High Court 11671 of 2026

ITA E327 OF 2025 the corporate veil of the 1st Defendant and strike his name from these proceedings. 2. This Ruling resolves both motions, determining whether an emailed promise to pay constitutes an unequivocal admission of debt, and whether a director who personally drives such fiscal negotiations can prematurely exit the stage before the curtain rises on the full trial. Background Facts 3. This Ruling is in respect of two interlocutory applications before the Court. The first is the Plaintiff’s Notice of Motion dated 8th May, 2025, brought under Order 13 Rule 2, Order 36 Rule 5, and Order 51 Rule 1 of the Civil Procedure Rules, and Section 3A of the Civil Procedure Act. The said Motion seeks the following orders: (a) THAT this Honourable Court be pleased to enter judgment by admission in favour of the Plaintiff/Applicant against the Defendant/Respondents for Kshs. 10,000,000/= plus interest at commercial rates from the date of default until payment in full. (b) THAT Costs of this application be provided for. Page 2 of 9

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ITA E327 OF 2025 4. The second application is the 2nd Defendant’s Notice of Motion dated 8th May, 2025, brought under Section 3A of the Civil Procedure Act, Order 1 Rule 10(2), Order 51 of the Civil Procedure Rules and Sections 34, 35 and 194 of the Companies Act, seeking the following orders: (a) THAT the name of the 2nd Defendant/Respondent be struck off from the pleadings herein. (b) 5. THAT Costs be provided for. The underlying dispute revolves around a claim by the Plaintiff for the sum of Kshs. 38,387,066.10 arising from the supply of alcoholic beverages to the 1st Defendant between November 2023 and January 2024. The debt was initially secured by bank guarantees which subsequently expired. Following the expiry, the 2nd Defendant (a director of the 1st Defendant) engaged the Plaintiff in correspondence. On 16 September, 2024, the 2nd Defendant wrote to the Plaintiff stating, "Dear Team, Greetings this morning. I write in reference to the subject email and the meeting thereof. Page 3 of 9

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ITA E327 OF 2025 In regards to the guarantees, please allow me to handle the Sumac issues separately. I was dismayed by their response and would however not wish our business with you to be affected. In this regard, as requested earlier if allowed, my payment plan still stands. I will deposit 10M immediately (By Wednesday 18th September 2024). We can have a meeting in your office and have a discussion on the agreeable time frame for the balance. It is my prayer that we will continue to do business together." 6. The Plaintiff contends that this statement constitutes a clear and unequivocal admission of part of the debt, entitling it to judgment on admission. The Defendants oppose this, asserting the email was merely a proposal made in good faith during negotiations and does not amount to a legal admission of liability. Concurrently, the 2nd Defendant seeks to be struck out of the suit, arguing that the 1st Defendant is a separate legal entity capable of being sued. That he cannot be held personally liable for the company's debts. The Plaintiff opposes the striking Page 4 of 9

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ITA E327 OF 2025 out, contending that the 2nd Defendant acted as the alter ego of the 1st Defendant, having personally negotiated the debt and made personal payment commitments. Issues for Determination 7. The Court has carefully considered the two applications, the responses made, the written submissions and the oral highlights by Counsel for the parties. The Court frames two issues for determination as follows: (a) Whether Judgment should be entered on the sum of Kshs.10,000,000/= said to be admitted. (b) Whether the name of the 2nd Defendant should be struck off the suit. Analysis 8. The two applications call for the exercise of the Court’s discretion and hence the reliefs sought do not lie as of right. a) Whether Judgment should be entered on the sum of Kshs.10,000,000/= said to be admitted. Page 5 of 9

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ITA E327 OF 2025 9. Under Order 13 Rule 2 of the Civil Procedure Rules, the Court has the discretion to enter judgment where admissions of fact have been made either on the pleadings or otherwise. The guiding principle was authoritatively settled by the Court of Appeal in Choitram & another v Nazari [1984] KECA 47 (KLR), where Madan, JA stated as follows: "For the purpose of Order XII Rule 6, admission can be expressed or implied either on the pleadings or otherwise, e.g. in correspondence. Admissions have to be plain and obvious, as plain as a pikestaff and clearly readable because they may result in judgment being entered. They must be obvious on the face of them without requiring a magnifying glass to ascertain their meaning. Much depends upon the language used. The admissions must leave no room for doubt...". 10. Further, as correctly cited by the Defendants, the High Court in Express Automobile Kenya Limited v Kenya Farmers Association Limited [2020] KEELC 1080 (KLR) Page 6 of 9 & emphasized another that an

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ITA E327 OF 2025 admission must reflect a conscious and deliberate act showing an intention to be bound. 11. In examining the email of 16 September, 2024, the 2nd Defendant unequivocally states, "I will deposit 10M immediately". The language is direct, unconditional, and leaves no room for doubt. It is not framed as a tentative proposal contingent on further action, but as a firm, conscious commitment to pay a specific sum by a specific date. 12. It is not denied that the 2nd Defendant, being a Director of the 1st Defendant, has authority to bind the 1st Defendant in negotiations for payments. The email is directed to the Plaintiff and persons within its organisation. It makes reference to an earlier meeting. It offers a solution to the debt claimed. It leaves no doubt in this Court of an outcome between two entities seeking the resolution for a money claim. Here is a Debtor maintaining that it will pay a portion and seeking a favourable accommodation in terms of a continuation of business. Page 7 of 9

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ITA E327 OF 2025 13. Applying the Choitram threshold, this Court finds that the statement is as plain as a pikestaff and constitutes a clear admission of liability to the extent of Kshs. 10,000,000/=. (b) Whether the name of the 2nd Defendant should be struck off the suit. 14. The power to strike out a party under Order 1 Rule 10(2) or to strike out pleadings under Order 2 Rule 15 of the Civil Procedure Rules is a draconian remedy. It has been often said by the Courts that this power should be exercised with the greatest care and caution, and only in the clearest of cases where a claim is a complete sham. The 2nd Defendant relies on the established principle in Salomon Vs Salomon & Co. Ltd (1897) AC 22 regarding separate corporate personality. However, as the High Court noted in Multichoice Kenya Limited v Mainkam Limited & Another [2013] KEHC 4015 (KLR), the corporate veil can be lifted where it is used as a cloak for fraud, improper conduct, or where the director acts as the alter ego of the company. Page 8 of 9

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ITA E327 OF 2025 15. It is submitted that the 2nd Defendant is the sole director and shareholder of the 1st Defendant. The correspondence demonstrates that he personally engaged the Plaintiff. It is submitted that he made personal undertakings. It remains to be proved whether the 2nd Defendant is personally liable. In the event it turns out that he is not liable for the debt and his addition as a party was wholly unnecessary, he can be adequately compensated by way of costs at the conclusion of the trial. The Plaintiff has successfully raised bona fide triable issues regarding the 2nd Defendant's personal liability and his role as the alter ego of the company. Striking him out at this interlocutory stage would be premature and would deny the Plaintiff the right to ventilate these issues at a full trial. As matters currently stand he is a necessary party and no prejudice would be suffered by retaining him in the suit. 16. As to costs, the same lie at the discretion of this Court and ordinarily follow the event. The Plaintiff as a successful party in both applications is awarded costs, to await the outcome of the trial. Page 9 of 9

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ITA E327 OF 2025 Determination 18. In view of the foregoing, the Court makes the following orders in respect to the two applications dated 8th May, 2025: 1. The Plaintiff’s application by way of a Notice of Motion dated 8th May, 2025 is allowed in the following terms: (a) Judgment on admission is HEREBY entered in favour of the Plaintiff against the 1st Defendant, for the admitted sum of Kshs. 10,000,000/=. (b) The said sum of Kshs. 10,000,000/= shall attract interest at Court rates from the date of filing the suit until payment in full. (c) The balance of the Plaintiff's claim shall proceed to full trial. (d) The costs of the Motion and the admitted sum are awarded to the Plaintiff to await the outcome of the trial. 2. The 2nd Defendant's application by way of a Notice of Motion dated 8th May, 2025 seeking to be struck out from the proceedings is HEREBY dismissed for lack of Page 10 of 9

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ITA E327 OF 2025 merit. The costs of the application are awarded to the Plaintiff. 19. It is so ordered. DATED, SIGNED AND DELIVERED AT MILIMANI THIS 27TH DAY OF JULY, 2026. NJOROGE BENJAMIN K. JUDGE In the presence of: Mr. Macharia for the Plaintiff. Mr. Obuli for the Defendants. Mr. John Paul - Court Assistant. Page 11 of 9

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