Cm Thuku & Company Advocates v Nairobi Upperhill Hotel Limited

5. To commit the directors to civil jail for not less than 6 months and attach their personal properties to settle the decretal sum of Kshs. 623,515.09/- with interest thereon from 23.5.2024 jointly and severally until payment in full. 6. To restrain the directors from selling, transferring and/ or in any way disposing of the respondent’s immovable assets until the decretal sum is fully settled. 7. To consolidate this file with Milimani MISC/E198/2022: CM Thuku & Company Advocates v Nairobi Upperhill Hotel. 2. The application is brought under Orders 22 Rule 35 and Order 40 of the Civil Procedure Rules. It is also anchored on Sections 148, 194, 323, 996 & 1002 of the Companies Act. 3. The application is supported by an affidavit sworn by Charles M. Thuku on 15.8.2025. 4. The grounds are: - 5. 1. The respondent was incorporated on 1.9.2010. Its directors and shareholders are Geoffrey Wahome Muotia and John Nderitu Muotia, who are kin/brothers. 2. The respondent has failed to satisfy the decree dated 15.8.2024 in full or at all and has failed to offer any reasonable and/or justifiable reason or excuse for the same. 3. The respondent’s principal asset and operational substratum is the hotel known as Nairobi Upperhill Hotel, which has since been attached and put up for sale by National Bank of Kenya 4. By its own evident conduct, the respondent is unable to satisfy the subject decree as it is financially struggling. 5. The respondent is being used as a creature of the controlling directors as a device and a sham, a mask which they hold before their face to avoid recognition by the eye of equity. 6. There has been improper conduct on the part of the respondent’s directors, and the corporate veil is being used to shield the said directors from execution of the decree. The applicant highlighted that it has come to court within a reasonable period and without undue delay. It asserted that the prayers sought will not prejudice the respondent since the decree has already been issued against it. It submitted that if the application is not allowed, it would suffer prejudice and that it is in the interest of justice that the application be allowed. No response 6. There was no response filed by the respondent despite service evidenced by a return of service of 27.10.2025. Analysis and Determination 7. I have considered the application and the grounds. The main issue for determination is whether the application for the orders for discovery of company assets is merited. Consolidation 8. The preliminary issue concerns the consolidation of the file with Milimani MISC/E198/2022: CM Thuku & Company Advocates v Nairobi Upperhill Hotel. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6840/eng@2026-05-14 2

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9. The court has the power to consolidate suits in appropriate cases to facilitate the just, efficient and expeditious disposal of the disputes. Law Society of Kenya v Center for Human Rights & Democracy & 12 Others [2014] eKLR. 10. The court considers, inter alia, whether there are common questions of law or fact, if the rights or reliefs sought are in respect of the same transactions or for other reasons it is desirable to consolidate them. Nyati Security Guards & Services Ltd v Municipal Council of Mombasa [2000] eKLR 11. Both this miscellaneous application and Milimani MISC/E198/2022: CM Thuku & Company Advocates v Nairobi Upperhill Hotel are between the same parties. Both proceedings were commenced by the applicant who represented the respondent in court. The applicant sought taxation of its bill of costs for the services rendered and obtained decrees dated 15.8.2024. 12. In Misc E198 of 2022, the subject matter of the bill of costs was Nairobi Civil Appeal 24 of 2018; Nairobi Upperhill Hotel Limited v Jovan H. Kariuki t/a Moran Auctioneers. The costs were taxed and allowed at Kshs. 623,515.09/= with interest accrued thereof from 23.5.2024 and attendant auctioneers’ costs jointly and severally until payment in full. 13. In this file, the subject matter of the bill of costs was Muotia t/a Nairobi Upperhill Hotel Ltd v National Bank of Kenya Ltd & another (Land Case E163 of 2024) [2024] KEELC. The costs were taxed and allowed in the sum of Kshs. 623,535.09. 14. In my considered view, the two matters are fit for consolidation for their just, efficient and expeditious disposal. Discovery of company assets 15. The court may order the examination of a director of a judgment-debtor company or any officer thereof in court to provide answers in respect to the company’s ability or means to satisfy the decree. Order 22 Rule 35(b) and (c) of the Civil Procedure Rules Threshold 16. The threshold for the grant of orders for the discovery of company assets is that: “ as long as the Applicant has shown that the Respondent is in a position to provide information in the nature of discovery ...as to whether any or what debts are owing to the judgment-debtor, and whether the judgment-debtor has any and what property or means of satisfying the decree, the court should summon the person to attend and be examined in relation to the purpose stated in the rule.” Margaret Soares v Jane Otieno [2014] KEHC 6225 (KLR) 17. The applicant exhibited a copy of the decree dated 15.8.2024. 18. The applicant exhibited a copy of the respondent’s list of directors/ shareholders (CR12) for the years 2025 and 2022 showing that its registered directors are Geoffrey Wahome Muotia and John Nderitu Muotia. 19. According to the applicant, between February 2025 and July 2025, Mr. Geoffrey Wahome Muotia proposed to settle the decree through phone and email but did not follow through hence not serious. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6840/eng@2026-05-14 3

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20. The applicant further mentioned that the respondent’s substratum being the hotel known as Nairobi Upperhill Hotel is in the process of being sold by the National Bank of Kenya Limited, one of its creditors. 21. Considering the evidence exhibited, the court finds that the applicant has met the threshold for the grant of the discovery orders under prayer 4 of the application. Lifting of the corporate veil and restraining orders 22. The court may grant both the orders for lifting of the corporate veil and orders to restrain the directors from selling company assets concurrently with the orders for examination. 23. For the court to grant these orders concurrently, the applicant ought to demonstrate, inter alia, i. fraud or improper conduct or “the character of the company or the nature of the persons who control it is a relevant feature.” Arun .C. Sharma v Ashana Raikundalia & 5 others [2015] KEHC 5039 (KLR) 24. From the material presented before the court, there is a real risk of dissipation of the company’s assets by the directors. Nonetheless, injunctive relief should be considered after examination of the directors which may provide the functional foundation for injunctive relief. 25. According to the applicant, the respondent’s known and main asset is the Nairobi Upperhill Hotel, and it is under statutory sale by the respondent’s chargee and creditor, National Bank of Kenya. The process of discovery will enable the court to establish from the examination of the directors whether there are other assets of the company or means to pay the decree. 26. In these circumstances, the court also finds that, it is appropriate that the issue of lifting the respondent’s corporate veil and restraining orders be deferred for consideration after the examination of the directors. Disposal 27. In conclusion, the application dated 15.8.2025 is allowed in the following terms: 1. Geoffrey Wahome Muotia & John Nderitu Muotia being the Directors of Nairobi Upperhill Hotel Limited the Respondent/Judgment-Debtor herein do attend this Honourable Court and be orally examined on oath as to whether the Respondent has any and what property or means of satisfying the decree herein and to produce the respondent’s books of accounts, bank statements and other documentary evidence showing the status of the respondent’s business before the Court. 2. Prayer of lifting the corporate veil as well as injunctive relief are deferred to be determined after the examination of the directors of the respondent company. DATED, SIGNED AND DELIVERED AT NAIROBI THROUGH MICROSOFT TEAMS ONLINE APPLICATION THIS 14TH DAY OF MAY, 2026 F. GIKONYO M JUDGE In the presence of: Ms. Thuku for Advocate/Applicant https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6840/eng@2026-05-14 4

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No appearance for Client CA-Ivan/Aggrey https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6840/eng@2026-05-14 5

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