Kelpar Investments Limited v Occidental Insurance Company Limited

RULING 1. The Court is called upon to determine the Defendant’s Notice of Motion dated 29th July 2025, brought under the Civil Procedure Act and Rules, seeking to set aside the orders issued on 18th June 2025, which directed the Defendant to deposit the sum of KES. 7,000,000 pending hearing of the Plaintiff’s application dated 25th April 2025. 2. The application is supported by the Supporting Affidavit of Sophie Nassanga, sworn on 29th July 2025, who deposes that service of the Plaintiff’s earlier application did not reach the Defendant’s legal department due to internal misdirection to the underwriting department. The deponent states that the Defendant only became aware of the proceedings in July, by which time the impugned order had already been made, and that the Defendant was therefore denied a meaningful opportunity to be heard. 3. Opposition is mounted through the Replying Affidavit of Mary Kerubo Nyamongo, sworn on 30th September 2025, on behalf of the 3rd, 4th, 5th, 7th to 13th Interested Parties. 4. The deponent maintains that the Defendant was duly served and points to the affidavits of service on record in support of that position. She further contends that the Defendant’s explanation for failing to respond is unsupported by evidence and asserts that the present application has only been prompted by the Plaintiff’s indication that contempt proceedings would be commenced. 5. The Interested Parties also filed written submissions dated 25th September 2025. 6. The key question is whether, in the circumstances of this case, the Defendant was accorded a real and meaningful opportunity to be heard before the issuance of the order requiring deposit of KES. 7,000,000, and whether the Court should exercise its discretion to set aside the ex parte order. 7. It is common ground that the Plaintiff’s application dated 25th April 2025 was served by email on 05th June 2025. The Defendant does not deny that the email was received somewhere within its organisation. The issue is whether such service, which the Defendant avers was misdirected internally, afforded the Defendant a fair chance to respond. 8. The governing legal standard is well settled. A court has wide discretion to set aside ex parte orders where justice so requires. The primary consideration is whether the party seeking relief was denied the right to be heard. 9. The right to a fair hearing, rooted in the principle of audi alteram partem and codified in Article 50 of the Constitution, is paramount and informs the exercise of judicial discretion. 10. The Court of Appeal in Pithon Waweru Maina v Thuku Mugiria [1983] eKLR affirmed that ex parte orders may be set aside where failure to attend or respond was due to accident, inadvertence or excusable mistake, and that justice is best served when cases are determined on their merits rather than technical lapses. 11. In Patel v EA Cargo Handling Services Ltd [1974] EA 75, the East African Court of Appeal emphasised that discretion should be exercised to avoid injustice and hardship. 12. In Shah v Mbogo & Another [1967] EA 116, the same Court explained that the purpose of the discretion is to prevent injustice, not to assist a party who deliberately seeks to obstruct justice. 13. The Interested Parties rely on the Court of Appeal’s decision in Habo Agencies Limited v Wilfred Odhiambo Musingo [2015] eKLR, which stresses the duty of litigants to follow up their cases. That https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18387/eng@2025-11-27 2

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principle is correct and remains binding. However, it does not negate the Court’s duty to consider whether, on the facts, a party’s lapse was deliberate. 14. The Defendant in this case has given a plausible explanation that internal misdirection caused the application not to reach the legal department, and there is nothing to suggest an intention to obstruct or ignore the Court process. That the Defendant promptly instructed counsel upon becoming aware of the proceedings lends weight to its explanation. 15. The order requiring the deposit of KES. 7,000,000 is substantial and carries significant financial implications. Such an order should ordinarily be made after inter partes hearing unless urgency or risk is demonstrated. 16. The Defendant did not have a meaningful opportunity to present its response before the order was made. Given the centrality of the right to be heard and the constitutional imperative that justice shall not be sacrificed to procedural technicalities, this Court is persuaded that the ex parte orders ought to be revisited. 17. There is no evidence that Plaintiff and the Interested Parties will suffer prejudice that cannot be addressed through an expedited inter partes hearing of the Plaintiff’s application. On the other hand, sustaining the ex parte order without granting the Defendant a hearing would offend the dictates of fairness and constitutional justice. 18. Accordingly, the Court finds merit in the Defendant’s Motion and it is hereby ordered: 1. The Notice of Motion dated 29th July 2025 is hereby allowed. 2. The order made on 18th June 2025, directing the Defendant to deposit KES. 7,000,000 is set aside. 3. The Plaintiff’s Notice of Motion dated 25th April 2025 shall be heard inter partes on a priority basis. 4. The Defendant shall file and serve its response to the said application within five (5) days from the date of this ruling. Any further affidavits arising therefrom shall be filed and served within three (3) days of service of the Defendant’s response. 5. Upon close of the affidavit evidence, the parties shall proceed by way of written submissions. The Applicant shall file and serve its written submissions within seven (5) days of the close of affidavits. 6. The Respondent and Interested Parties shall thereafter file and serve their submissions within five (5) days of service of the Applicant’s submissions. 7. In view of the nature of the dispute and the involvement of multiple parties, each party shall bear its own costs of the present application. 8. Mention on 17th December 2025 to confirm compliance and to fix a date for ruling DELIVERED AT NYAMIRA THIS 27TH DAY OF NOVEMBER 2025 WAMAE.T. W. CHERERE JUDGE Appearances Court Assistant - Hilda https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18387/eng@2025-11-27 3

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For Plaintiff - Mr. Bosire for Obulina Menya & Co. Advocates For Defendant - Mr. Masinde for Boniface Masinde & Co. Advocates For 1st Interested Party - N/A For 2nd Interested Party - N/A for Masire & Mogusu Advocates For 3rd, 4th, 5th, 7th to 13th Interested Parties – Mr. Omari for Ben K. Gichana & Co. Advocates For 6th Interested Party - N/A for Oremo Jared & Co. Advocates https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/18387/eng@2025-11-27 4

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