 2012. 21. He stated that the three-Judge Bench eventually delivered its ruling on 11th April 2024, determining that Mohan Galot ELC NO. 358 OF 2021 RULING 7

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was the Plaintiff’s Governing Director; that following that determination, the Plaintiff, through the firm of George Gilbert & Advocates, revived its application dated 28 th May 2019, for reinstatement of the suit on the ground that the question of directorship had been resolved and the matter could proceed to a full hearing. 22. According to Mr. Rajesh, the court, in its ruling delivered on 19th September 2024, reinstated the suit, having found that it could not reasonably have proceeded while the dispute over the Plaintiff’s directorship remained unresolved and that the court consequently directed that the matter proceeds through advocates appointed by Mohan Galot, who had been declared the sole director by the three-Judge Bench. 23. He further deponed that a purported general meeting was subsequently held on 18th May 2024, during which new directors were allegedly appointed and the Plaintiff’s nominal capital increased; that the High Court in HCCC No. E256 of 2024 found that the meeting had been held in contempt of the orders issued on 14th May 2024, and extended on 11th July 2024 and that the contemnors were scheduled for sentencing on 2nd October 2026. 24. Mr. Rajesh added that the 5th Defendant had instituted HCCC Petition No. E027 of 2024 seeking, among other reliefs, the nullification of the appointment of the purported new directors on the ground that it was unlawful and undertaken in breach of subsisting court orders; that the Petition is scheduled for judgment on 2 nd ELC NO. 358 OF 2021 RULING 8

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October 2026 and that on 6th December 2024, the High Court stood down Pushpinder Singh Mann, who was testifying on behalf of the Plaintiff in HCCC No. 55 of 2012, because his directorship was contested. 25. According to the deponent, on 26th June 2026, the court formally stayed the proceedings and scheduled hearings in that matter pending determination of the dispute over the Plaintiff’s directorship in HCCC Petition No. E027 of 2024. 26. Mr. Rajesh contended that Pushpinder Singh Mann was the only person who had testified on behalf of the Plaintiff in the present proceedings, yet his status as a director is the subject of the pending Petition. Consequently, the authority under which he and his advocates purport to represent the Plaintiff remain unclear. 27. He maintained that it is just and fair that the present proceedings be stayed, as had occurred in HCCC No. 55 of 2012, pending the determination of HCCC Petition No. E027 of 2024. Otherwise, the court risks proceeding on the authority of persons who might ultimately be found to be strangers to the Plaintiff and without capacity to represent it or testify on its behalf. 28. He also averred that Mohan Galot, whom the three-Judge Bench had declared the Plaintiff’s sole director, died on 18th June 2025, thereby leaving the company without a substantive director. It was deposed that upon his death, the management of the Plaintiff allegedly reverted, pursuant to clause 5(ii) of its Memorandum of Association, ELC NO. 358 OF 2021 RULING 9

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to its two management shareholders, namely the estate of Mohan Galot and the 5th Defendant. 29. Finally, Mr. Rajesh stated that the two management shareholders are embroiled in disputes before the High Court concerning the management and control of the Plaintiff, including the authority to institute or continue proceedings and to instruct advocates and that despite efforts by the court and the parties to resolve those disputes amicably, no settlement had been reached, leading to the stay of HCCC No. 55 of 2012. He therefore urged the court to allow the 5th Defendant’s application in the interests of justice. 30. In opposition to the Motion, the Plaintiff, through Pushpinder Singh Mann, filed a replying affidavit sworn on 20th July 2026. He opposed the application, contending that the suit has remained pending for over fourteen years and has been repeatedly delayed by applications seeking a stay of the proceedings. He maintained that no exceptional circumstances have been demonstrated to justify a further stay. 31. He deponed that the 5th Defendant had only recently been joined to the proceedings and that no substantive claim or relief was sought against him. Accordingly, it was deposed that he had not demonstrated any prejudice that he would suffer if the trial proceeded. He further asserted that the motion had been brought belatedly and in bad faith, after the close of the Plaintiff’s case, despite the 5 th Defendant’s ELC NO. 358 OF 2021 RULING 10

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longstanding knowledge of both the suit and Petition No. E027 of 2024. 32. The Plaintiff’s Director explained that the court had previously directed that no further interlocutory applications would be entertained and that any additional matters should be raised during the trial. He therefore contended that the application violated those directions and constituted an abuse of the court process. He further stated that the 5th Defendant had previously sought to withdraw the suit through the firm of Havi & Company Advocates on the basis of the same dispute concerning the representation and directorship of the Plaintiff. 33. The Plaintiff’s Director maintained that the issues raised in the present application were considered in the court’s ruling delivered on 2nd October 2025. According to him, the court had been informed of Petition No. E027 of 2024 and the challenge to the directorship of the Plaintiff but declined to interfere with the existing position. He therefore argued that the application was res judicata and amounted to an attempt to relitigate matters previously determined. 34. He further deponed that orders issued in High Court Civil Case No. 430 of 2012 confirmed the appointment of Avin Galot, Pushpinder Singh Mann, Rita Galot and Rajeev Modi as directors of the Plaintiff; that those orders had neither been appealed against, reviewed nor set aside and remained in force; that the applications seeking to restrain the directors from acting had not succeeded and that they ELC NO. 358 OF 2021 RULING 11

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had continued representing the company in numerous proceedings. 35. Regarding the directions issued by Mugambi J in High Court Civil Case No. 55 of 2012, he explained that they were expressly limited to that particular file and did not suspend the directors from acting on behalf of the Plaintiff in other proceedings. He contended that, had the court intended to restrain them generally, it would have issued express orders varying or setting aside the subsisting orders confirming their appointment. 36. He concluded that the present application invites the court to determine questions of company directorship and shareholding that fall within the jurisdiction of the Commercial Court, or to review orders issued by a court of concurrent jurisdiction. He maintained that the continued delay will prejudice the Plaintiff’s right to a fair and expeditious hearing and urged the court to dismiss the application and allow the trial to proceed. Submissions 37. The parties filed written submissions and also made oral arguments on the Motion. Appearing for the 5 th Defendant/Applicant, Mr. Havi (SC) submitted that the Motion seeks a stay of the present proceedings pending the determination of the dispute concerning the directorship of the Plaintiff in HCCOMM E027 of 2024, which is scheduled for Ruling on 2nd October 2026. ELC NO. 358 OF 2021 RULING 12

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38. Counsel submitted that the question of the Plaintiff’s directorship has previously occasioned the stay of related proceedings. He referred to HCCC 55 of 2012, where the court stayed the litigation pending determination of the directorship dispute. He further referred to the ruling of this court of 19th September 2024, in which this court observed that the matter could not proceed until the issue of directorship had been determined by the High Court. 39. According to counsel, the parties have therefore reverted to the position that prevailed before, where the related proceedings could not effectively progress until the dispute concerning the Plaintiff’s directorship was resolved. He pointed out that in HCC 55 of 2012, the High Court had stood down a witness on that basis. Counsel consequently urged this court, in the interests of comity and consistency between courts dealing with related proceedings, to similarly stay the present proceedings pending the determination of HCCOMM E027 of 2024. 40. Mr. Kaka, learned counsel for the 2nd Respondent, filed written submissions dated 25th July 2026 in support of the Motion. It was submitted that the dispute concerning the directorship of the Plaintiff goes to the root of the suit because a company can only instruct advocates, authorize witnesses, swear affidavits and prosecute proceedings through its lawfully authorised organs and that since the authority of the persons acting for the Plaintiff is pending determination before the Commercial Court on 2 nd October ELC NO. 358 OF 2021 RULING 13

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2026, continuing with the proceedings risks rendering the steps taken on the company’s behalf invalid. 41. Counsel challenged the board resolution dated 12 th April 2024, annexed to Pushpinder Singh Mann’s Replying Affidavit, which purportedly authorised him to represent the Plaintiff. It was submitted that the resolution was contradicted by the CR12 forms dated 19th and 27th April 2024 and the annual return dated 19th April 2024, all of which identified Mohan Galot as the company’s sole director. Counsel argued that the statutory records were presumed valid until amended or set aside and that the impugned resolution could not confer authority inconsistent with those records. 42. It was further submitted that the centrality of the directorship dispute had already been recognized by Mugambi J, who stayed the proceedings in High Court Civil Case No. 55 of 2012 and stood down Pushpinder Singh Mann as a witness pending the determination of Petition No. E027 of 2024. Counsel contended that it would be inconsistent for this court to continue receiving evidence from persons whose authority to represent the company was awaiting determination by the High Court. The 1st Plaintiff, having submitted to the Commercial Court’s jurisdiction on that question, could not properly invite this court to disregard the pending proceedings. 43. Counsel also pointed out that this court had previously stayed the suit when the directorship of the Plaintiff was in dispute. It was argued that if the proceedings continued ELC NO. 358 OF 2021 RULING 14

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and the High Court subsequently found that the persons acting as directors lacked authority, the pleadings, affidavits, witness statements, evidence and instructions issued to advocates on the company’s behalf would be open to challenge and that a temporary stay would therefore avoid inconsistent decisions, duplication of proceedings and wastage of judicial resources. 44. Relying on Sections 1A, 1B, 3A and 63(e) of the Civil Procedure Act and Order 42 Rule 6 of the Civil Procedure Rules, counsel submitted that the court had jurisdiction to stay the proceedings where the interests of justice so required. It was maintained that the temporary delay occasioned by a stay was outweighed by the risk of the proceedings being rendered a nullity. 45. Mr. Kilukumi SC for the 3rd Defendant relied on the submissions dated 25th July 2026, in support of the Motion. It was submitted that a company, being an artificial legal person, can only act through its duly authorised directors or other corporate organs. Relying on United Assurance Co. Ltd vs Attorney General, SCCA No. 1 of 1998, Fubeco China Fushun vs Naiposha Company Limited & 11 Others [2014] KEHC 8694 (KLR) and Chevron (K) Limited vs Harrison Charo Wa Shutu [2016] KECA 248 (KLR), counsel argued that while an authorised director can institute or continue proceedings without a formal board resolution, such authority cannot be presumed where the person’s directorship is disputed. ELC NO. 358 OF 2021 RULING 15

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46. It was asserted that the 5th Defendant had placed before the court evidence demonstrating that the directorship of the 1st Plaintiff remained contested and was awaiting determination by the High Court on 2nd October 2026; that following the death of Mohan Galot, the Plaintiff had no lawfully constituted board and that the persons purporting to act as its directors had been found guilty of contempt for assuming office contrary to orders of the High Court. 47. Counsel further argued that the assumption of office in defiance of a court order, together with all acts undertaken pursuant thereto, was a nullity. Reliance was placed on Omondi & Another vs Attorney General & 2 Others; Ethekon & 7 Others (Interested Parties) [2025] KEHC 9956 (KLR) for the proposition that acts done in contempt of a court order have no legal effect. 48. It was therefore submitted that allowing the proceedings to continue under the direction of persons whose authority was disputed and who had been found guilty of contempt would perpetuate disobedience of the High Court’s orders. Counsel urged the court to uphold the rule of law by staying the proceedings until the High Court determines the lawful directorship of the Plaintiff on 2nd October 2026. 49. Mr. Kenyatta for the 4th Defendant noted his support for the submissions by the other Defendants and relied on the submissions dated 25th July 2026 in support of the motion. Counsel submitted that the directorship of the 1 st Plaintiff had remained a central issue throughout the proceedings and that the suit had previously been stayed by consent ELC NO. 358 OF 2021 RULING 16

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pending the determination of that issue in High Court Civil Cases Nos. 55 and 430 of 2012 and was reinstated only after the High Court determined, on 11 th April 2024, that Mohan Galot was the sole governing director of the company. 50. Counsel argued that Mohan Galot’s death on 18 th June 2025 had revived the dispute concerning the management and directorship of the 1st Plaintiff; that that dispute was pending determination in High Court Petition No. E027 of 2024, in which a ruling was scheduled for 2 nd October 2026 and that Mugambi J had stayed the proceedings in High Court Civil Case No. 55 of 2012 and stood down Pushpinder Singh Mann as a witness pending the determination of his authority to testify on behalf of the company. 51. Counsel submitted that the authority of the persons presently acting for the Plaintiff was under challenge in High Court Civil Case No. E256 of 2024, where the meeting at which they were allegedly appointed had been found to have been held in contempt of court orders. He argued that the determination of the lawful directorship would have a bearing on the evidence already tendered and the authority to prosecute the present suit. 52. Relying on Kihingo Village (Waridi Gardens) Management One Limited vs William Edward Pike & 7 Others [2020] KEHC 10443 (KLR) and East African Safari Air Limited vs Anthony Ambaka Kegode & Another [2011] KECA 160 (KLR), counsel contended ELC NO. 358 OF 2021 RULING 17

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that where corporate authority is disputed, the appropriate course is to stay rather than terminate the proceedings, thereby allowing the company an opportunity to regularize or ratify acts undertaken on its behalf. 53. Mr. Gilbert, for the Plaintiff filed written submissions dated 22nd July 2026 in opposition to the Motion. Counsel submitted that despite the Plaintiff accommodating the 5 th Defendant’s late joinder, it filed the present Motion shortly before the resumed hearing and after the Plaintiff had tendered its evidence and closed its case. He further argued that the Motion had been filed without leave, contrary to the court’s earlier directions that no further interlocutory applications be filed without leave. 54. On the applicable principles, counsel submitted that a stay of proceedings is a grave and exceptional judicial intervention which interferes with a litigant’s right to prosecute its case. Relying on Kenya Wildlife Service v James Mutembei [2019] KEHC 10478 (KLR), counsel argued that the threshold for granting a stay is high and stringent because such an order implicates the rights of access to justice, a hearing without unreasonable delay and a fair trial. 55. Referring also to Halsbury’s Laws of England, 4th Edition, Vol. 37, counsel submitted that the power to stay proceedings ought to be exercised sparingly and only in exceptional circumstances, including proceedings are be shown to where frivolous, the vexatious, harassing or manifestly groundless. Also cited was Amario ELC NO. 358 OF 2021 RULING 18

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vs Amario & 2 Others (Civil Appeal (Application) E214 of 2025) [2026] KECA 1211 (KLR), Gichuhi Macharia & another vs Kiai Mbaki & 2 others [2016] KEHC 5149 (KLR), among others. 56. Counsel maintained that the suit concerns alleged fraud perpetrated against the Plaintiff and not the personal interests of its directors. He noted that the 5 th Defendant was not originally sued, no substantive claim or relief was sought against him, and his subsequent joinder cannot form a proper basis for halting the proceedings. According to counsel, the 5th Defendant has been aware of the suit for many years but had only intervened at critical stages of the hearing, first by seeking to withdraw the suit and subsequently by seeking joinder and, thereafter, a stay. 57. Counsel further submitted that the Court of Appeal had already considered an application for stay in related proceedings in Civil Appeal (Application) No. E825 of 2024 and, in its ruling of 3rd October 2025, declined to grant a stay. In doing so, the Court of Appeal reiterated that a stay of proceedings is a serious and grave judicial intervention which should be exercised sparingly and only in exceptional circumstances and that the Court of Appeal had found that the parties would suffer no irreparable prejudice by having their claims heard and determined on the merits, since an aggrieved party retained the right of appeal. 58. Counsel also challenged the timing and bona fides of the Motion. He submitted that Petition No. E027 of 2024, upon ELC NO. 358 OF 2021 RULING 19

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which the application is founded, has been pending for several years and there is no explanation as to why the 5 th Defendant waited until shortly before the hearing, and after the Plaintiff had closed its case, to seek a stay. In counsel’s view, the timing demonstrated an intention to disrupt the scheduled hearing and amounted to an abuse of the court process. 59. Counsel submitted that the dispute concerning the directorship and representation of the Plaintiff has already been addressed by this court in its ruling of 2 nd October 2025, where it acknowledged the pending proceedings in Petition No. E027 of 2024 and HCCOM No. E256 of 2024 and held that questions of directorship and shareholding fell within the jurisdiction of the High Court. 60. He therefore contended that the present Motion merely seeks to reopen the same issue in a different form and is barred by the doctrine of res judicata. Relying on Mwikali & another vs Mutungi & 3 Others (Civil Appeal 189 of 2019) [2026] KECA 231 (KLR), counsel maintained that litigation must come to an end and that the 5 th Defendant cannot revive an issue previously considered by this court by recasting it as an application for stay. 61. Counsel distinguished the stay granted in HCCC No. 55 of 2012, submitting that it was expressly confined to that particular file and did not extend to the other proceedings involving the Plaintiff. He further relied on the subsisting orders in HCCC No. 430 of 2012 permitting the directors ELC NO. 358 OF 2021 RULING 20

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to continue managing the company, which had neither been set aside, varied nor appealed against. 62. Finally, counsel relied on Manchester Outfitters Limited vs Pravin and Rajesh Galot, Civil Application No. 41 of 2017, where the Court of Appeal emphasized the inherent jurisdiction of courts to control their processes and prevent litigants from employing delaying tactics calculated to frustrate the just and expeditious conclusion of proceedings. 63. Counsel submitted that Articles 25(c), 48 and 50 of the Constitution, together with the overriding objective under the Civil Procedure Act, militates against any further delay of the proceedings. Counsel’s oral submissions reiterated the foregoing. 64. In response, Mr. Havi, SC, maintained that the application is specific and anchored on the proceedings in Petition E017 of 2023. He rejected the contention that this court could only stay its proceedings pursuant to an order issued in another matter, arguing that the court has the discretion to stay its own proceedings where the circumstances permit. 65. Given the unresolved questions raised in the related proceedings, counsel maintained that it would not be prudent for the court to continue receiving evidence before those issues were determined. Analysis and Determination ELC NO. 358 OF 2021 RULING 21

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66. Having considered the Motion, responses and submissions, the issues that arise for determination are: i. Whether the present Motion is competent? ii. Whether the present proceedings should be stayed 67. Vide the present Motion, the 5th Defendant, supported by the 2nd, 3rd and 4th Defendants, seeks a stay of these proceedings pending the determination of High Court Petition No. E027 of 2024. 68. At the outset, the Plaintiff challenges the competence of the Motion on two grounds. First, it contends that the application is res judicata by reason of this court's ruling delivered on 2nd October 2025. Second, it argues that the application contravenes the management directions that court's no further earlier case- interlocutory applications will be entertained and that any outstanding matters be taken up during the trial. 69. Beginning with res judicata, the law governing the same is found in Section 7 of the Civil Procedure Act, which provides that: “No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, ELC NO. 358 OF 2021 RULING 22

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and has been heard and finally decided by such court.” 70. For the bar of res judicata to arise, the matter directly and substantially in issue in the subsequent proceedings must therefore be identical to that which was directly and substantially in issue in the former proceedings; the former proceedings must have involved the same parties or their privies litigating under the same title; the issue must have been heard and finally determined; and the earlier decision must have been rendered by a court of competent jurisdiction. 71. The ruling of 2nd October 2025 arose from competing notices filed by the firms of Havi & Company Advocates and George Gilbert Advocates. The question before the court then was which firm was lawfully on record for the Plaintiff, and whether the notice of withdrawal dated 14 th July 2025 had validly terminated the suit. 72. The court found that George Gilbert Advocates had been duly instructed by the late Mohan Galot, declared the appointment of Havi & Company Advocates irregular, nullified the Notice of Change of Advocates and the Notice of Withdrawal, and directed that the suit be fixed for hearing on a priority basis. 73. In reaching that determination, the court took cognizance of the pending disputes in High Court Petition No. E027 of 2024 and HCCOM No. E256 of 2024 concerning the legal consequences of Mohan Galot's death and the subsequent management and directorship of the Plaintiff. The court ELC NO. 358 OF 2021 RULING 23

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expressly declined to determine those questions, holding that they fall within the jurisdiction of the High Court. The court nevertheless resolved the immediate question of representation on the material and orders then before it. 74. The issue raised in the present Motion is not, strictly speaking, identical to the issue finally determined in the ruling of 2nd October 2025. In the current Motion, the 5th Defendant seeks a temporary stay pending the determination of Petition No. E027 of 2024, relying also on subsequent directions made in HCCC No. 55 of 2012. The relief sought, the juridical question presented and part of the factual foundation are therefore different. The requirements of Section 7 of the Civil Procedure Act have not been established in their strict sense, and the Motion is not barred by res judicata. 75. As regards the next objection, the court's earlier direction against further interlocutory applications does not render the Motion incompetent. Case-management directions are intended to facilitate the orderly and expeditious disposal of proceedings. They do not, without more, extinguish the court's jurisdiction to consider a later application where circumstances are said to require its intervention. 76. More importantly, having heard the parties on the merits, it would serve neither fairness nor judicial economy to strike out the Motion solely by reference to the earlier direction. The preliminary objections to its competence therefore fail. ELC NO. 358 OF 2021 RULING 24

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77. The next issue for determination is whether this court should stay the present Black’s proceedings. Law Dictionary, Ninth Edition, defines a proceeding as: “(1) The regular and orderly progression of a law suit, including all acts and events between the time of commencement and the entry of judgment; (2) any procedural means of seeking redress from a tribunal or agency; (3) an act or step that is part of a larger action; (4) the business conducted by a Court or other official body, a hearing.” 78. The general principles which guide the courts whenever they are invited to exercise jurisdiction to stay proceedings are best summarized in Halsbury’s Law of England, 4th Edition, Vol 37 at pages 330 and 332 as follows: “The stay of proceedings is a serious, grave and fundamental interruption in the right that a party has to conduct his litigation towards the trial on the basis of the substantive merits of his case, and therefore the court’s general practice is that a stay of proceedings should not be imposed unless the proceedings beyond all reasonable doubt ought not to be allowed to continue.” 79. Speaking to the same, the court in Ferdinard Ndung’u Waititu vs ELC NO. 358 OF 2021 Independent Electoral RULING & Boundaries 25

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Commission (IEBC) & 8 others [2013] eKLR persuasively stated thus: “A stay of proceedings involves arresting or stopping proceedings. It is a tool used to suspend proceedings to await the action of one of the parties in regard to some step or some act (see Black’s Law Dictionary). This implies that the rationale for stay is the pendency of an act or step either required by the court or sought by a party. It may be grounded on a statutory provision or on the need of a party and based on a plea for the plenary exercise of the court’s discretion.” 80. The 5th Defendant asks the court to stay all further proceedings pending the determination of the directorship of the Plaintiff in Petition No. E027 of 2024. His case is that Pushpinder Singh Mann testified, and Avin Galot swore affidavits, as directors of the Plaintiff, yet the validity of their appointments is disputed before the High Court Commercial Court. He contends that if they are ultimately found not to be directors, the evidence received from them may be rendered legally ineffective and the judicial time expended in the trial wasted. 81. The 2nd, 3rd and 4th Defendants support that position. They rely particularly on the directions issued by Mugambi J on 26th June 2026, in HCCC No. 55 of 2012, by which the further hearing in that matter was held in abeyance ELC NO. 358 OF 2021 RULING 26

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pending the outcome of Petition No. E027 of 2024 and Pushpinder Singh Mann was stood down. They have urged this court to adopt the same position. 82. The Plaintiff opposes the plea for stay. It points out that this suit has been pending for more than fourteen years, that the dispute concerning its directorship and Petition No. E027 of 2024 were known long before the present application and that the Plaintiff has already closed its case. Further, it was urged that the 5 th Defendant, against whom no substantive relief is sought, moved the court only after being joined late in the proceedings. It further relies on the ruling of 2nd October 2025 and the subsisting orders recognizing its present representation. 83. The court accepts that the question of the Plaintiff's directorship has persistently cast a shadow over these proceedings. It arose at the interlocutory stage, informed the consent by which this suit was stayed pending the determination of HCCC No. 55 of 2012, and was one of the circumstances considered when the suit was reinstated on 19th September 2024. Following the death of Mohan Galot, further disputes arose concerning the persons entitled to direct the affairs of the company. Those disputes are now pending before the Commercial Court in, among other matters, Petition No. E027 of 2024 and HCCOM No. E256 of 2024. 84. That history, however, must be considered together with the ruling delivered by this court on 2nd October 2025. In that ruling, the court was fully apprised of Mohan Galot's ELC NO. 358 OF 2021 RULING 27

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death, the challenge to the appointment of Avin Galot, Rita Galot, Pushpinder Singh Mann and Rajeev Modi, the pending applications in Petition No. E027 of 2024, and the related proceedings in HCCOM No. E256 of 2024. 85. The court expressly acknowledged that Mohan Galot's death raised legitimate questions concerning the future directorship of the Plaintiff and that those questions would have to be resolved by the High Court. 86. The Court was equally categorical that, as an Environment and Land Court, it lacked jurisdiction to determine questions of company directorship and shareholding or to sit on appeal over the decisions of the High Court. It therefore confined itself to the issues properly falling for determination in that Motion. 87. The significance of that ruling is that, notwithstanding the court’s awareness of the pending directorship dispute and Petition No. E027 of 2024, it recognized the existing representation of the Plaintiff for purposes of these proceedings, while leaving the substantive question of its directorship to the Commercial Court. Indeed, cognizant that the directorship dispute remained pending, the court further directed that, should any determination on that issue be made during the pendency of these proceedings, the parties would be at liberty to place the same before the court by way of affidavit evidence or otherwise. 88. The 5th Defendant has not demonstrated a material change which renders that course untenable. The orders of ELC NO. 358 OF 2021 RULING 28

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Mugambi J dated 26th June 2026 do not purport to stay every suit involving the Plaintiff. To the contrary, the order expressly states that the directions apply specifically to HCCC No. 55 of 2012. Further, no order has been exhibited from Petition No. E027 of 2024 restraining the present directors from acting, suspending the authority of George Gilbert Advocates in this suit, or directing that these proceedings be stayed. 89. Although the Applicant states that a ruling is expected on 2nd October 2026, it has not been established that the anticipated ruling will finally determine the merits of the directorship dispute or result in an order governing the conduct of this case. That being so, this court cannot interrupt a fourteen-year-old trial on the basis of an anticipated outcome whose nature and effect remain uncertain. 90. As regards the contempt proceedings relied upon by the Defendants, the finding in HCCOM No. E256 of 2024 must be viewed in its proper context. The contempt related to the convening and conduct of the meeting of May 2024 in contravention of subsisting court orders. It did not, by itself, conclusively determine the lawful directorship of the Plaintiff. 91. Indeed, the continued pendency of Petition No. E027 of 2024, and the present application seeking a stay pending its determination, underscore directorship remains unresolved. that the question of The contempt finding therefore cannot, without more, be treated as a final ELC NO. 358 OF 2021 RULING 29

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determination of the directorship dispute or as a sufficient basis for staying these proceedings. 92. Timing is also material to the exercise of discretion. Petition No. E027 of 2024 and the challenge to the impugned directors was already in existence when the dispute over representation was canvassed before this court in 2025. The 5th Defendant himself relied on that Petition when asserting authority to appoint Havi & Company Advocates and to withdraw the suit. 93. He was therefore aware of the very circumstances now relied upon for a stay. Yet the present Motion was not filed until 17th July 2026, after he had been joined this suit and after the Plaintiff had presented and closed its case in June 2026. 94. The current application is therefore not founded on a newly discovered directorship dispute. That dispute has existed throughout the material stages of the litigation. What is new is the renewed attempt, at an advanced stage of the trial, to halt the proceedings on account of it. 95. More fundamentally, this court is not being called upon in the principal suit to determine who the lawful directors or shareholders of the Plaintiff are. Its mandate is to determine the pleaded dispute concerning the alleged fraudulent transfer of the suit property and the reliefs arising therefrom. In doing so, the court will consider only evidence relevant to those issues. ELC NO. 358 OF 2021 RULING 30

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96. Should the Commercial Court issue a final order with a direct legal effect on this suit before judgment, any party will be at liberty to place that specific order before the court for consideration in submissions. The mere pendency of the commercial proceedings, without an operative order affecting this suit, is insufficient to arrest the trial. In any event, the Defendants are at liberty to challenge the authority of the witness who has already testified on behalf of the Plaintiff, with or without the decision of the High Court. It is upon this court to determine if indeed such objection is merited or not in its Judgment. 97. In conclusion, the prejudice occasioned by a further stay must be weighed against the asserted risk. This suit was filed in 2012. The Plaintiff has closed its case. A further indefinite interruption would undermine the rights of the parties to have the substantive land dispute determined without further delay and would be inconsistent with the priority-hearing direction made on 2nd October 2025. 98. The court therefore finds the Notice of Motion dated 17 th July 2026 to be unmerited. The same is dismissed with costs. Dated, signed and delivered virtually in Nairobi this 24 th day of September, 2026 O. A. Angote Judge In the presence of; ELC NO. 358 OF 2021 RULING 31

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Ms Awiti holding brief for George Gilbert for Plaintiff Mr. Ashioya holding brief for Havi (SC) for 5 th Defendant/Applicant Mr. Ashioya for Kaka for 2nd and 3rd Defendants Mr. Kenyatta for 4th Defendant Court Assistant: Tracy ELC NO. 358 OF 2021 RULING 32

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