Kyaka Hotel v Marsha Afrika Expeditions Ltd [2026] KEHC 16815 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT MACHAKOS

MISC. APPLICATION NO. E004 OF 2026

BETWEEN

THE KYAKA HOTEL……..……………………………………………..APPLICANT

AND

MARSHA AFRIKA EXPEDITIONS LIMITED........………….……….RESPONDENT

RULING

Introduction and Background

1. The Applicant, through its application dated 20th January 2026 seeks that the veil of incorporation of the Respondent be lifted and its director, Benson Karibe Rwingo, be made personally liable to pay the decretal sum of Kshs.128,686.00. The application is supported by grounds on its face and the affidavit of the Applicant’s manager, Elizabeth Chao Mwadime sworn on 20th January 2026. Despite service, there was no response by the Respondent to the application. The Applicant has supplemented its arguments by filing written submissions that I have considered and I will make relevant references to them in my analysis and determination below.

Analysis and Determination

2. The issue for the court’s determination is whether the veil of incorporation of the Respondent should be lifted and whether its director should be made personally liable and be ordered to pay the decretal sum owed to the Applicant. As submitted by the Respondent, such prayers are provided for under Order 22 Rule 35 of the Civil Procedure Rules which provides as follows:

“Where a decree is for the payment of money, the decree- holder may apply to the court for an order that-

(a) the judgment-debtor;

(b) in the case of a corporation, any officer thereof; or

(c) any other person,

be orally examined as to whether any or what debts are owing to the judgment-debtor, and whether the judgment-debtor has any and what property or means of satisfying the decree, and the court may make an order for the attendance and examination of such judgment-debtor or officer, or other person, and for the production of any books or documents.

3. Whereas a company is a separate legal entity from its members and shareholders as espoused by the Court in the English case of Salmon vs Salmon [1987] AC 78, this position is not cast in stone as there are instances where the corporate veil of a company may be pierced and/or lifted. The Court of Appeal, in Riccatti Business College of East Africa Limited v Kyanzavi Farmers Company Limited [2016] KECA 763 (KLR) held that “The Court may lift the corporate veil in exercising its inherent jurisdiction to do justice and fairness for the ends of justice. This jurisdiction may be exercised only in special circumstances where the Court finds improper conduct, fraud or when a company is a sham, acting as an agent of the shareholders or evading tax revenues.”

4. I am in further agreement with the Applicant’s submission that this court (Nyakundi J.,) in Ukwala Supermarket v Jaideep Shah & another [2022] KEHC 2207 (KLR) held that the corporation veil will also be lifted if the company is a mere instrumentality or alter ego of the shareholder/director such that there is a unity of interest and ownership and the facts must be such that adherence to the fiction of a separate entity would sanction a fraud or promote injustice.

5. Whereas the Applicant submits that the Respondent is being used as a mask to fraudulently shield its director from execution, I find that it has not provided concrete evidence of fraud and there is no evidence of the director transferring assets, commingling funds, or treating the company's assets as his own. The mere inability to trace assets or the company's whereabouts does not, by itself, constitute fraud. The official CR12 annexed confirms the company is active, with the said Benson Karibe Rwingo as the sole director and shareholder. There is no evidence that the Respondent company is a sham or has ceased to exist.

6. In Ukwala Supermarket(supra), the court dismissed an application to lift the corporate veil because the applicant failed to provide concrete evidence of fraudulent intent or that the directors were disposing of assets to defraud creditors. The court held that "a party who intends to benefit from the extraordinary relief of piercing the corporate veil must tender more concrete evidence…." Further, the Applicant has not demonstrated any special circumstances to lift the corporate veil the fact that the company cannot be found or has no assets is a common execution problem, but it does not automatically justify piercing the veil.

7. Therefore, based on the present evidence, I find and hold that the Applicant has not made out a case for lifting the corporate veil and I find that the application is premature regarding the final order of personal liability. However, I find that the Applicant has made out a case for summoning the director for oral examination under Order 22 Rule 35. The director, Benson Karibe Rwingo, is the sole director and shareholder and I believe that examining him is the appropriate first step to discover the Respondent’s assets or determine if he has been improperly dealing with them.

Conclusion and Disposition

8. In the foregoing, I allow the Applicant’s application dated 20th January 2026 as follows:

1) The Court hereby issues Summons to BENSON KARIBE RWINGO, the Director and Shareholder of the Respondent/Judgment Debtor herein, to appear before the Court in person on a date to be fixed, to be orally examined as to:

a) Whether the Respondent/Judgment Debtor has any property or means of satisfying the decree issued in Machakos SCCC No. E623 of 2023 in the sum of Kshs. 128,686.00

b) The whereabouts of the Respondent/Judgment Debtor's assets and its current operational status.

2) The said BENSON KARIBE RWINGO is hereby ordered to produce before this Court all books, documents and records relating to the financial affairs, assets and liabilities of the Respondent/Judgment Debtor, including but not limited to:

(a) Bank statements for all accounts held by the Respondent/Judgment Debtor for the period from 7th February 2024 to date;

(b) Financial statements, ledgers, and cash books;

(c) Any documents evidencing the transfer, sale, or disposal of any assets of the Respondent/Judgment Debtor.

3) The issue of whether the corporate veil of the Respondent/Judgment Debtor should be lifted and the said BENSON KARIBE RWINGO held personally liable for the decretal sum is hereby reserved and shall be determined by this Court after the conclusion of the oral examination ordered herein

4) Costs of the application shall be borne by the Respondent and are assessed at Kshs. 20,000.00.

DATED SIGNED AND DELIVERED virtually this 27th DAY OF OCTOBER

2026

............................................................................

J W W MONGARE

JUDGE

In the presence of;

1. Mr. Asiyo holding brief for Mr. Nzavi for the Applicant

2. N/A for the Respondent

3. Abdisalan- Court Assistant