M’Barine & 2 others v Marine Power Generation Limited.........Nominal Respondent Anthony M’Barine/Director & 4 others [2023] KEHC 25540 (KLR)

M’Barine & 2 others v Marine Power Generation Limited.........Nominal Respondent Anthony M’Barine/Director & 4 others (Winding Up Petition 32 of 2014) [2023] KEHC 25540 (KLR) (Commercial and Tax) (20 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25540 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Winding Up Petition 32 of 2014

JWW Mong'are, J

November 20, 2023

IN THE MATTER OF: MARINE POWER GENERATION COMPANY LTD IN THE MATTER OF THE COMPANIES ACT NO. 17 OF 2015 IN THE MATTER OF AN APPLICATION FOR PROTECTION OF MEMBERS AGAINST OPPRESSIVE CONDUCT UNDER SECTIONS 22, 70, 780 AND 782 OF THE COMPANIES ACT NO. 17 OF 2015

Between

Eric Mugendi M’Barine/Director

1st Petitioner

Michael T Maina/Director

2nd Petitioner

Wallace Mugendi Murungi/Director

3rd Petitioner

and

Marine Power Generation Limited

1st Respondent

Anthony M’Barine/Director

2nd Respondent

Mark Thiong’O/Director

3rd Respondent

David Simbiri/Director

4th Respondent

Robert Ndung’U/Company Secretary

5th Respondent

Ruling

1. Before the court is the Petitioner’s Notice of Motion application dated 13th July 2023. It was brought under Article 27, 50, 48 and 159 of the Constitution of Kenya, Sections 780 and 782 of the Companies Act, No. 17 of 2015, Order 40 Rule 2 and 4 and Order 51 Rule 1 Civil Procedure Rules 2010.

2. The Petitioner prayed for the following orders:“1. 1.Spent2. Spent3. Spent4. Spent5. Spent6. That an Order be and is hereby issued declaring the board meeting of the Nominal Respondent Company hastily convened and held on 15th June 2023, illegal, unlawful, null and void.7. That an Order be and is hereby issued declaring the Notice dated 16th June, 2023 and served upon the Applicants on the same day, purportedly calling for an extraordinary general meeting of the Nominal Respondent Company on 7th July, 2023 illegal, unlawful, null and void.8. That an Order be and is hereby issued quashing the purported extraordinary general meeting and resolutions of the Nominal Respondent Company passed on the 7th July, 2023. 9.That these Orders be served upon the Registrar of Companies for purposes of compliance with the orders herein sought.10. That costs of the application be paid for by the 1st, 2nd, 3rd, 4th and 5th Respondents.”

3. The application is supported by the affidavit sworn by the Petitioner on even date and is founded on the grounds that despite the 1st, 2nd, 3rd, 4th and 5th Respondents knowledge that the Petitioners’ Application dated 3rd October 2021 was slated for hearing on 10th July 2023 they took further steps, decisions and actions intended to prejudice the Petitioners and pre-empt the outcome of the suit and the Notice of Motion by calling for and holding an Extraordinary General Meeting of the Nominal Respondent and taking decisions and actions to the detriment of the Petitioners.

4. That the Petitioners, who are all based in the USA, were unable to attend the hastily convened board meeting due to the impractically short notice; that the Petitioners’ attempts to request for the minutes of the purported meeting held on 15th June 2023 fell on deaf ears for the reason that there was no such meeting in the absence of the minutes and participation of the Petitioners.

5. The Petitioners averred that the Respondents sent a notice to convene an extraordinary general meeting on 16th June 2023 without due authorization from the board which was contrary to Article 16 of the Articles of Association of the Nominal Respondent Company; that the 1st and 2nd Petitioners attempted to join the Microsoft Teams session hosting the hybrid Extraordinary General Meeting to personally exercise their rights as bonafide shareholders of the Nominal Respondent Company but despite waiting for more than 30 minutes, they were not admitted to the meeting and could not participate. That their requests for minutes and materials of the Extraordinary General Meeting were ignored by the Respondents.

6. The Petitioners pleaded that there is need to grant the Orders sought herein, to prevent any attempts by the 1st, 2nd, 3rd, 4th and 5th Respondents from interfering with the shareholding of the Nominal Respondent, through their manipulation of the conversion of the company from a Private Company to a Public Company and claim a majority shareholding in the Nominal Respondent, with a view of ratifying the illegal actions of the Respondents and defeat the Petition herein.

7. The Nominal Respondent (hereinafter ‘the Company’) adamantly opposed the application vide grounds of opposition dated 18th July 2023 and a replying affidavit sworn on 18th July 2023 by David Simibiri.

8. In its grounds of opposition, the Company contended that the court lacks jurisdiction to grant the orders sought as the matter stands dismissed by Kasango J’s ruling delivered on 27th April 2020 which held in part:-“If this petition is not heard and concluded by 31st July 2020, this petition will stand as dismissed for want of prosecution. In the event it is so dismissed the costs of the Petition shall be awarded to the Respondents.”

9. The Company argued that the said Orders were self-executing as there is no order reviewing and/or setting aside the said orders thus the matter stands dismissed and the court is functus officio. That the Petitioners filed an application dated 3rd October 2021 wherein they prayed to have the ruling of 27th April 2020 reviewed and/or set aside which application has not been determined on its merits and the courts lacks jurisdiction to grant any of the orders sought unless the orders of the court of 27th April 2020 are reviewed and/or set aside.

10. Further the Company asserted that the Petitioner did not seek leave of the court before enjoining the 2nd to 5th Respondents herein which renders the application void.

11. As the grounds of opposition raise an objection on the jurisdiction of this court to determine the instant application, it is vital for the court to determine whether that averment holds water in limine.

12. On 27th April 2020, the court delivered a ruling which held that the petition would be dismissed for want of prosecution in the event the same was not heard and concluded by 31st July 2020. The petition was not determined before the aforementioned deadline and the petition stood dismissed pursuant to the court’s self-executing orders.

13. Therefore, the subject application seeking interalia to have the Extraordinary Meeting and Resolutions passed thereto declared null cannot be determined by this court. The court already pronounced itself and is thus functus officio. Black’s Law Dictionary defines the term Functus Officio as follows:-“Functus officio means having discharged his duty. The judge or magistrate, (or tribunal member) who passed his order become functus officio, meaning, once the order is passed, it cannot be retired or reheard by the same Judge or the same Magistrate on the same matter. Once a court has passed a valid sentence after a lawful hearing, it is functus officio and cannot reopen the case.”

14. Only an application to review and/or to set aside the ruling of 27th April 2020 may be entertained by this court. If the ruling is set aside then the petition would be reinstated and the court would have the jurisdiction to determine matters pertaining the affairs and winding up of the Company. Accordingly, there is no need to consider the other pleadings filed against the subject application.

15. Having found that the court is functus officio as it relates to the matter before it, the application before is unsustainable and is dismissed with costs awarded to the Respondents.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 20TH DAY OF NOVEMBER 2023. J. W. W. MONG’AREJUDGEIn the Presence of:-Mr. Eric M’ Barine 1st Petitioner for the Petitioners.Mr. Kigata for the Nominal Respondent.No appearance for the 2nd - 5th Respondent.