Elsek & Elsek (k) Limited v Kcb Bank Kenya Limited

2.The Plaintiff(“Elsek”) opposes the application through the replying affidavit of its director, Osman Erdinc Elsek sworn on 17th November 2025 and Defendant (“the Bank”) also opposes the application through the replying affidavit of its Group General Counsel, Bonnie Okumu, sworn on 23rd October 2025. The application was canvassed by way of written submissions which are on record and I have considered the same together with the pleadings and I will be making relevant references to them in my analysis and determination below. Analysis and Determination 3.The primary issue for the court’s determination is whether the court ought to set aside the Consent and the orders adopting the same. As submitted by the Bank, the principles of setting aside a consent order are now settled. In Brooke Bond Liebig v Mallya [1975] EA 266 [1975] EA 266 Mustafa Ag. VP expressed the following principle as follows; The compromise agreement was made an order of the court and was thus a consent judgment. It is well settled that a consent judgment can be set aside only in certain circumstances, e.g on grounds of fraud or collusion, that there was no consensus between the parties, public policy or for such reasons as would enable a court to set aside or rescind a 2|Page

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contract. In this case the parties and their advocates consented to the compromise in very clear terms; they were certainly aware of all the material facts and there could not have been any mistake or misunderstanding. None of the factors which could give rise to the setting aside of a consent agreement existed. 4.In Wasike v Wamboko [1985] KECA 149 (KLR) Hancox JA cited Setton on Judgments and orders (7th edition) vol 1 page 124, and reiterated that; “Any order made in the presence and with the consent of counsel is binding on all parties to the proceedings or action, and those claiming under them… and cannot be varied or discharged unless obtained by fraud or collusion or by an agreement contrary to the policy of the court…; or if the consent was given without sufficient material facts, or in general for a reason which would enable a court set aside an agreement.” 5.And in Kenya Commercial Bank Ltd v Specialized Engineering Company Ltd [1980] KEHC 11 (KLR) Harris J correctly held inter alia, that – A consent order entered into by counsel is binding on all parties to the proceedings and cannot be set aside or varied 3|Page

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unless it is proved that it was obtained by fraud or collusion or by an agreement contrary to the policy of the court or where the consent was given without sufficient material facts or in misapprehension or ignorance of such facts in general for a reason which would enable the court to set aside an agreement. A duly instructed advocate has an implied general authority to compromise and settle the action and the client cannot avail himself of any limitation by him of the implied authority to his advocate unless such limitation was brought to the notice of the other side. 6.Dr Otim avers that he was never involved in the creation of the Consent, nor was he notified when it was recorded in court. He states he was condemned unheard, which is a violation of his constitutional right to a fair hearing under Article 50 of the Constitution and he further claims a direct and definable interest in the property L.R. NO. KAJIADO/KISAJU/7947. He asserts he is the legitimate and beneficial owner of the property and stands to lose it entirely and that it is currently valued at Kshs. 150,000,000.00 which loss he argues, would be irreparable, as the property is his primary asset. 4|Page

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7.Dr. Otim claims the Consent was fraudulently obtained by secretly being executed without notifying parties who have stake or claim in the suit property and that the underlying transaction was illegal, as Elsek charged the property to the Bank in contravention of their agreement and without paying him any consideration for the property. That the Consent was not brought to the attention of the court or the parties on various dates when the matter was being mentioned. 8.In response, Elsek depones that Dr. Otim was only admitted to the proceedings as an Interested Party on 4th February 2016, with specific and limited participatory rights and that as an Interested Party, he had no right to veto or obstruct the principal parties that is, Elsek and the Bank from settling their dispute. That the issue of ownership has already been settled and Elsek points to a separate suit filed by Dr. Otim in the Environment and Land Court (ELC), KJD ELCC 833 of 2017 where he challenged Elsek’s ownership of the property and on 16th May 2023, the court in that matter delivered a judgment dismissing the suit and affirming that he was not the owner of the property and had no registrable interest. That the court also confirmed Elsek’s legal right to charge the suit property. Elsek contends that the judgment in that case is final and binding, as Dr. Otim did not obtain a stay of execution and therefore, the present 5|Page

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application is an attempt to reopen issues that have already been settled, making it res judicata. 9.Elsek states that after the ownership dispute was resolved in its favor, it lawfully engaged with the Bank to settle the commercial debt, the Consent was voluntarily and lawfully executed by both principal parties to settle the matter and the court adopted the same as an order, a process Elsek contends was regular, procedural and valid. Elsek dismisses Dr. Otim's claims that the Consent was backdated or fraudulent as false, reckless and completely unsupported by any evidence. It emphasizes that fraud must be strictly proved, which Dr. Otim has failed to do and that Dr. Otim is using this application to circumvent the unfavorable judgment from the ELC and to frustrate the lawful commercial settlement between Elsek and the Bank. Elsek also notes that Dr. Otim waited many months after the Consent was adopted before filing his challenge, without providing a valid explanation for the delay. For these reasons, Elsek urges the court to dismiss the application. 10. In its response, the Bank also depones that the issue of the property ownership has already been settled by the ELC and that this application is an attempt to reopen the ownership issue which is an abuse of the court process and a direct attack on a final judgment, making it res judicata. The Bank notes that on 4th 6|Page

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February 2016, the court ordered a stay of these proceedings to allow the ELC ownership dispute to be heard and finalized and since that ELC matter has been concluded and judgment delivered, the very purpose of the stay has been fulfilled. 11. The Bank states that the Consent was voluntarily and lawfully executed by the two principal parties to settle their long-standing commercial dispute and that the Court legally adopted the Consent as an order on 10th April 2025 and Dr. Otim has not provided any evidence of fraud, error, or non-disclosure to justify setting it aside. The Bank reiterates that Dr. Otim was admitted to the proceedings strictly as an Interested Party on 4th February 2016 and his participation was limited and did not grant him the right to obstruct or veto a settlement between the principal parties. 12. The Bank contends that this application is an attempt to circumvent the unfavorable judgment from the ELC and to frustrate the lawful commercial settlement between Elsek and the Bank. The Bank also notes that Dr. Otim provides no explanation for the significant delay in filing his challenge after the consent was adopted. For these reasons, the Bank also prays that the court dismisses Dr. Otim's application. 7|Page

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13. Going through the pleadings and submissions, I am inclined to agree with the positions of Elsek and the Bank. Dr. Otim claims the Consent was fraudulent, backdated, and obtained secretly, however, he has provided no tangible evidence to support these serious allegations. The standard of proof for fraud is high and mere assertions are insufficient (see R.G Patel v Lalji Makanji (1957) 314 E.A). Both Elsek and the Bank asserted that the Consent was voluntarily executed by them to settle a commercial debt and Dr. Otim has failed to prove any of the required grounds for setting aside the consent, such as fraud, collusion, or a misapprehension of material facts. The fact that Dr. Otim, as an Interested Party, was not involved in the Consent does not automatically invalidate it. Indeed, the principal parties to a suit have the right to settle their dispute and his claim of being condemned unheard is also weakened by the fact that he was fully aware of the proceedings and had been an active litigant for years. 14. I also agree that Dr. Otim is trying to reopen his claim of ownership over the suit property when this very issue was the subject of the ELC suit that affirmed that he was not the owner of the property and that Elsek had the legal right to charge it. No appeal has been filed against this decision meaning the judgment remains valid and binding. The parties in the ELC suit and this suit are 8|Page

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substantially the same and the subject matter is the same property. Dr Otim was admitted to these proceedings as an Interested Party on 4th February 2016, with the specific purpose of protecting his interests while the ownership dispute was litigated in the ELC. His role was not to obstruct a commercial settlement between the principal parties and since the ELC has conclusively ruled against him on the ownership question, he no longer has a legally recognizable interest to protect in this suit. 15. In the end, I find that this application by Dr. Otim is a clear attempt to bypass an unfavorable final judgment from the ELC by dressing up his ownership claim as a challenge to a procedural consent order. Conclusion and Disposition 16. The upshot is that the application by the Interested Party dated 21st August 2025 is dismissed with costs to the Elsek and the Bank to be borne by the interested party. DATED SIGNED and DELIVERED virtually this 7th DAY OF AUGUST 2026 ............................................................................ J.W.W. MONGARE JUDGE 9|Page

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IN THE PRESENCE OF 1. Ms. Salim for the Plaintiff. 2. Ms. Kimona holding brief for Mr. Bundotich for the Defendant 3. N/A for the Interested Party. 4. Amos- Court Assistant 10 | P a g e

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