David Nyakengo Nyakwama & another v Kenya Tea Development Agency Ltd & 2 others [2020] eKLR Case Summary

Court
High Court of Kenya at Kisii
Category
Civil
Judge(s)
A. K. Ndung’u J
Judgment Date
October 14, 2020
Country
Kenya
Document Type
PDF
Number of Pages
3
Explore the case summary of David Nyakengo Nyakwama & another v Kenya Tea Development Agency Ltd & 2 others [2020] eKLR. Understand the legal implications and outcomes of this significant judgment.

Case Brief: David Nyakengo Nyakwama & another v Kenya Tea Development Agency Ltd & 2 others [2020] eKLR

1. Case Information:
- Name of the Case: David Nyakengo Nyakwama & Samwel Ogata Atwori v. Kenya Tea Development Agency Ltd, Nyamache Tea Factory Company Ltd, Robert Araka Aror
- Case Number: Civil Case No 12 of 2019
- Court: High Court of Kenya at Kisii
- Date Delivered: 14th October 2020
- Category of Law: Civil
- Judge(s): A. K. Ndung’u J
- Country: Kenya

2. Questions Presented:
The court must resolve two primary legal issues:
1. Whether it has the requisite jurisdiction to entertain the application.
2. If jurisdiction is established, whether the applicants have met the legal threshold for granting the injunction sought against the 3rd respondent.

3. Facts of the Case:
The applicants, David Nyakengo Nyakwama and Samwel Ogata Atwori, are founder shareholders of Nyamache Tea Factory Company Ltd (the 2nd respondent) within the Masige Electoral Area. They sought a temporary injunction to prevent Robert Araka Aror (the 3rd respondent) from being admitted to the board of directors of the 2nd respondent after he was disqualified by a verification committee for failing to deliver the required amount of tea leaves. However, the 3rd respondent appealed this disqualification to the Dispute Resolution Committee of the Kenya Tea Development Agency Ltd (the 1st respondent), which subsequently cleared him to contest the elections, leading to his victory. The applicants alleged that the decision was biased and driven by personal interests, as the 3rd respondent had a history with the 1st respondent and supplied tea to a rival company.

4. Procedural History:
The applicants filed a Notice of Motion on 18th November 2019, seeking a temporary injunction against the election of the 3rd respondent. The 1st and 2nd respondents did not respond to the application. The case was canvassed through written submissions. The 3rd respondent contested the court's jurisdiction, arguing that the applicants had not exhausted the internal dispute resolution mechanisms outlined in the election manual.

5. Analysis:
- Rules: The court considered Order 40 Rules 1 & 2 of the Civil Procedure Rules and Sections 1, 1A, 3, 3A, and 63(e) of the Civil Procedure Act, which govern injunctions and the requirements for their issuance.
- Case Law: The court referenced several cases to support the principle that courts typically refrain from interfering in internal company management unless actions are ultra vires or fraudulent. Notable cases included *Paolo Murii v. Gian Battisha Murii & Another* and *Job Felis Ndarera & Another v. Nyamache Tea Factory Company Limited & 2 Others*, which emphasized the importance of exhausting internal dispute mechanisms before seeking judicial intervention.
- Application: The court found that the applicants had not exhausted the internal mechanisms for resolving disputes as required by the election manual. The Dispute Resolution Committee had already adjudicated on the matter, and the applicants failed to challenge that decision within the prescribed time frame. Consequently, the court determined it lacked jurisdiction to entertain the application.

6. Conclusion:
The court ruled that it had no jurisdiction to consider the application due to the applicants' failure to exhaust available internal dispute resolution mechanisms. As a result, the application for a temporary injunction was dismissed, with costs awarded to the 3rd respondent.

7. Dissent:
There were no dissenting opinions noted in the ruling, as the decision was unanimous in its findings regarding jurisdiction and the application of the law.

8. Summary:
The High Court of Kenya dismissed the application for a temporary injunction against the election of the 3rd respondent as a director of Nyamache Tea Factory Company Ltd. The ruling underscored the necessity of exhausting internal company dispute resolution mechanisms before seeking judicial intervention, which is significant for maintaining the integrity of corporate governance processes. The decision reinforces the principle that courts should not intervene in internal company matters unless there are clear grounds for doing so.

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