Directline Assurance Company Ltd v Akm Investments Ltd & 6 others [2024] KEHC 12520 (KLR)

Directline Assurance Company Ltd v Akm Investments Ltd & 6 others (Commercial Case E256 of 2020) [2024] KEHC 12520 (KLR) (Commercial and Tax) (17 October 2024) (Ruling)

Neutral citation: [2024] KEHC 12520 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts)

Commercial and Tax

Commercial Case E256 of 2020

PM Mulwa, J

October 17, 2024

Between

Directline Assurance Company Ltd

Plaintiff

and

Akm Investments Ltd

1st Defendant

Dr SK Macharia And Mrs Serah Njeri Macharia (Legal representatives of the Late John Gichia Macharia)

2nd Defendant

Lisa Anyango Amenya

3rd Defendant

Janus Ltd

4th Defendant

Terry Wijenje

5th Defendant

James Gachoka T/A Amolo And Gachoka Advocates

6th Defendant

Harbour Capital Limited

7th Defendant

Ruling

1. The law firm Orenge J & Associates filed a Notice of Motion application dated 2nd November 2022 seeking the following orders:1. That this Honourable Court be pleased to order that the notice of appointment and notice of withdrawal of this suit herein dated 19th October 2020 filed by the firm of Gakoi Maina & Co Advocates purportedly on behalf of the Plaintiff, be struck out and expunged from the record.2. That this Honourable Court does hold and declare that the firm of Gakoi Maina & Co Advocates has not been appointed by the plaintiff to act for it in this suit.3. That this Honourable Court does hold and declare that the notice of appointment and notice of withdrawal of this suit herein dated 19th October 2020 filed by the firm Gakoi Maina & Co Advocates purportedly on behalf of Plaintiff, are in contravention of the law and therefore null and void.4. That costs of and occasioned by the said appearance, defence and notice of motion be provided for by Messrs Gakoi Maina personally.5. That this Honourable Court be pleased to order that the Applicant be awarded costs of this application.

2. The application is based on the grounds set out in its body and the supporting affidavit sworn by Evans Nyaga, the Principal Officer and the Chief Executive Officer of the Plaintiff company.

3. It was averred that the notices of appointment filed by the firm Gakoi Maina & Co. Advocates and the purported notice of withdrawal of this suit dated 19th October 2022 are invalid documents as the Plaintiff did not appoint the firm of advocates.

4. In opposition to the application, Ian Gakoi Maina of Gakoi Maina & Co. Advocates, filed a replying affidavit sworn on 17th November 2022.

5. He averred that the firm Gakoi Maina & Co. Advocates have the authority to act for the company from the majority shareholders and current directors of the company who are the 1st – 4th Defendants herein pursuant to the Plaintiff company resolutions dated 21st July 2022 and 10th November 2022.

6. Further that this suit was filed by minority shareholders in the name of the Plaintiff company which is illegal and ought to be struck out; that the firm of Orenge J & Associates also represent the 2nd Defendant and claim to be acting for the Plaintiff as well which presents a conflict of interest as the interests of the Plaintiff and the 2nd Defendant are antagonistic in this matter and will prejudice a fair trial.

7. Mr. Nyaga swore a further affidavit on 21st March 2023 in response to Mr. Maina’s replying affidavit. He averred that the replying affidavit is misleading in all respects and that the approved board of directors did not appoint Gakoi Maina & Co. Advocates to act for the Plaintiff.

8. Mr. Orenge also filed and swore a further affidavit on 20th October 2023. He averred that he is a director in the plaintiff’s board of directors as approved by the Insurance Regulatory Authority (IRA). He attached a resolution stating that it authorised him to file the suit and to represent the Plaintiff.

9. It was further asserted that the resolution relied upon by Gakoi Maina & Co. Advocates is void as the persons who have signed the said resolutions are not approved directors of the Plaintiff as is a requirement under Section 27A of the Insurance Act.

Analysis and determination 10. The crux of the matter is which firm, between Orenge J & Associates and Gakoi Maina & Co. Advocates, is properly on record for the Plaintiff company. Each of the two firms claim to be representing the Plaintiff company. They both canvassed their assertions through written submissions which I have considered.

11. The firm of Orenge J & Associates argued that the firm of Gakoi Maina & Co. Advocates has not been appointed by the Plaintiff to act on its behalf in this suit and therefore the notice of appointment and notice of withdrawal of suit are purportedly null and void. Orenge J & Associates are seeking an order to have Gakoi Maina & Co. Advocates condemned to personally pay for the costs occasioned by their appearance herein together with the costs of this application.

12. According to board resolutions dated 21st July 2022 and 10th November 2022, Gakoi Maina & Co. Advocates was appointed by the Plaintiff’s board of directors to act as its advocate in place of Kamau Kuria & Company Advocates, Ndegwa & Ndegwa Advocates and Orenge J & Associates. Resolutions are annexed as “IGM4” in the affidavit of Mr. Ian Gakoi.

13. The CR-12 produced as ‘IGM2’ as at 10th November 2022 indicated the directors of the Plaintiff company who appointed the firm of Gakoi Maina & Co. Advocates to represent the Plaintiff. The CR-12 being the only document that confirms the directors of the Plaintiff company, it follows that Gakoi Maina & Co. Advocates were properly appointed pursuant to directors’ board resolutions.

14. It is therefore my finding that find that the notice of appointment and notice of withdrawal of the suit herein filed by the firm of Gakoi Maina & Co. Advocates are properly on record and before the Court.

15. Consequently, based on the foregoing, I find no merit in the application dated 2nd November 2022 and the same is dismissed. I make no orders as to costs.

RULING DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBI THIS 17TH DAY OF OCTOBER 2024. …………………MULWAJUDGEIn the presence of:Ms. Mideva & Ms. Achieng for plaintiffMr. Chege for 6th defendantCourt Assistant: Carlos