Commercial & Tax Division v Co-operative Bank of Kenya Limited & 2 others

PET NO.E020 OF 2023 2. The Applicant filed the Notice of Motion dated 11 th March, 2025 seeking the following orders; a) The court do strike out and/or expunge from the Court's record, the name of the 4th Respondent in these particular proceedings. b) The Court to order the Petitioner to pay for the costs of this Application. 3. The Application was supported by the Affidavit of Mary Imende. She deponed that the 4th Respondent statutory mandate is limited to regulating and supervising banking institutions, promoting financial stability, and safeguarding depositors’ interests. The dispute before the Court concerns the attachment and transfer of 34,816,200 shares arising from loan recovery proceedings between the Petitioner and the 1st and 2nd Respondents, matters which fall outside the scope of its regulatory functions. 4. The 4th Respondent further argues that the Petition and accompanying Application fail to disclose any specific wrongdoing, obligation, or constitutional violation attributable to it. According to the 4th Respondent, the Page 2 of 16

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PET NO.E020 OF 2023 pleadings merely establishing a mention precise it in the heading cause of action. without There is no demonstration of how it allegedly infringed the Petitioner’s rights, contrary to the requirement for precision in constitutional Petitions. 5. Consequently, the 4th Respondent maintains that it was wrongly joined in the proceedings. This is because the dispute is solely between the Petitioner and the 1 st and 2nd Respondents regarding ownership and attachment of the shares. It asserts that its continued inclusion in the suit serves no useful purpose, would prejudice the expeditious disposal of the matter, and therefore urges the Court to strike out its name from the proceedings in the interests of justice 6. The Respondent responded to the Application vide the ‘Notice of Motion’ dated 20th January 2026. It is filed by MR. RUO MAINA who describes himself as an intercessor/interlocutor for the Plaintiffs appearing in person herein. He must be referring to the Petitioner as there is no Plaintiff in this Petition. He challenged the competence of the Page 3 of 16

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PET NO.E020 OF 2023 4th Respondent’s affidavit sworn by Ms. Mary Imende. He contends that she lacked the requisite authority, including a valid Power of Attorney, to swear the affidavit or represent the Central Bank of Kenya before the Court. The Petitioner therefore argued that the affidavit is inadmissible, null and void, and ought to be struck out from the record. 7. The Petitioner further alleged that the 4th Respondent, together with the 1st, 2nd, 3rd and 5th Respondents, was complicit in the unlawful handling and continued detention of 34,816,200 stock shares allegedly belonging to the Petitioner. The regulators failed to numerous Court orders, caveats, intervene and despite requests for assistance, thereby contributing to financial losses and violating the Petitioner’s constitutional and economic rights. 8. Additionally, the Petitioner seeks various orders against the Respondents. This is including disclosure of regulatory reports, release of the disputed shares, and compensation for alleged losses amounting to Kshs. 50 billion. It also claims summary judgment on the basis that the Respondents allegedly failed to contest the Petition Page 4 of 16 properly. The

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PET NO.E020 OF 2023 Petitioner maintained that the continued delay in resolving the matter has caused significant prejudice and undermined confidence in the administration of justice. Issues for determination 9. The Court has carefully considered the Application, response, and the submissions therewith, and the single issue for determination is; a) Whether the 4th Respondent/Applicant should be struck out from the proceedings. Analysis 10. The Applicant's case was that it has been improperly and unnecessarily joined to these proceedings. That there is no cause of action disclosed against it. It has no direct involvement in the underlying dispute. That its joinder serves no useful purpose but to prejudice the expeditious disposal of this suit. Page 5 of 16

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PET NO.E020 OF 2023 11. It is undisputed that the Petitioner’s Petition arises from proceedings in HCC No. 343 of 2002 and HCCC No. 1822 of 2022 involving the Petitioner/Applicant and the 1 st and 2nd Respondents. It is concerning 34,816,200 shares, which form the core of the dispute between the parties. The dispute herein relates to the recovery of the sums allegedly owed to the Petitioner. It also involves the proposed transfer and/or attachment of the said shares held in the 1 st Respondent’s CDS account for purposes of realizing loan facilities advanced to the SACCOs that own the said shares. 12. It was the Applicant’s argument that the Petitioner's grievances are unrelated to the 4 th Respondent's statutory and its supervisory powers under Part VII of the Banking Act. The 4th Respondent, as the regulatory authority, is mandated to oversee banking institutions to ensure their soundness, safeguard the integrity of the banking system, and protect the interests of depositors. The aforesaid role does not extend to the Petitioner's quest to enforce or attempt to attach the 34,816,200 shares. That stocks shares Page 6 of 16

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PET NO.E020 OF 2023 falls outside the purview of the 4 th Respondent's regulatory functions. 13. In contrast, the Petitioner maintained that it would occasion a grave miscarriage of justice and bring the administration of justice into disrepute were the 4 th Respondent to be struck out from these proceedings. This is in light of the substantial evidence demonstrating that the 4th Respondent, acting in concert and collusion with the 1 st, 2nd, 3rd and 5th Respondents, orchestrated and/or facilitated the loss of the Petitioner’s Kshs.34,816,200 stock shares. This is together with the unlawful disposal of a further 35% shareholding belonging to the co-operative movement in Kenya to cronies and foreign investors. The Petitioner further averred that the said actions were undertaken with the connivance of the Central Bank of Kenya. That the Respondents ought therefore to be held accountable for the resultant loss and damage. 14. Should the 4th Respondent be struck out from the suit? The power to strike out a Respondent from proceedings is Page 7 of 16

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PET NO.E020 OF 2023 anchored in Order 1 Rule 10(2) of the Civil Procedure Rules, which provides: The court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the court to be just, order that the name of any party improperly joined, whether as plaintiff or defendant, be struck out, and that the name of any person who ought to have been joined, whether as plaintiff or defendant, or whose presence before the court may be necessary in order to enable the court effectually and completely to adjudicate upon and settle all questions involved in the suit, be added. 15. The import of the above provisions is that this Court has the requisite jurisdiction and discretion to either have a party improperly before it struck out from the proceedings or have a necessary party joined in the proceedings. In order to aptly determine this application, the Court has to first establish who is “a necessary party” to a suit and whether the 4 th Respondent is “a necessary party” to this suit. 16. The case of Amon v Raphael Tuck & Sons Ltd (1956) 1 AII ER 273 defined “a necessary party” as follows; Page 8 of 16

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PET NO.E020 OF 2023 “What makes a person a necessary party? It is not of course, merely that he has relevant evidence to give on some of the questions involved; that would only make him a necessary witness. It is not merely that he has an interest in the correct solution of some question involved and has thought of relevant arguments to advance and is afraid that the existing parties may not advance them adequately … the Court might often think it convenient or desirable that some of such persons should be heard so that the court could be sure that it had found the complete answer, but no one would suggest that it would be necessary to hear them for that purpose. The only reason which makes it necessary to make a person a party to an action is so that he should be bound by the result of the action, and the question to be settled, therefore, must be a question in the action which cannot be effectually and completely settled unless he is a party." 17. Further, in Perry Vs Carson (1962) EA 515 CF the Court held: “An application to remove a party cannot be allowed unless it will leave the suit intact”. Page 9 of 16

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PET NO.E020 OF 2023 18. The Court has also considered the decision by Sergon J. in FERMENTO INVESTMENT LTD. v KENYA RAILWAYS CORPORATION [2008] KEHC 999 (KLR). 19. The Court has carefully perused the Petition. It is of the considered view that from the reliefs sought by the Petitioner, none are directed at the Applicant so as to disclose a cause of action. This Court even upon examining the pleadings, notes that no reasonable cause of action involving the Applicant can be inferred. The Petitioner only links the Applicant to the Petition in its response to this Application and not originally in the Petition. In doing so, the Court is not conducting a mini-trial of the Petitioner’s case, rather the Court is seeking to discern whether the Applicant is a necessary party to the Petition. Whether the case can be sustained without the 4th Defendant or it would collapse. In doing so, the Court calls into play the exercise of its discretion. This discretion calls for the Court to fall back into its bottomless reservoir of wisdom and common sense. It is that common sense that allows the Court to always make decisions that further the cause of justice. The Court borrows Page 10 of 16

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PET NO.E020 OF 2023 and follows the decisions of its peers and the Appellate Courts all the way to the Apex Court. This includes the current pronouncements as well as decisions made well into the past. 20. The beauty of the institution that is the Judiciary is that it builds on its collective knowledge and has been doing so for a long time now. The Judiciary does not change officers and offices every Five (5) years or every election cycle. Long before the advent of Artificial Intelligence (AI) the Court had been building on this source of wisdom and knowledge that allows it to exercise its discretion, not whimsically or capriciously, but judiciously and after consideration of relevant matters and facts. 21. The power and authority to determine if a party is a necessary party has been given to this Court. The Court has been asked by the Applicant to exercise it. The Court has given this matter considerable thought. 22. The Court makes a note that it gave directions to the 4th Respondent/Applicant and the Petitioner to file written submissions. It also directed that the submissions be Page 11 of 16

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PET NO.E020 OF 2023 highlighted on 24th November, 2026. The highlighting was to be physical. 23. MR. RUO MAINA who has several matters before this Court was given a solemn opportunity to come to Court and ventilate his submissions physically before the Judge. It is not an opportunity given to every party seeing that most matters are handled virtually. The Court was minded that he is a lay person navigating the complexities of our Court system in a Commercial Court and in a dispute involving large amounts of monies as per the Petitioners pleadings. He refers to himself as a Senior citizen. He pleads of himself as follows; “1. THAT I, RUO MAINA an intercessor/interlocutor for the Plaintiffs appearing in person herein, do hereby certify that this Application is extremely urgent and should be heard forthwith. 2. THAT under Article 4,10,21,23,40,50 and 57 of the Page 12 of 16

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PET NO.E020 OF 2023 Constitution of Kenya 2010 which guarantee personal liberties, obligates the state to take measures to ensure Senior Citizens participation in personal development and accord them dignity, respect, protection and this Honorable Court is therefore obligated to provide care and reasonable assistance to Senior Citizens.” 24. The Court was therefore according him an opportunity to present himself to the seat of justice. To plead his case. That date was set aside for several of his matters or matters where he was appearing in person as representing the Petitioner. 25. In a strange twist of events, MR. RUO MAINA did not turn up in Court to make his oral submissions. Not in this matter or the other several matters in which he appeared and were listed before the Court on that day. 26. The Applicant represented by Mr. Garat did attend Court and orally highlighted its submissions. The Court has Page 13 of 16

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PET NO.E020 OF 2023 considered the oral highlights. It also considered the response. 27. Therefore, the Court concludes that the 4 th Respondent is not a necessary party to the Petition. It is also evident from the facts of the case that the Court can effectively determine all the issues in the suit without the participation of the Applicant. 28. The Application is hereby allowed and the 4 th Respondent struck out from this suit. 29. As to costs, the same lie at the discretion of this Court. Costs ordinarily follow the event. The Applicant is entitled to the costs of the application. 30. The Court now urges the remaining parties to expedite the hearing of this Petition so that the Court can issue a determination thereof. This matter has been kept “live” through numerous bulky correspondence and applications. Such may not move this matter to a hearing on its merits. A trial by correspondence to the Court may not necessarily move parties towards a hearing and determination on merits. Let parties keep their eyes on the ball, present their Page 14 of 16

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PET NO.E020 OF 2023 case before the Court and play their part in presenting their best case forward. It is that duty owed to the Court by each party that enables the Court achieve one of its objectives, being delivering justice expeditiously. Determination 31. The 4th Respondent/Applicant’s application by way of a Notice of Motion dated 11th March, 2025 is allowed in the following terms; a) THAT the Court HEREBY strikes out and/or expunges from the Court's record, the name of the 4 th Respondent in these particular proceedings. b) THAT the Court HEREBY orders the Petitioner to pay for the costs of this Application. 32. It is so ordered. DATED, SIGNED AND DELIVERED AT MILIMANI THIS 14TH DAY OF MAY, 2026. NJOROGE BENJAMIN K. JUDGE In the presence of; N/A for the Petitioner/Respondent. Mr. Kiche for the 1st and 2nd Respondent. Mr. Cheruto for the 4th Respondent/Applicant Page 15 of 16

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PET NO.E020 OF 2023 Ms. Susan Nzioka – Court Assistant. Page 16 of 16

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