Case ID:160589

Moses Ngacha Githinji & another v Arthur Kimani Mwangi & 2 others [2020] eKLR

Case Metadata

Case Number:

Civil Case 184 of 2019

Parties:

Moses Ngacha Githinji & Grey Holdings Limited v Arthur Kimani Mwangi, Richard Kamotho & Gameco LLP

Date Delivered:

29 Apr 2020

Case Class:

Civil

Court:

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

Case Action:

Ruling

Judge(s):

Francis Tuiyott

Citation:

Moses Ngacha Githinji & another v Arthur Kimani Mwangi & 2 others [2020] eKLR

Court Division:

Civil

County:

Nairobi

Case Outcome:

Notice of Motion allowed

Disclaimer:

The information contained in the above segment is not part of the judicial opinion delivered by the Court. The metadata has been prepared by Kenya Law as a guide in understanding the subject of the judicial opinion. Kenya Law makes no warranties as to the comprehensiveness or accuracy of the information

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL AND TAX DIVISION

MILIMANI LAW COURTS

HCCC NO. 184 OF 2019

MOSES NGACHA GITHINJI................................1

ST

PLAINTIFF

GREY HOLDINGS LIMITED...............................2

ND

PLAINTIFF

VS.

ARTHUR KIMANI MWANGI.............................1

ST

DEFENDANT

RICHARD KAMOTHO......................................2

ND

DEFENDANT

GAMECO LLP....................................................3

RD

DEFENDANT

RULING

1. Stripped to its core, the dispute set out in the Plaint dated 29

th

July 2019 and filed on 31

st

July 2019 is the ownership, control and management of the affairs of Grey Holdings Limited (the 2

nd

Plaintiff or Company).

2. It is the case of Moses Ngacha Githinji (the 1

st

Plaintiff) that his shares in the Company were illegally and fraudulently transferred by Arthur Kimani Mwangi (the 1

st

Defendant) to Richard Kamotho (the 2

nd

Defendant). Further that he has been wrongfully removed as a Director of the Company. The 1

st

Plaintiff complains that he has been excluded from the management of the Company and its affairs.

3. The Plaintiff seeks the following prayers:-

I. A mandatory injunction compelling the 1

st

Defendant to produce and deliver to the Plaintiff a true and accurate record of all the financial records of the Company from the year 2016 to the date of judgement.

II. A Declaration that the 1

st

Defendant has acted in breach of his statutory duty to promote the success of the Company and avoid conflict of interest to the detriment of the Company.

III. A Declaration that the removal of the Plaintiff as a Director is in conflict with the 1

st

Defendant’s duty to promote the success of the Company and the Articles of Association of the Company.

IV. A mandatory injunction compelling the Registrar of Companies ,the interested Party herein, to reinstate the 1

st

Plaintiff as a Director shareholder and remove the 2

nd

Defendant as a Director shareholder of the Company.

V. Costs of the suit.

VI. Interest on costs at court rate from the date of judgment until payment in full.

Any further relief that the Court deems fit to grant

4. Gameco LLP is also sued in these proceedings as a 3

rd

Defendant. One notices, however, that no prayers are sought against it and Gameco has filed a Notice of Motion dated 22

nd

October 2019 seeking that the Plaintiffs’ suit as against it be struck out with costs. Gameco contends that no reasonable cause of action is disclosed against it.

5. Arguing the Application, Counsel S. Amin for Gameco reiterates that no allegation is made against the 3

rd

Defendant nor is any prayer sought against it.

6. In response Counsel Nyanchoka for the Plaintiffs argues that there is a commercial agreement between the 2

nd

Defendant and the Gameco and the joinder of the Gameco is necessary for purposes of gaining access to its accounts for purposes of effectively rendering of accounts by the 2

nd

Defendant.

7. Whilst the Plaintiff does not impute any wrongdoing on the part of Gameco he avers:-

“Specifically, there was hesitancy in accurately reporting the financial gains obtained from the 3

rd

Defendant arising out of the income from the 2

nd

Plaintiff’s Betting Control and Licensing Board (BCLB) license.”

8. If those allegations are accepted to be true, then the obligation of Gameco to the Company was payment of fees for use of its license. If the Plaintiffs’ case in this respect is, as it seems to be, that the 1

st

and 2

nd

Defendants have failed to accurately account for the assets and income of the Company then it has sought a prayer compelling the 1

st

Defendant to produce and deliver to the Plaintiff a true and accurate record of all financial records of the Company from the year 2016 to the date of judgment (prayer (i)).

9. There is no allegation that Gameco has colluded or otherwise participated in the alleged misrepresentation or meandering of accurate accounts. This Court agrees with Gameco that no wrongdoing is alleged against it and it is little wonder that no orders have been sought against it.

10. It seems patently unfair to burden a party with the responsibility of defending a suit merely because it has a commercial contract with one of the Defendants whose validity or propriety is not questioned. The party asked to render accounts is the 1

st

Defendant and not Gameco. Any doubt as to the veracity of the accounts, if eventually rendered, can be checked and verified without involving Gameco as a substantive party to the suit.

11. Gameco should be relieved of the burden, expense and possible reputational risk associated with being joined as a Defendant. The Notice of Motion dated 22

nd

October 2019 is hereby allowed with costs .Gameco will also have costs of the struck out suit.

Dated, Signed and Delivered in Court at Eldoret this 29

th

Day of April 2020

F. TUIYOTT

JUDGE

ORDER

In view of the declaration of measures restricting Court operations due to the COVID-19 pandemic and in light of the directions issued by his Lordship, the Chief Justice on 17

th

April 2020, this Ruling has been delivered to the parties through virtual platform.

F. TUIYOTT

JUDGE

PRESENT

: