Benard Ogeisia Marwanga & 4 others v Nelson Onduko Onyancha & 7 others

b. Costs of the Petition. c. Any other relied the Honourable Court may deem fit to grant. 2. The Respondents opposed the Petition through the Replying Affidavit dated 27th June 2025 wherein they seek the dismissal of the Petition on the basis that it does not disclose a violation of any of the Petitioners’ rights or that the Petitioners have engaged in an illegality that meets the threshold set out under Section 277 of the Companies Act. 3. Concurrently with their response, the Respondent also filed a Notice of Preliminary Objection wherein they seek the striking out of the Petition on the following grounds: 1. That the suit is fatally defective, incompetent and bad in law as it has been brought against the directors of a company in their personal capacities, contrary to the established principle of corporate legal personality. 2. That the cause of action if any, lies against the company as a distinct legal person and not its directors and as such, the Defendants herein are wrongly enjoined in these proceedings. 3. That upon incorporation, a company becomes a body corporate capable of suing and being sued in its own name as provided under the Companies Act 2015 and thus, the proper party to sue is the company itself and not its agents or directors in their individual capacity. 4. That the suit offends the doctrine laid down in Salomon vs. Salomon & Company Limited (1897) AC 22, which affirms that a company is a separate legal entity distinct from its shareholders and directors. 5. That the suit discloses no reasonable cause of action against the named defendants and it is an abuse of the court process. 4. The Preliminary Objection was canvassed by way of written submissions which I have considered. 5. Having considered the pleadings, affidavits and submissions of both parties, the Court identifies the following issues for determination: a. Whether the Preliminary Objection is properly raised and meets the threshold in Mukisa Biscuit Manufacturing Co. Ltd vs. West End Distributors Ltd (1969) EA 696. b. Whether the Petition, as framed, is fatally defective for having been instituted against the directors in their individual capacities. c. Whether the Petition discloses a reasonable cause of action or violation of constitutional rights to warrant the Court’s intervention. d. Who should bear the costs of the Preliminary Objection and the Petition. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19371/eng@2025-10-16 2

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Analysis And Determination Whether the Preliminary Objection is properly raised 6. A Preliminary Objection must be based purely on points of law capable of disposing of the entire suit without requiring ascertainment of facts. The Court of Appeal in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696 at 700 per Law JA held: “ A preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which, if argued as a preliminary point, may dispose of the suit.” 7. The objection before this Court is premised on the principle of corporate legal personality, which is a point of law. The Court therefore finds that the objection meets the Mukisa Biscuit threshold. Whether the Petition is defective for suing directors personally 8. The Respondents contend that Kebirigo Tea Factory Company Limited is a separate legal person capable of suing and being sued in its own name under Section 19(1) of the Companies Act. The Petition has however been brought against individual directors without enjoining the company itself. 9. The principle of separate corporate personality was firmly established in Salomon vs. Salomon & Co. Ltd (1897) AC 22, where Lord MacNaghten stated: “ The company is at law a different person altogether from the subscribers… and though it may be that after incorporation the business is precisely the same as before, the company is not in law the agent of the subscribers or trustee for them.” 10. Similarly, in Victor Mabachi & Another vs. Nurtun Bates Ltd [2013] eKLR, the Court of Appeal affirmed: “ It is a basic principle of company law that once a company is incorporated, it becomes a legal person distinct from its members and directors, and it is the company itself which should sue or be sued.” 11. In the instant case, I note that the Petitioners have not pleaded any exceptional circumstances warranting the lifting of the corporate veil, such as fraud, agency, or abuse of the corporate form. The company is therefore the proper respondent in law. Accordingly, I find that the Petition is misconceived having been instituted against the directors personally rather than against Kebirigo Tea Factory Company Limited. Whether the Petition discloses a reasonable cause of action or violation of rights 12. The Petitioners invoked Articles 22 and 23 of the Constitution seeking to enforce alleged violations of their constitutional rights arising from failure to convene an Annual Special General Meeting. I however note that the Petitioners’ grievance relates to the internal governance of a private company regulated under the Companies Act and the company’s Articles of Association. In the case of Trusted Society of Human Rights Alliance vs. AG & 2 Others [2012] eKLR it was held that: “ Not every ill in society should attract a constitutional petition. Where there exists an alternative statutory remedy, that procedure should be pursued first.” https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19371/eng@2025-10-16 3

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13. The Petitioners had remedies under Sections 275 and 277 of the Companies Act, including applying to the Registrar or Court for orders compelling the company to hold an AGM. I find that resort to a constitutional petition without exhausting the statutory route renders the Petition premature and an abuse of the Court process. 14. From the foregoing analysis, the Court finds that: - 15. 16. a. The Preliminary Objection is merited. b. The Petition is fatally defective, having been filed against directors in their personal capacities instead of against Kebirigo Tea Factory Company Limited. c. The Petition discloses no reasonable cause of action nor violation of constitutional rights. Consequently, I make the following final orders: i. The Preliminary Objection dated 27th June 2025 is hereby upheld. ii. The Petition dated 20th February 2025 is struck out for being incompetent and an abuse of the court process. iii. The costs of the Petition and the Preliminary Objection shall be borne by the Petitioners. Orders accordingly. RULING DATED, SIGNED AND DELIVERED AT NYAMIRA VIRTUALLY VIA MICROSOFT TEAMS THIS 16TH DAY OF OCTOBER 2025. W. A. OKWANY JUDGE https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19371/eng@2025-10-16 4

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