Mahadi Energy Limited & 1 other v Premier Bank Limited (previously Trading As First Community Bank Limited) & 3 others

c. Spent; d. That this honourable court be pleased to grant leave to the petitioners/applicants to institute contempt proceedings against Premier Bank Kenya Limited and its officers named hereinafter; Jibril Hassan Mohamed, Osman Duale Ahmed, Ahmed Nassir Maalim and Claris Ajwang Ogombo, respectively, the chairman of the board, the chief executive officer, the controlling director/shareholder, and the legal manager of Premier Bank Kenya Limited; e. That this honourable court be pleased to find Premier Bank Kenya Limited and its named officers, Jibril Hassan Mohamed, Osman Duale Ahmed, Ahmed Nassir Maalim, and Claris Ojwang in contempt of the court for wilfully disobeying the conservatory orders issued on 25th October 2024; f. That this honourable court be pleased to purge the contempt of the conservatory orders made on 25th October 2024 by cancelling /revoking the transfers of LR NO. MN/V1/2428, LR NO. MN/V1/4689, LR NO. MN /V1/4689, LR MN/V1/998, LR 209/5061, Title No. Nairobi/ block 103/434, Cr No 46162, Lr No. 209/2389/95 Juja Road Nairobi, Lr NO.209/5082 Nairobi South C and LR NO.25764 Juja Road Nairobi made by the 1st respondent on 31st October 2024; g. That this honourable court be pleased to grant leave for the committal to civil jail of Jibril Hassan Mohamed, Osman Duale Ahmed, Ahmed Nassir Maalim, and Claris Ajwang Ogombo; h. That this honourable court be pleased to commit Jibril Hassan Mohamed, Osman Duale Ahmed, Ahmed Nassir Maalim, and Claris Ajwang Ogombo to civil jail for a period of six (6) months; and i. That the costs of the application be borne by the 1st respondent. 2. The application is premised on the grounds stated therein and also on the supporting affidavit sworn by Mr Ibrahim Hussein Mahadi, sworn on 7th November 2024. Vide the said affidavit, the deponent thereto stated that the honourable court issued conservatory orders on 25th October 2024, restraining the respondents from undertaking any dealings, transfers, and in any manner whatsoever interfering with LR No. MN/V1/2428, LR No. MN/V1/4689, LR MN/V1/998, LR 209/5061, Title No. Nairobi/Block 103/434, CR 46162, LR No. 209 /2398/95 Juja Road, Nairobi, LR No. 209/5082 Nairobi South C, and LR No. 25764 Juja Road, Nairobi, pending hearing and determination of the application dated 18th October 2024. 3. Further, the order, the petition, and the application were served upon the 1st respondent on 30th October 2024. After the service was effected, the 1st respondent proceeded to transfer the suit properties to Shabeel Project Service Limited on 31st October 2024. The respondent moved with haste to make payments for the stamp duty on 30th October 2024 before finalizing the transfer on 31st October 2024.The transfers of the said suit properties constitute wilful disobedience of the court’s orders with the intention of defeating justice. 4. Mr Mahadi deposed that court orders are not issued in vain, and those to whom compliance is mandated are not to choose whether to obey or not. The orders for the cancellation of the transfers made on 31st October 2024 and the committal to civil jail of the contemptuous directors and legal manager of the 1st respondent is the most efficacious mode of compelling them to obey the court's orders and to purge the contempt. He averred that punishment is necessary to safeguard the dignity of this honourable court, the rule of law, and the administration of justice. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19582/eng@2025-09-29 2

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5. He further averred that if the orders sought are not granted, the 1st petitioner will suffer irreparable loss. He therefore urged the court to allow the application as prayed. 6. In response, the 1st respondent filed a replying affidavit sworn by its Head of Legal Services, Ms Meimuna Abdullahi Mohamed, sworn on 27th May 2025. She stated that on the evening of 30th October, 2024, the 1st respondent was served with a court order restraining it from undertaking any dealings, transfers, and/or in any manner whatsoever interfering with the properties known as LR No. MN/V1/2428 and LR. No. MN/V1/4689. After service of the court order, the 1st respondent undertook no dealings whatsoever with the subject properties. The subject properties were sold to the 2nd interested party via public auction that took place on 4th September 2024. 7. She stated that the petitioners lack locus to seek or obtain any orders as regards the subject matter or to allege violation of court orders as Section 98(8) as read with Section 104(4) of the Land Act, extinguish the petitioners’ equity of redemption over the subject properties upon the fall of the hammer in an auction. 8. She averred that on 17th October 2024, the 1st respondent, through its advocates, duly forwarded all completion documents for the transfer of the subject properties to the 2nd interested party’s advocates, Messrs. Omusolo, Mungai & Co. Advocates. Since then, the 1st respondent has not undertaken any dealings with the subject properties, as it was the responsibility of the purchasers to effect the transfers. She urged the court to dismiss the application with costs. 9. The 2nd interested party filed a replying affidavit sworn on 22nd November 2024 by its director, Suleiman Abdullahi Omar. He stated that the 2nd interested party is the bona fide legal owner of the subject properties, having purchased the same at auctions conducted on behalf of the 1st respondent on 14th August 2024 and 4th September 2024. He averred that it is a trite law that, at the fall of the hammer, the sale of the subject properties to the 2nd interested party stood concluded, at which point the petitioner’s equity of redemption was extinguished. Therefore, any subsequent challenge to the exercise of the power of sale by the petitioners would only lie through an action for damages against the 1st respondent, by operation of Section 99(4) of the Land Act. 10. He stated that in respect of the orders issued on 25th October 2024, the 2nd interested party was not a participant in these proceedings, nor was it served with the exparte orders nor any accompanying penal notice. That the 2nd interested party was only joined to these proceedings on 8th November 2024, long after the sale of the subject properties was concluded. 11. He stated that the properties LR No.MN/V1/2428 (CR No.144493), Port Reitz Mombasa, and LR No. MN/V1/4689 (CR No. 46162), Port Reitz were transferred and registered on 31st October 2024, in the name of the 2nd interested party. That having failed to serve the conservatory orders and join the 2nd interested party in these proceedings, the said orders automatically lapsed. 12. He further stated that the inhibition orders issued on 8th November 2024, are fetter to the 2nd interested party as an innocent purchaser for value as provided for under Section 99 of the Land Act 2012, and the court should not bar it from enjoying the fruits of its investment. He urged the court to dismiss the application with costs. 13. When the matter came up for hearing on the 28th of May 2025, the 1st respondent and the 2nd interested party called one witness each for cross-examination. 14. RW1 Meimuna Abdullahi Mohamed told the court that she was not working at the bank when the transaction of the two properties took place, as she joined the bank in February 2025. The bank was represented by the firm of Igeria & Ngugi Advocates, while the firm of Omuse Advocates represented https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19582/eng@2025-09-29 3

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the purchaser. The sale took place on 4th September 2024, via public auction. The bank delivered the completion documents to its advocates, who in turn delivered them to the purchaser’s advocates, who acknowledged receipt on 17th October 2024. 15. It was her evidence that the bank was served with the order at 4 pm on 30th October 2024. 16. In re-examination, she reiterated that they were served with the court order at 4 PM on 30th October 2024, and that they did not undertake any further action in regard to this matter as the bank’s involvement ended upon the forwarding of completion documents to the advocates. She contended that the bank did not register any transfers. 17. RW2 Suleiman Abdullahi Omar told the court that he purchased two properties in Nairobi and Mombasa through auction, which took place in Kileleshwa, Nairobi, and Nyali, Mombasa, and paid for the properties. He testified that the 2nd interested party was not served prior to the transfer and that it has not been cited for contempt. 18. The honourable court then directed parties to file written submissions. Subsequently, the petitioners, through their advocates, Messrs Gachiri Kariuki & Company Advocates, filed written submissions dated 4th July 2025. Counsel submitted on two issues: whether the 1st respondent is in contempt, and what orders should issue. 19. Counsel submitted that the actions by the 1st respondent and the 2nd interested party were meant to circumvent the orders of the court. Counsel urged the court to revoke the transfers of the suit properties and to punish the 1st respondent by committing the directors named in the application to civil jail. 20. The 1st respondent, on the other hand, through its advocates, Messrs Igeria & Ngugi Advocates, filed its submissions dated 2nd July 2025. Counsel submitted on one issue, namely, whether the 1st respondent is in contempt of court. 21. Counsel reiterated the 1st respondent’s witness position and submitted that it was the 2nd interested party who transferred the suit properties and that, from the evidence, the 2nd interested party started the transfer process long before the service of the conservatory orders upon the 1st respondent. The 2nd interested party was never served with the conservatory order by the petitioner, as it was not a party to the proceedings at the time of the issuance of the said order. 22. Counsel further submitted that the process of transferring the properties to the 2nd interested party took place over a protracted period of time and only culminated on 31st October 2024. The petitioners caused their own failure by not serving the Land Registrar with the order and/or registering it at the Lands Registry on time; instead, they waited until 4th November 2024. The decision to sit on the court order and not serve the requisite parties resulted in the transfer of the subject properties. 23. Counsel submitted that the petitioners cannot choose which officers of the 1st respondent to cite for contempt and that there is no evidence that the said officers were served with the application herein or the subsequent court process. The 1st respondent is a separate entity from the officers named by the petitioners, who were not granted an order to lift the corporate veil. 24. In conclusion, counsel submitted that the petitioners have failed to prove that the 1st respondent is in contempt of the court’s order and urged the court to dismiss the application with costs. 25. Since the Petitioners/Applicants seek to cite the 1st respondent and its directors for an alleged contempt of Court, I must first set out what ingredients must be shown to exist. It is a trite law that for there to be contempt of Court, there must be a valid court order that is clear and unequivocal. The party https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19582/eng@2025-09-29 4

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sought to be cited for contempt of court must have knowledge of the court order. There must also be a breach of the said order, and the party in breach must have acted deliberately and wilfully; its conduct must have been intentional and not accidental. 26. In the case of Mutitika v Baharini Farm Limited [1985] KLR 227, the Court stated as follows:“ A contempt of court is an offence of a criminal character. A man may be sent to prison. It must be proved satisfactorily… it must be higher than proof on a balance of probabilities, almost but not exactly, beyond reasonable doubt. The standard of proof beyond reasonable doubt ought to be left where it belongs, to wit criminal cases. It is not safe to extend it to offences which can be said to be quasi-criminal in nature. However, the guilt has to be proved with such strictness of proof as is consistent with the gravity of the charge… Recourse ought not to be heard to process contempt of court in aid of a civil remedy where there is any other method of doing justice. The jurisdiction of committing for contempt being practically arbitrary and unlimited, should be most jealously and carefully watched and exercised with the greatest reluctance and the greatest anxiety on the part of the judge to see whether there is no other mode which is not open to the objection of arbitrariness and which can be brought to bear upon the subject…” 27. Similarly, the court, in the case of Sheila Cassatt Issenberg & Watoto World Centre v Antony Machatha Kinyanjui [2021] KEHC 5692 (KLR) stated that: “ The reason why courts punish for contempt is to uphold the dignity and authority of the court, ensure compliance with directions of the court, observance and respect of due process of law, preserve an effective and impartial system of justice, and maintain public confidence in the administration of justice by courts. Without sanctions for contempt, there would be a serious threat to the rule of law and administration of justice. For a party to be cited for contempt, he must have violated and or disobeyed an order that was directed at him… Due to the gravity of consequences that ordinarily flow from contempt proceedings, it is proper that the order be served and the person cited for contempt should have had personal knowledge of that order… The emphasis, as shown in the above cases, is that there must be “wilful and deliberate disobedience of court orders.” There cannot be deliberate and wilful disobedience unless the contemnor had knowledge of the existence of that order. And because contempt is of a criminal nature, it is always important that breach of the order be proved to the required standard; first, that the contemnor was aware of the order having been served or having personal knowledge of it, and second, that he deliberately and wilfully disobeyed it… But even as courts punish for contempt to safeguard the peaceful development of society and the rule of law, it must be borne in mind that the power to punish for contempt is a discretionary one and should be used sparingly.” 28. Further, in the case of Samuel M. N. Mweru & Others v National Land Commission, Nairobi City Water and Sewerage Company Limited & Nairobi City Water County [2020] KEHC 9233 (KLR), the Court expressed itself as follows: “ It is an established principle of law that in order to succeed in civil contempt proceedings, the applicant has to prove (i) the terms of the order, (ii) Knowledge of these terms by the Respondent, (iii). Failure by the Respondent to comply with the terms of the order. Upon proof of these requirements, the presence of wilfulness and bad faith on the part of the Respondent would normally be inferred, but the Respondent could rebut this inference by contrary proof on a balance of probabilities. Perhaps the most comprehensive of the https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19582/eng@2025-09-29 5

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elements of civil contempt was stated by the learned authors of the book Contempt in Modern New Zealand, who succinctly stated that:"There are essentially four elements that must be proved to make the case for civil contempt. The applicant must prove to the required standard (in civil contempt cases which is higher than civil cases) that:a. the terms of the order (or injunction or undertaking) were clear and unambiguous and were binding on the defendant; b. the defendant had knowledge of or proper notice of the terms of the order; c. the defendant has acted in breach of the terms of the order; and d. the defendant's conduct was deliberate. … Two principals emerge. The first is liberty: - it is basic to our Constitution that a person should not be deprived of liberty, albeit only to constrain compliance with a court order, if reasonable doubt exists about the essentials. In this regard, I am not satisfied that wilful disregard of the court order has been established. The second reason is coherence. It is practically difficult, and may be impossible, to disentangle the reasons why orders for committal for contempt are sought and why they are granted. In the end, whatever the applicant’s motive, the court commits a contempt respondent to jail for Rule of Law reasons; and this high public purpose should be pursued only in the absence of reasonable doubt. Accordingly, it is impermissible to find an alleged contemnor guilty of contempt in the absence of conclusive proof of the essential elements. The requisite elements must be established beyond reasonable doubt. In such a prosecution the alleged contemnor is plainly an ‘accused person. Third, accidental or unintentional disobedience is not sufficient to justify one for holding guilty of contempt. It is further relevant to bear in mind the settled law on the law of contempt that casual or accidental or unintentional acts of disobedience under the circumstances which negate any suggestion of contumacy, would amount to a contempt in theory only and does not render the contemnor liable to punishment. It should be noted that developing the common law thus does not require the prosecution to lead evidence as to the accused’s state of mind or motive: once the three requisites mentioned earlier have been proved, in the absence of evidence raising a reasonable doubt as to whether the accused acted wilfully and mala fide, all the requisites of the offence will have been established. And as O’Regan J pointed out, the power to imprison for coercive and non-punitive purposes is ‘an extraordinary one’:‘The power to order summary imprisonment of a person in order to coerce that person to comply with a legal obligation is far-reaching. There can be no doubt that indefinite detention for coercive purposes may involve a significant inroad upon personal liberty. Clearly, it will constitute a breach of s 12 of the Constitution unless both the coercive purposes are valid and the procedures followed are fair. In this case there seems no doubt that the purpose is a legitimate one. It also seems necessary and proper, however, for the exercise of the power to be accompanied by a high standard of procedural fairness.’ https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19582/eng@2025-09-29 6

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Contempt of court is not merely a mechanism for the enforcement of court orders. The jurisdiction of the superior courts to commit recalcitrant litigants for contempt of court when they fail or refuse to obey court orders has at its heart the very effectiveness and legitimacy of the judicial system. That, in turn, means that the court called upon to commit such a litigant for his or her contempt is not only dealing with the individual interest of the frustrated successful litigant but also, as importantly, acting as guardian of the public interest.” 29. It is a common ground that the Court issued conservatory orders on 25th October 2025, forbidding the transfers of the subject parcels of land. The applicants and the respondent agree that the said order was served on the 1st respondent on 30th October 2024 and that the transfers to the 2nd interested party were registered on 31st October 2025. The 1st respondent contended that it handed over the completion documents to the purchasers’ advocates on 16th October 2024 and that from that time onwards the processes resulting in the transfer of the suit properties were outside its control. 30. The 1st respondent contended that after service of the court order, it had not undertaken any dealings whatsoever with the subject properties. 31. I note that from the evidence tendered, the auction of the suit properties occurred on 14th August and 4th September 2024, way before any court had been issued in favour of the petitioners. It is evident that by the time the court orders were served on the 1st respondent, the transfer documents in respect of the suit properties had already been lodged at the Land Registry, and were awaiting registration by the Land Registrars of the respective registries where the properties are situated. It was averred that documents were lodged on the 22nd of October 2024. On the other hand, the Court orders were served on 30th October 2024, at 4.45 pm, and new titles were issued on 31st October 2024. It would thus appear to me that at the time the 1st respondent was served, the matter was outside its hands, as the decision whether to effect the impugned action lay with the Land Registrars, who were neither party to this suit nor were served with the court order. 32. Thus, whereas there were valid court orders which were clear and unambiguous, and although the 1st respondent was aware of the said Court orders, I am not at all certain that the 1st respondent breached any court order. I say so as the very act of registering the transfers lay with a different person/entity, that cannot be said to act, in the course of its work, under the directions of the 1st respondent. In my view, the “deliberate and wilful conduct” as an ingredient of civil contempt refers to a wilful act, rather than an omission. In my view, the 1st respondent would have been in breach if, after being served, it nevertheless handed over the transfer documents. That does not appear to be the case here. 33. With utmost respect to them, it would appear to me that the petitioners are victims of their own indolence as they “sat” on the orders instead of serving them on the respondents, the interested parties, and the Land Registrars, as soon as the court issued them. 34. Further, it is clear that from the evidence adduced and testimony of witnesses during the crossexamination of the bank’s officer and the director of the 2nd respondent that the actual transfer of properties was undertaken by the purchaser, who was neither party to the suit nor were they served with any court orders. 35. The petitioners/applicants bore the duty of proving that the 1st respondent and its directors were in contempt of Court. They had a heavy duty as the liberty of the directors depended on the cogency of the evidence tendered. The standard of proof required was almost as high as that required in criminal https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19582/eng@2025-09-29 7

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matters, as so succinctly put by the Court in Mutitika v Baharini Farm Limited [1985] KLR 227 where it was stated that:“ A contempt of court is an offence of a criminal character. A man may be sent to prison. It must be proved satisfactorily… it must be higher than proof on a balance of probabilities, almost but not exactly, beyond a reasonable doubt…” 36. My finding, therefore, is that the petitioners/applicants have not discharged the evidentiary burden to the required standard. I am not satisfied that there was deliberate and wilful disobedience of the court orders. I also doubt whether the 1st respondent’s omission upon being served with the court order can amount to a breach of the Court order. It is therefore my finding that the 1st respondent officials are not in contempt of the court orders. 37. Flowing from the foregoing, the orders that commend themselves to me are the following: a. The Notice of Motion dated 7th November 2024 is hereby dismissed; b. Conservatory orders are hereby lifted; and c. Matter to be set down for hearing of the main petition on a priority basis. 38. The costs of the application shall be costs in the cause. 39. It is so ordered. DATED AND SIGNED AT MOMBASA, THIS 29TH DAY OF SEPTEMBER 2025. JUDGMENT POSTED IN THE CTS PORTAL. GREGORY MUTAI JUDGE https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19582/eng@2025-09-29 8

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