Abdirazak Abdullahi v Said Mohamed Osman & 2 others

4. That the Partnership Agreement was for purposes of carrying on the business of tea warehousing and handling on the suit land and that the Applicant undertook extensive repairs, and renovation of the business premises and installed machineries on the suit land in preparation for commencement of the partnership business. 5. The Applicant stated that for purposes of giving effect to the Partnership Agreement, the Applicant and the Respondents agreed to incorporate a limited liability company known as Blue Port Logistics Ltd, to which both the Applicant and the Respondents would jointly carry out the business. That the Applicant had a legitimate expectation that he would be joint partners with the Respondents in the partnership agreement, with whom he would exclusively co-own the partnership agreement and the suit land through Blue Port Logistics Ltd. 6. According to the Applicant, Clause (18) of the Partnership Agreement expressly provides that in case of any dispute in connection with the Partnership Agreement, such dispute shall be referred to the decision of a single arbitrator to be appointed by the president for the time being of the institute of Arbitrators and the award of such arbitrator shall be final and binding on the parties. That the Applicant by the letter dated 14th October 2024 requested the Chairperson of the Chartered Institute of Arbitrators to appoint an arbitrator. 7. The Respondents also filed a Notice of Motion application dated 18th November 2024 under Sections 3A and 63 (e) of the Civil Procedure Act and Order 10 Rule 11, Order 22 Rule 6, Order 40 Rule 1 and Order 51 Rule 1 of the Civil Procedure Rules, and all other enabling provisions of the law. 8. The Respondents seek for orders that the Applicant pays monthly rent of Kshs. 1,500,000 per month and that this court vacates the ruling issued on 4th November 2024 by Hon. Justice Ng’arng’ar and any consequential decree or orders. 9. The application is based on grounds that the Respondents entered into a partnership agreement dated 10th December 2020 with the Applicant and that terms of the agreement provided that should a dispute arise, it should be referred to an arbitrator to be appointed by the president or for the time being of the institute of arbitrators and the award shall be final and binding. 10. That the Applicant has unprocedurally filed a suit via originating summons and an application before this court and the same ought to be struck off for lack of jurisdiction. That the orders issued on 4th November 2024 of maintaining the status quo are a detriment to the property of the Respondents and an affront to the interest of justice. 11. The Respondents further stated that the partnership broke down when the Applicant concealed profits he obtains from the business and only misused the property for his own benefit. That it was agreed that the property would be used as a site for carrying on the business as per Clause 3 of the partnership agreement and that it was not the terms of the agreement that the applicant’s property would be transferred to the business. That the property should therefore not be the subject of conservatory orders and that a status quo to be maintained in the suit property is only sufficient to a party who has an interest in the property capable of being registered. 12. The Respondents stated that the only asset of the Applicant is movable machinery whose value cannot be equated to the value of the property of Ksh 200,000,000 that is deteriorating as a results of the respondent’s forcible detainer. That the Applicant’s need for preservation of the subject matter would require him to remit a monthly rent of Kshs. 1,500,000 or deposit security equivalent to six months’ rent to the Respondents or to this court. The Respondents stated that it is common law principle that if https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4251/eng@2026-02-26 2

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one partner continues to use property of the partnership after dissolution, claims of unjust enrichment may arise. 13. In opposition to the Respondent’s application, the Applicant filed a Replying Affidavit sworn on 6th May 2025 where he reiterated contents of their Originating Notice of Motion application dated 30th October 2024. 14. The applications were canvassed by way of written submissions. The Applicant in his submissions dated 13th May 2025 submitted that this court has jurisdiction to issue interim orders as sought pending hearing and determination of the dispute by the arbitral tribunal. 15. The Applicant further submitted that the Respondents have conceded that there is an existing partnership agreement between the parties herein with the subject suit property being Plot No. 1195/ VI/MN Port-Reitz. That the Respondents have confirmed that the agreement provides for resolution of dispute by way of arbitration and that it is only prudent that matter be referred to arbitration with an order preserving the substratum of the dispute. The Applicant urged the court to allow their application as prayed. 16. The Respondents in their submissions dated 10th June 2025 argued that this court lacks jurisdiction to grant stay orders on the basis of the arbitration clause in the partnership agreement. The Respondents submitted on whether the execution of the partnership agreement conferred ownership/registrable interest to the Applicant by citing the case of Wringles Company (East Africa) v Attorney General & 33 others (2013) eKLR where the court stated that courts cannot rewrite what has already been agreed upon by the parties as set out in the agreement. 17. That if the partnership automatically conferred ownership to the Applicant, there would have been an express provision on the same in the agreement. The Respondents further relied on the case of Joseph Odero v Megvel Cartons Limited where the court declined to grant conservatory orders as the applicant failed to prove ownership over disputed land. 18. On whether the Respondents are entitled to security deposit, the Respondents argued that Order 42 Rule 6 (2) of the Civil Procedure Rules establishes the principles of security deposit to balance the interest of parties pending the conclusion of legal proceedings. Analysis 19. 20. Having considered the Originating Summons, the Notice of Motion, Replying Affidavits sworn and submissions by the parties, the issues for determination are; a. Whether this court has jurisdiction b. What interim orders should issue c. Who should bear costs Parties have concurred that they entered into a Partnership Agreement dated 10th December 2020 and that the agreement provides that disputes of their partnership shall be resolved through arbitration. This court has perused the Partnership Agreement and established that Clause 18 provides for Arbitration as follows: “ If any dispute or difference shall arise out of or in connection with this agreement, such dispute or difference shall be and is referred to the decision of a single arbitrator to be https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4251/eng@2026-02-26 3

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appointed by the president for the time being of the institute of Arbitrators and the award of such arbitrator shall be final and binding on the parties.” 21. According to the Respondents, the Applicant has unprocedurally filed a suit via Originating Summons and the application before this court ought to be struck off for lack of jurisdiction. The Applicant in rebuttal submitted that this court has jurisdiction to issue interim orders as sought pending the hearing and determination of the dispute by the Arbitral tribunal. 22. Contrary to assertions by the Respondent, this court has jurisdiction to issue interim orders herein. Section 7 (1) of the Arbitration Act provides so as follows; “ It is not incompatible with an arbitration agreement for a party to request from the High Court, before or during arbitral proceedings, an interim measure of protection and for the High Court to grant that measure.” 23. The Applicant is seeking for an order of temporary injunction pending the inter parties hearing and determination of the Arbitral proceedings. It is the Applicant’s contention that the Respondents have unlawfully and maliciously set in motion the sale of parcel of land known as Plot No. 1195/VI/ MN Port Reitz to a third party with the sole intention of prematurely and unlawfully dissolving the partnership between the parties herein. 24. The Respondent was of the view that the orders issued on 4th November 2024 maintaining the status quo are a detriment to the property of the Respondent and an affront to the interest of justice. The Respondent stated that maintaining status quo in the property is only sufficient to a party who has an interest in the property capable of being registered. The Respondent urged that the Applicant’s need for preservation of the subject matter would require him to remit a monthly rent of Kshs. 1,500,000 or deposit security equivalent to six months’ rent to the Respondent or to this court. 25. This court in its mandate to issue interim orders is required to preserve the subject matter of arbitration while protecting the interest of both parties. Order 40 Rule 1 of the Civil Procedure Rules provides for temporary injunctions as follows: Where in any suit it is proved by affidavit or otherwise: - 26. a. that any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or b. that the defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit,the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further orders. The principles that govern grant of orders of injunction were articulated in the celebrated case of Giella v Cassman Brown (1973) EA 358 that: “ First, an applicant must show a prima facie with a probability of success. Secondly, an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury, which would not adequately be compensated by an award of https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4251/eng@2026-02-26 4

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damages. Thirdly, if the court is in doubt, it will decide an application on the balance of convenience.” 27. On whether the Applicant has established a prima facie case, the Court of Appeal in Mrao Ltd v First American Bank of Kenya Ltd & 2 others (2003) eKLR defined prima facie case as follows: “ A prima facie case in a civil application includes but is not confined to a genuine and arguable case. It is a case which, on the material presented to the court, a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter.” 28. This court is required to assess whether the dispute between the parties is genuine and worth of protection pending arbitration. There is a partnership agreement which establishes the rights and obligations of the parties. Although the land belongs to the Respondents, the Applicant owns machinery on the land and has been conducting business there, therefore the Applicant’s rights under the partnership could be jeopardized. 29. There are allegations of imminent sale of the property, therefore the subject matter of arbitration is at risk of being altered or destroyed. It is on those reasons that this court is of the view that the Applicant has established a prima facie case with probability of success. 30. On the second issue of whether the Applicant will suffer irreparable injury, the Court of Appeal in Nguruman v Jan Bonde Nielsen & 2 others (2014) eKLR held; “ … if the applicant establishes a prima facie case that alone is not sufficient basis to grant an interlocutory injunction, the court must further be satisfied that the injury the respondent will suffer, in the event the injunction is not granted will be irreparable. In other words, if damages recoverable in law are an adequate remedy and the respondent is capable of paying, no interlocutory order of injunction should normally be granted, however strong the applicant’s claim may appear at that stage.” 31. This court is satisfied that the Applicant stands to suffer irreparable harm if the suit property is sold before the determination of the arbitral proceedings. The threatened sale would alter the subject matter of the dispute, prejudice the Applicant’s proprietary interest in the machinery on the land, and introduce third-party rights that may render the arbitration nugatory. Such harm cannot be adequately compensated by an award of damages. 32. Having found that the Applicant has established a prima facie case and that he is likely to suffer irreparable harm if the property is sold, this court finds that the balance of convenience tilts in favour of preserving the status quo. The Respondents will suffer minimal prejudice if restrained from selling the property pending arbitration, whereas the Applicant stands to suffer substantial and potentially irreversible prejudice if the sale proceeds. Accordingly, the balance of convenience favours the grant of an interim injunction. 33. Further, in the spirit of balancing the interest of parties, considering an injunction will delay the Respondents from dealing with their property while the Applicant will continue to benefit from access to or use of the land, the Applicant shall provide security for due performance in a form and amount to be determined by this court. Determination 34. Accordingly, this court makes the following orders: - https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4251/eng@2026-02-26 5

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a. The Originating Summons dated 30/10/2024 is allowed on the following terms; i. An order of temporary injunction is hereby issued pending the hearing and determination of the arbitration. ii. That the above is subject to the deposit of security as per order (b) below. b. The Notice of Motion dated 18/11/2024 is partially allowed in terms of prayer no. 3. The Applicant to deposit as security for due performance in the sum of Kshs. 9,000,000 by way of bank guarantee, to be deposited in court within the next 45 days. c. Each party to bear their costs. DATED AND DELIVERED VIRTUALLY AT MOMBASA THIS 26TH DAY OF FEBRUARY, 2026 ……………………….. HON. F. WANGARI JUDGE OF THE HIGH COURT In the presence of: Ms. Ndege Advocate h/b for Mr. Mathenge Advocate for the Applicant Mr. Lungwe Advocate for the Respondents Ms. Salwa, Court Assistant https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/4251/eng@2026-02-26 6

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