Equip Agencies Limited & 5 others v I & M Bank Limited & 1 other

1. This Ruling is in respect of the Plaintiffs’ Notice of Motion dated 2nd April 2025 seeking the following orders: i. An order restraining advertising, selling, the Bank from transferring or otherwise interfering with L.R. No. 214/172, Muthaiga; ii. A declaration that the appointment of Direct “O” Auctioneers is unlawful; iii. Leave to file further applications for variation of orders notwithstanding a prior bar; iv. A finding that new material facts have arisen warranting reconsideration of the matter; and v. Leave to deposit substituted or additional security in the form of L.R. No. 209/4151 [I.R. No. 9256], Kshs.150,000,000.00, in valued place of at the property under threat of sale. 2. The Plaintiffs contended that following the Ruling delivered on 24th February 2025 which vacated the injunction previously restraining the Bank's exercise of its statutory power of sale and the HCCOMM NOs. 420/2016 & E943/2021 RULING Page 2

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subsequent auction notice scheduled for 31st March 2025, a material change in circumstances had arisen warranting the Court's fresh intervention. They procured an alternative unencumbered property, L.R. No. 209/4151 [I.R. No. 9256] valued at Kshs.150,000,000.00 which they offered as substituted and/or additional security to safeguard the Bank's interests pending determination of the main suit. They urged the court to exercise its discretion in their favour to avert irreparable harm, prevent nugatory the main and suit from being rendered do substantive justice notwithstanding the earlier procedural bar. 3. The Defendants opposed the application through their Grounds of Opposition and Written Submissions both dated 25th March 2026. They contended that the application and the entire suit is res judicata due to the multiple prior determinations. They further contended that the Plaintiffs are guilty of impermissible approbation and reprobation in simultaneously relying on the Deed of Settlement's force majeure clause while assailing the Deed's validity. Further, they averred that the Plaintiffs had not established a prima facie case, given that the properties were offered as HCCOMM NOs. 420/2016 & E943/2021 RULING Page 3

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security in the ordinary course of a commercial transaction and any prejudice occasioned by sale is compensable in damages. Finally, they averred that the conduct of the Plaintiffs spanning nine years of litigation across multiple courts on the same subject matter amounted to an abuse of the process of the Court. Analysis and Determination 4. The plea of res judicata is anchored in Section 7 of the Civil Procedure Act which bars a court from trying any suit or issue in which the matter directly and substantially in issue between the same parties litigating under the same title, has been finally decided in a court of competent jurisdiction. 5. The Supreme Court considering the preservation of the integrity of concluded litigation addressed the sanctity of orders touching on the subject matter of a dispute in Bia Tosha Distributors Ltd V Kenya Breweries Ltd & 5 Others; Maxam Ltd & Another (Interested Parties), [2023] KESC. The unmistakable thread running through that decision is that HCCOMM NOs. 420/2016 & E943/2021 superior RULING courts will not Page 4

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countenance a party's resort to successive fora to relitigate what has already been determined, nor permit a live dispute to be rendered an academic exercise through piecemeal orders inconsistent with earlier findings. 6. Further, in Equip Agencies Limited V I & M Bank Limited, [2025] KECA, the Court of Appeal (Musinga, Ngugi & Odunga, JJA), on identical facts touching on the very property the subject of this application, stated as follows: “Having considered the numerous rulings and judgments that have been rendered by the High Court and this Court in respect of this same dispute, we do not entertain any doubt that the intended appeal is frivolous and not arguable. As rightly submitted by the respondent, the matter is res judicata.” 7. The Court proceeded further to hold that even were the intended appeal arguable, it would not be rendered nugatory by a sale for the value of the HCCOMM NOs. 420/2016 & E943/2021 RULING Page 5

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suit properties was known and the Bank was a reputable commercial institution capable of meeting any damages that might fall due, stating as follows: “But even if we were to assume that the intended appeal is arguable, it will not be rendered nugatory if we do not grant the orders sought. The value of the suit properties is known and the respondent is a reputable commercial bank that is able to pay any damages in the event that the applicant's intended appeal succeeds.” 8. The same conclusion has been reached in this court with unbroken consistency across the several suits touching on these properties. In Unicom Limited V I&M Bank Limited (HCC No. 327 of 2016), Nzioka J vide a Ruling delivered 7th May 2018 held in terms equally applicable to the present property, that: “In view of the fact that the debt has not been paid as aforesaid, I HCCOMM NOs. 420/2016 & E943/2021 RULING Page 6

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find that the Applicants have not established a prima facie case as defined in the case of Mrao. In that regard, I find that the Respondent cannot be stopped from exercising its power of sale as the continued arrears attract interest run which down may the eventually value of the securities.” 9. An identical finding was made in Equip Agencies Limited V I&M Bank Limited (HCC No. 420 of 2016) vide a Ruling delivered on 1st November 2017, where the validity of the very statutory notices now sought to be impugned was upheld. The parties before this Court, the subject matter of L.R. No. 214/172, Muthaiga and the grounds now urged, are in substance unchanged from those already adjudicated. Applying Section 7 of the Civil Procedure Act to these facts, I am satisfied that the application and the underlying suit, in so far as it touches on the validity of the notices and the propriety of the exercise of the statutory power of sale, are res judicata. HCCOMM NOs. 420/2016 & E943/2021 RULING Page 7

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10. This position is reinforced by the doctrine against abuse of the process of the Court, whose contours were helpfully catalogued by Mativo, J (as he then was) in Juja Coffee Exporters Limited & 3 Others V Bank of Africa Limited & Another; Adam & 2 Others [2022] KEHC where the court held that: “The abuse in this instance lies in the inconvenience and inequalities involved in the aims and purposes of the action. ... An abuse may also involve some bias, malice or desire to misuse or pervert the course of justice or judicial process to the irritation or annoyance of an opponent.” 11. The pattern disclosed by the record which is an unbroken sequence of applications filed since 2016 before this Court, the Court of Appeal and this very suit, each raising grounds already disposed of and each timed to coincide with an imminent auction, bears the hallmarks of the abuse described in Juja Coffee Exporters (supra). Indeed, the Court of HCCOMM NOs. 420/2016 & E943/2021 RULING Page 8

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Appeal observed in Equip Agencies Limited v I&M Bank Limited [2025] KECA (supra) that the 1st Plaintiff “has engaged both the High Court and this Court over the last nine (9) years in a multiplicity of suits and appeals, all in an effort to delay or frustrate the respondent's statutory power of sale.” I do associate myself fully with that finding which is binding upon me and which the present application does nothing to displace. 12. For the sake of completeness of the record, it bears noting that the Plaintiffs' indebtedness to the Bank is not in dispute, a fact the Court of Appeal itself recorded in Equip Agencies Limited v I&M Bank Limited (supra). Against this undisputed backdrop, the Plaintiffs' prayer for leave to deposit substituted security does nothing to unsettle the multiple findings this Court has already made affirming the Bank's statutory right to exercise its power of sale. 13. The Plaintiffs' supporting affidavit discloses that the alleged alternative security was merely identified after, and in direct response to this court’s ruling of 24th February 2025 and the Court HCCOMM NOs. 420/2016 & E943/2021 RULING Page 9

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of Appeal's ruling of 28th March 2025. I am unable to accept the proposition that this sudden emergence of alternative security, conveniently surfacing only after two adverse judicial pronouncements, is anything other than reactive and self-serving. I view this move as a unilateral attempt to stall and frustrate a sale process that has already been sanctioned by the Courts. 14. More fundamentally, even if such alternative security were genuinely available, it cannot be foisted upon the Bank so as to unilaterally vary the terms of the parties' contractual relationship or displace the Bank's statutory rights of enforcement as a chargee. A secured creditor's rights, whether arising from contract or from statute, are not susceptible to unilateral variation by the debtor. Any substitution of security, to be effective, requires the informed concurrence of the secured creditor. Absent that concurrence, the Bank remains entitled to proceed on the basis of the security originally agreed upon, and to enforce its remedies accordingly. Disposition HCCOMM NOs. 420/2016 & E943/2021 RULING Page 10

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15. For the reasons set out above, the Notice of Motion dated 2nd April is hereby dismissed with costs. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 31ST DAY OF JULY 2026. F. MUGAMBI JUDGE Delivered in presence of: Odegi for the plaintiff Nadio for Wawire for 1st & 2nd defendants Court Assistant: Lillian HCCOMM NOs. 420/2016 & E943/2021 RULING Page 11

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