In re DL Koisagat Tea Estate Limited & Paramount Bank Limited (Applicants) (Miscellaneous Civil Application E475 of 2026) [2026] KEHC 6952 (KLR) (Commercial and Tax) (30 April 2026) (Ruling) Neutral citation: [2026] KEHC 6952 (KLR) REPUBLIC OF KENYA IN THE HIGH COURT AT NAIROBI (MILIMANI COMMERCIAL COURTS) COMMERCIAL AND TAX MISCELLANEOUS CIVIL APPLICATION E475 OF 2026 MA OTIENO, J APRIL 30, 2026 IN THE MATTER OF THE COMPANIES ACT, 2015 AND IN THE MATTER OF DL KOISAGAT TEA ESTATE LTD .................................................. 1ST APPLICANT PARAMOUNT BANK LTD ............................................................. 2ND APPLICANT RULING 1. Before this Court is a Notice of Motion dated 28th April 2026, in which the Applicants, DL Koisagat Tea Estate Limited (the 1st Applicant/Chargor) and Paramount Bank Limited (the 2nd Applicant/ Chargee), seek an order for the extension of time to register a Charge dated 18th June 2015. 2. The application is predicated upon Sections 888(1)(a) and (2)(a)(i) & (b) of the Companies Act, 2015. The primary prayer is for the Court to extend the time for registration of the said Charge over land titles Eldoret Municipality Block 15/19-132 and 151-226 by a further thirty (30) days from the date of the order. 3. The grounds supporting the application, as deponed in the Affidavit of Liza Mutungi, sworn on 28th April 2026, are that the 2nd Applicant advanced Kshs. 120,000,000.00 to the 1st Applicant, secured by the Charge in question. While the Charge was duly registered at the Eldoret District Lands Registry on 18th June 2015, the Applicants inadvertently omitted to register the particulars of the Charge with the Registrar of Companies within the mandatory 30-day statutory period prescribed under Section 885(1)(a) of the Companies Act. 4. It is deponed that the omission was discovered recently during the preparation and registration of a Further Charge dated 9th April 2026, which secures an additional advance of Kshs. 80,000,000.00. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6952/eng@2026-04-30 1
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The Applicants contend that the delay was inadvertent, not deliberate, and that no prejudice will be caused to the company’s creditors or shareholders. Analysis and Determination 5. From the pleadings before Court, the sole issue for determination is whether this Court should exercise its discretion under Section 888 of the Companies Act, 2015, to extend time for registration of the Charge dated 18th June 2015. 6. This Court has the jurisdiction under Section 888 of the Companies Act to extend the time for registration of a charge if it is satisfied that the failure to register was accidental, due to inadvertence, or some other sufficient cause, and that it is not of a nature to prejudice the position of creditors or shareholders of the company. 7. The principles governing such applications are well settled. In Re Ashpurton Estates Ltd [1983] 1 Ch 110, the Court held that the jurisdiction to extend time is discretionary and should be exercised where the omission is inadvertent and no prejudice is occasioned. 8. Locally, the courts have consistently held that the purpose of registration is to give notice to third parties, and where no prejudice is demonstrated, the Court leans in favour of preserving securities (see National Bank of Kenya Ltd v Michael Ndungu [2018] eKLR). 9. In the present case, the Court notes from the material on record that the Charge dated 18th June 2015 was duly executed and registered at the Lands Registry, thereby perfecting the security in relation to the land. The omission relates solely to registration at the Companies Registry within the statutory period. 10. The explanation ofiered by the Applicants is that the omission was inadvertent and only came to light upon preparation of the Further Charge in April 2026. 11. There is no material before the Court to suggest that the omission was deliberate, fraudulent, or intended to defeat the interests of creditors. 12. On the question of prejudice, there is no evidence before the Court suggesting that any third-party rights have intervened or that the company has entered into liquidation. The registration is necessary to preserve the 2nd Applicant's security interest. 13. While the delay of over ten (10) years is inordinate, delay alone is not fatal where the Court is satisfied as to the absence of prejudice and the existence of sufficient cause. 14. The Court is guided by the principle that the discretion under Section 888 should be exercised to achieve substantive justice. The failure to register, though prolonged, has been sufficiently explained, and no competing interests have been demonstrated. 15. In the circumstances, the Court is persuaded that it is just and equitable to regularize the security, especially considering the substantial facilities advanced and the active nature of the commercial relationship between the parties as evidenced by the Further Charge. 16. Consequently, I find the application meritorious and grant the following orders: i. That the time for registration of the Charge dated 18th June 2015 created by DL Koisagat Tea Estate Limited in favour of Paramount Bank Limited over Land Title Numbers Eldoret Municipality Block 15/19-132 and 151-226 be and is hereby extended for a period of thirty (30) days from the date of this Ruling. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6952/eng@2026-04-30 2
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17. ii. That the Registrar of Companies shall, upon payment of the requisite filing fees, register the said Charge out of time. iii. That the Charge so registered shall be deemed as having been filed in full compliance with the Companies Act, 2015, without prejudice to any rights acquired in respect of the property intended to be charged prior to the actual date of registration. iv. That there shall be no order as to costs. It is so ordered. DATED, SIGNED, AND DELIVERED AT NAIROBITHIS 30TH DAY OF APRIL 2026 HON. MR. JUSTICE MOSES ADO JUDGE OF THE HIGH COURT https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6952/eng@2026-04-30 3
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