Imperial Bank Limited (In Receivership) v W.E Tilley (Muthaiga) Limited, Primecatch (Exports) Limited, Mara Fish Packers Limited, J Fish Kenya Limited, Victorian Delight Limited, Ruby Red Limited, Value Pak Foods Limited, From Eden Limited, Aqualite Limited, Zulfikar Haiderali Jessa, Nasir Haiderali Jessa, Nargis Jessa, Nadir Azizali Jessa, Firoz Jessa, Salim Jessa, Irfan Shamshadin Jessa, Nashiv Haiderali Jessa, Marmo E Granito Mines (T) Limited, Marmo Marble (U) Limited & Fishways Uganda Limited [2017] KEHC 10059 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL AND TAX DIVISION

CIVIL SUIT NO. 522 OF 2015

IMPERIAL BANK LIMITED(IN RECEIVERSHIP).......PLAINTIFF

VERSUS

W.E TILLEY (MUTHAIGA) LIMITED.................1ST DEFENDANT

PRIMECATCH (EXPORTS) LIMITED..............2ND DEFENDANT

MARA FISH PACKERS LIMITED.....................3RD DEFENDANT

J FISH KENYA LIMITED....................................4TH DEFENDANT

VICTORIAN DELIGHT LIMITED.......................5TH DEFENDANT

RUBY RED LIMITED..........................................6TH DEFENDANT

VALUE PAK FOODS LIMITED.........................7TH DEFENDANT

FROM EDEN LIMITED......................................8TH DEFENDANT

AQUALITE LIMITED.........................................9TH DEFENDANT

ZULFIKAR HAIDERALI JESSA.....................10TH DEFENDANT

NASIR HAIDERALI JESSA............................11TH DEFENDANT

NARGIS JESSA..............................................12TH DEFENDANT

NADIR AZIZALI JESSA.................................13TH DEFENDANT

FIROZ JESSA..................................................14TH DEFENDANT

SALIM JESSA................................................15TH DEFENDANT

IRFAN SHAMSHADIN JESSA.......................16TH DEFENDANT

NASHIV HAIDERALI JESSA.........................17TH DEFENDANT

MARMO E GRANITO MINES (T) LIMITED...18TH DEFENDANT

MARMO MARBLE (U) LIMITED....................19TH DEFENDANT

FISHWAYS UGANDA LIMITED......................20TH DEFENDANT

RULING NO.3

1. The application dated 15th March 2017 was brought by FIDELITY COMMERCIAL BANK LIMITED.

2. In the first instance, the applicant sought to be enjoined to the suit as an Interested Party.

3. If the court were to grant them leave to be enjoined, the applicant would only wish to remain as an Interested Party for as long as it takes to determine this application.

4. The reason why the applicant wishes to be a party for such a limited period of time is that it was only requesting the court to vary the interlocutory injunctions which were issued in this case, so as enable S B M AFRICA HOLDINGS LIMITED to complete the purchase of the entire issued share capital of the applicant.

5. The transaction through which the share capital was to be sold was that of a squeeze-out.

6. And the reason why the applicant believes that the court injunction needs to be varied is that the 14th Defendant, FIROZ JESSA, is a minority share-holder in the applicant.

7. Currently, the defendants have been restrained by an injunction issued in this case, so that they cannot remove from the court’s jurisdiction; dispose of; mortgage (and or further mortgage); charge (and/or further charge); assign; diminish; transfer; alienate; operate; or otherwise interfereand/or deal with any of their assets which are within the jurisdiction of the High Court of Kenya.

8. In the circumstances, the applicant expressed the view that if the shares of the 14th defendant were acquired by S B M Africa Holdings Limited, that might possibly constitute a violation of the court order.

9. It is therefore my understanding that the applicant was taking the precaution of coming to court, so as to avoid a situation in which there might later arise allegations that there had been a breach of the court orders.

10. My said understanding is based on the fact that the application seeks a variation of the court order, or in the alternative an express pronouncement that if the purchase of the shares of the 14th defendant went ahead, the same would not amount to an act of contempt of court.

11. The applicant explained that those who hold 95. 09% of its shares had already approved the sale of their shares.

12. Meanwhile, the 14th defendant has opposed the attempt to have his shares purchased by S B M Africa Holdings Limited.

13. In the face of the very spirited opposition put forward by the 14th Defendant, it cannot be said that if the sale transaction proceeded, he was acting in breach of the injunction.

14. However, I am alive to the possibility that a party who was restrained by an injunction could conspire to defeat an injunction by asking a person who was not a party to a suit, to circumvent the order.

15. In the case before me, I am persuaded that there is no collusion between the 14th defendant and the applicant.

16. The applicant has been candid upfront, that its intention in seeking to be enjoined to the suit was only for the limited purposes which have been spelt out.

17. Therefore, it follows that the reason for seeking joinder in this case was not proximate to the matters in issue between those who are already parties to the case.

18. What the applicant has raised is a fresh issue.  Therefore, if the applicant had asked that it be enjoined to the suit, and that it remains a party until the case was determined, I would not have hesitated to tell the applicant that it did not have any stake in the dispute which was already before the court.

19. But I find myself unable to ignore the focused attention which the applicant has demonstrated towards the possible impact of the prevailing orders on the proposed sale of the 14th defendant’s shares.

20. I commend the applicant for not simply making an assumption, that because the order was not directed at it, the proposed sale of shares could just proceed.  The applicant has chosen to ask the court to confirm that the interlocutory injunction does not bar the sale of shares owned by the 14th defendant.  In the alternative, if the injunction constituted a bar to the said sale, the applicant asked the court to vary the order, so that the process of sale could proceed.

21. I welcome a person who approaches the court for such clarification, and for that reason I do grant an order that Fidelity Commercial Bank Limited be enjoined to the suit.  However, the said joinder shall only be for the limited purposes which have been expressly articulated by the applicant.

22. In other words, the court has allowed the applicant an opportunity to canvass the application, because if the applicant remained an outsider it could not have that opportunity.

23. To the extent that the injunction order, in place in this case, could be a bar to the acquisition of the shares owned by the 14th Defendant, I order that the injunction be varied, so that the said process is given a chance.

24. I wish to emphasize that by varying the injunction, this court is not in any way giving a green-light to the process.  I am only removing the hurdle which now makes it possible for the Offeror to take such steps as are required by the law.

25. In effect, the 14th defendant will not be prejudiced at all by this order, as he will have to be accorded an opportunity, in different proceedings, to challenge the process.

26. The court notes that there is a possibility that the time within which various steps should have been taken, had already lapsed.  Therefore, I wish to make it clear that the orders granted herein do not purport and cannot purport to clothe the process with legitimacy, if the process is shown to otherwise be unfair or arbitrary or unlawful.

27. Each party will bear his or her own costs of the application dated 15th March 2017.

DATED, SIGNED and DELIVERED at NAIROBI this30th day of November2017.

FRED A. OCHIENG

JUDGE

Ruling read in open court in the presence of

Muchiri for the Plaintiff

A. Ayisi for Issa for the 2nd to 9th Defendants

A. Ayisi for Singh Gitau for the 14th Defendant

Koskey for Oyuke for Fidelity Commercial Bank

Collins Odhiambo – Court clerk.