Muthumbi v Newgen Software Technologies Ltd

subscription, maintenance or support fees, commissions and other entitlements due and owing to the Respondent from various entities including KCB Bank Kenya Limited, Equity Bank (Kenya) Limited, Co-operative Bank Kenya Limited, NCBA Bank Kenya PLC, I & M Bank Limited, Prime Bank Limited, National Social Security Fund, Shelter Afrique Development Bank, Faulu Micronance Bank Limited or any other bank, nancial institution, agency, client or counter-part within Kenya up to the aggregate of USD 143,293 pending the hearing and determination of the application interpartes. The court also issued an order of interim injunction to restrain the Respondent from, inter alia, calling for, demanding, receiving, collecting, remitting, repatriating, transferring, withdrawing, assigning, charging, setting o, encumbering or in any other way dealing with the aforesaid properties pending the disposal of the application inter-partes. 4. 5. The Respondent is aggrieved by the said orders. As such, it has led the application dated 11th September 2026 seeking the following orders:a. That the application be certied as urgent and service thereof be dispensed with in the rst instance. b. That the court be pleased to discharge, lift and or set aside the orders issued by Hon. Justice J.N Abuodha on 24th August 2026 forthwith. c. That the court be pleased to stay the entire proceedings in the suit and to refer the dispute herein for hearing and determination by way of arbitration in accordance with clause 7 of the Independent Consultancy Agreement dated 25th February 2022 (and revised on 21st March 2024 and 20th September 2024) between the parties. d. That the court be pleased to grant any other orders it may deem t and just. e. That the costs of the application be provided for. The application is anchored on the grounds appearing on the face thereof and the adavit and supplementary adavit sworn by Aman Mourya and Sourav Singh respectively. The Respondent contends as follows:a. That there is no employment relationship between the parties as it (the Respondent) engaged the Claimant as an Independent Consultant. b. That the Claimant failed to disclose the aforesaid fact to the court as she sought the impugned ex-parte orders. c. That the impugned orders have frozen all receivables and subscription fees due to it (the Respondent) from a majority of its (the Respondent’s) clients thus disrupting its (the Respondent’s) commercial transactions with third parties. d. That the orders have the eect of damaging its (the Respondent’s) commercial goodwill and will occasion it (the Respondent) severe and irreparable business injury. e. That clause 7 of the consultancy agreement between the parties requires them to refer unresolved disputes between them to arbitration and not the court. f. That the contract between the parties is governed by the laws of India and any unresolved dispute between them arising from the said contract is to be arbitrated upon at New Delhi, India. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2538/eng@2026-09-25 2

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g. That as such, the court is bereft of jurisdiction to entertain the claim. h. That the parties are bound by the arbitration clause in the agreement between them and the court is not entitled to re-write the contract. i. That contrary to the image painted by the Claimant, it (the Respondent) is not a transient or fugitive entity but a well-established organization operating in and providing solutions to nancial institutions and other customers in Kenya, East Africa and the broader African continent. j. That it (the Respondent) has various institutional customers in Kenya from which it has receivables amounting to USD 1,519,821.51. k. That as a result of the impugned ex-parte orders, most of its (the Respondent’s) customers have withheld payments from it out of abundance of caution thus jeopardizing its operations. l. That the Claimant’s claim for USD 143,293 is subject to strong jurisdictional and legal challenges. m. That freezing its (the Respondent’s) receivables across all major nancial institutions simultaneously is grossly disproportionate, oppressive and has handicapped it (the Respondent). 6. The Claimant has opposed the application through her adavit and supplementary adavit both dated 22nd September 2026. She contends that her claim against the Respondent is for the sum of USD 143,293 together with interest and costs. She further avers that the Respondent has deprived her of her entitlements since 22nd September 2025 thus subjecting her and her immediate family to immense suering. 7. The Claimant contends that prior to ling suit, her advocates tried to engage the Respondent with a view to resolving the dispute between them amicably but to no avail. It is her case that the Respondent only began engaging her on the matter after she obtained the freezing orders. 8. The Claimant denies that the impugned orders are blanket in nature. She contends that the orders only seek to secure the sum of USD 143,293 which she has claimed in the suit. 9. The Claimant contends that some of the Respondent’s clients hold amounts which are more than what she is claiming. As such, she disputes the contention that the entire of its (the Respondent’s) assets have been frozen. 10. The Claimant avers that the Respondent is registered in India and has no registered oce or branch in Kenya. She further avers that the Respondent does not own any immovable or other attachable assets in Kenya. 11. The Claimant avers that the only property which connects the Respondent to Kenya is the stream of payments it receives from its Kenyan clients and which it repatriates to India. To back her claim, she contends that the Respondent has not identied any assets it owns in Kenya in the adavits it has led to support the application under consideration. 12. The Claimant avers that if the impugned orders are lifted, she will be forced to enforce any resultant judgment against the Respondent in India. Yet, she alleges that there is no reciprocal arrangement between Kenya and India for enforcement of foreign judgments. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2538/eng@2026-09-25 3

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13. The Claimant avers that if the Respondent contends that the receivables due to it from its clients are more than what she is claiming, then the right thing to do is for it to provide security for the performance of the anticipated decree. However, she avers that it (the Respondent) has avoided to do so. 14. The Claimant contests the proposal to conne the preservation orders to two of the Respondent’s clients. She, inter alia, avers that no evidence has been provided to demonstrate that the two nominated clients are holding amounts which are sucient to satisfy the anticipated decree. 15. The Claimant contends that should the court be minded to vary the preservation orders, it should only do so on, inter alia, the following conditions:- 16. a. That the Respondent provides a bank guarantee for USD 200,000. b. That the guarantee should be issued by a local commercial bank licensed by the Central Bank of Kenya. c. That the guarantee should be payable on rst demand and should remain valid until at least 90 days after nalization of the suit. The Claimant avers that in the alternate, the Respondent should be ordered to deposit the aforesaid amount in USD denomination in a joint interest earning account in the names of the advocates for the parties or in court. Further, she avers that the preservation orders should remain in force until the guarantee or deposit is lodged and approved. Analysis 17. In the court’s ruling dated 16th July 2026 which allowed the Claimant to serve Summons to Enter Appearance on the Respondent out of jurisdiction, it (the court) observed and directed as follows:…the court notes that the contract between the parties makes reference to the law that is to be applied to it (the contract) and the court which ought to handle disputes arising from the contract. As such and notwithstanding the Claimant’s preliminary view that this court has jurisdiction, the court directs that the rst business for resolution shall be to determine whether it (the court) indeed is seized of jurisdiction over the dispute. Consequently, once pleadings close, the parties will be required to submit on this issue in order for the court to determine it at the earliest.’’ 18. From the foregoing, it is apparent that the court agged the question of jurisdiction to entertain the claim from inception of the suit. As such, it (the court) is obliged to resolve the issue before it can undertake any other substantive proceedings in the cause. 19. That the foregoing is the position in law has been armed through case law. For instance, in Waimiri v Muhoro & 2 others [2025] KEHC 280 (KLR) the learned Judge observed that a court of law must ascertain that it has jurisdiction over a matter before it acts on it. The court expressed itself on the subject as follows:Jurisdiction in all its facets must be present before the court handles a matter.’’ https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2538/eng@2026-09-25 4

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20. InOwners of the Motor Vessel “Lillian S" v Caltex Oil (Kenya) Ltd [1989] KECA 48 (KLR), the court expressed itself on the matter as follows:I think that it is reasonably plain that a question of jurisdiction ought to be raised at the earliest opportunity and the court seized of the matter is then obliged to decide the issue right away on the material before it. Jurisdiction is everything. Without it, a court has no power to make one more step. Where a court has no jurisdiction, there would be no basis for a continuation of proceedings pending other evidence. A court of law downs tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.’’ 21. Taking into account the foregoing, it is plain to me that I am duty-bound to address the question of jurisdiction before I can venture to determine any other substantive issues in the cause including those raised in the various applications that are now pending. It is in this context that I approach the instant application. As such, pending determination of the issue of jurisdiction, I will refrain from addressing any other matter in the application under consideration save for the question relating to whether the interim exparte orders should be vacated. 22. Indeed, I note that the Respondent has led a Notice of Preliminary objection through which it contests the court’s jurisdiction on various fronts including: the choice of law; venue for dispute resolution; and arbitration. The objection is founded on clauses 7 and 8 of the contract between the parties. Accordingly, all other issues raised in the application, including whether the suit should be referred to arbitration shall be addressed as part of the jurisdictional question which the parties were directed in the court’s ruling of 16th July 2026 to submit on as the rst business in the cause. 23. The Respondent has not disputed the Claimant’s contention that it is a foreign company with no assets in Kenya other than those which have been identied by the Claimant in her adavits and which comprise of receivables from the Respondent’s clients. The Respondent has also not disputed the Claimant’s assertion that most of the receivables are repatriated out of Kenya once they are received. 24. The foregoing raises legitimate concerns regarding enforceability of any anticipated decree in the suit. Whilst this may not be evidence of the Respondent removing its assets from Kenya with the intention of defeating any anticipated decree in the suit, it speak to the reality that should the Claimant’s suit be successful, she may have nothing to attach since the Respondent has no known assets in Kenya except for the receivables which are said to be in transit to other jurisdictions. 25. Having regard to the foregoing, the court considers that it is just and fair that the Respondent provides some form of security for the performance of the anticipated decree pending determination of the issues raised in the suit including the preliminary question regarding whether the court has jurisdiction over the matter. Nevertheless, the court also takes cognizance of the Respondent’s contention that the interim preservation orders which the court issued on 24th August 2026 have disabled its activities since they froze most of its receivables. Determination 26. Taking into account the foregoing and in order to balance the interests of justice the court is minded to and hereby issues the following orders in terms of prayer four (4) in the Respondent’s application dated 11th September 2026 and paragraph 32 of the Claimant’s Replying Adavit dated 22nd September 2026:a. The court grants the Respondent’s request to lift the impugned preservation orders conditional upon either:- https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2538/eng@2026-09-25 5

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i. The Respondent providing the Claimant with an irrevocable bank guarantee issued by a reputable local bank in Kenya to secure the sum of USD 143,293 which is the subject of the preservation order within 21 days of this order; or ii. KCB Bank Limited and NCBA Bank Kenya PLC issuing, at the instance of the Respondent, two separate irrevocable undertakings in favour of the Claimant to deposit the receivables due from the two nancial institutions to the Respondent totaling USD 160,000 as evinced in paragraph 23 of the Respondent’s submissions dated 23rd September 2026 into a joint escrow account operated by the Claimant’s and the Respondent’s Counsel within 21 days of this ruling. iii. The bank guarantee or irrevocable undertakings alluded to above shall be approved by the court’s Deputy Registrar. b. For the avoidance of doubt, the impugned preservation orders remain in force until there is compliance with order 26(a) above. c. Costs of the application to be in the cause. DATED, SIGNED AND DELIVERED ON THE 25TH DAY OF SEPTEMBER, 2026 B. O. M. MANANI JUDGE In the presence of: …………….for the Claimant …………….for the Respondent Order In light of the directions issued on 12thJuly 2022 by her Ladyship, the Chief Justice with respect to online court proceedings, this decision has been delivered to the parties online with their consent, the parties having waived compliance with Rule 28 (3) of the ELRC Procedure Rules which requires that all judgments and rulings shall be dated, signed and delivered in the open court. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2538/eng@2026-09-25 6

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