High Court at Nairobi (Milimani Law Courts)
Republic v Registrar of Companies & 2 others; Ex Parte Schindler Limited
Republic v Registrar of Companies & 2 others; Ex Parte Schindler Limited  eKLR
Power of the Registrar of Companies to deregister a company that bore a similar name to an existing registered company where both companies were registered under the repealed Companies Act.
Republic v Registrar of Companies & 2 others; Ex Parte Schindler Limited
Miscellaneous Application No. 105 of 2019
High Court at Nairobi
JM Mativo, J
July 13, 2020
Reported by Ribia John and Ian Otenyo
Legal Systems – retrospective application of the law – circumstances where the law could act retrospectively – where a statute replaced and repealed an older version of the statute - retrospective application of the repealed statute - whether statutes should be considered as affecting future matters only in the absence of an express provision to the contrary where a statute repealed its older version - whether the Companies Act, 2015, applied to companies registered under the repealed Act – Companies Act, Cap 486 (repealed) sections 20(2), 58(5), (6) and (7)and 356
Company Law – registration and deregistration of companies –powers of the Registrar of Companies in registration of companies – where two registered companies bore similar names - rationale for protecting a company’s registered name – whether under the repealed Companies Act, the registrar of companies had the power to deregister a company that bore a similar name to an existing registered company – whether under the Companies Act, 2015, the Registrar of Companies had the power to deregister a company that bore a similar name to an existing registered company where both companies were registered under the repealed Companies Act – Companies Act, Cap 486 (repealed) sections 20(2), 58(5), (6) and (7)and 356
Judicial Review – prerogative orders – writ of mandamus – writ of prohibition – what were the conditions precedent for a writ of mandamus to issue – what were the conditions precedent for a writ of prohibition to issue
Judicial Review – prerogative orders – writ of prohibition – writ of prohibition vis-à-vis a quashing order - whether a writ of prohibition was similar to a quashing order thus preventing a tribunal or authority from acting beyond its scope of powers - what was the distinctive factor between a writ of prohibition and a quashing order
Schindler Limited (ex-parte applicant) was registered on February 15, 1989 under the repealed Companies Act and was subsequently issued with a Certificate of Incorporation by the Registrar of Companies (1st respondent). The 1st respondent registered Schindler United Elevator Kenya-China Limited (the 3rd respondent) on December 23, 2014 and was issued with a Certificate of Incorporation.
The ex-parte applicant sought an order of Mandamus to compel the 1st respondent to strike out the 3rd respondent from the Register of Companies. It also sought an order of prohibition to prohibit the 1st respondent or its agents, servants and or employees from continuing, sustaining or proceeding with registration of entities bearing its name or names that were strikingly similar which violated its Registered Trademarks and Licenses. Lastly, it prayed for costs of the case.
Whether statutes should be considered as affecting future matters only in the absence of an express provision to the contrary where a statute repealed its older version.
What was the rationale for the presumption against the retrospective application of legislation?
Whether the Companies Act, 2015, applied retrogressively to companies registered under the repealed Act.
Whether under the Companies Act, 2015, the Registrar of Companies had the power to deregister a company that bore a similar name to an existing registered company where both companies were registered under the repealed Companies Act.
What was the rationale for protecting a registered name under the Companies Act, 2015, or under the repealed Act?
What factors should a court consider before issuing;
a writ of mandamus,
a writ of prohibition.
Whether a writ of prohibition was similar to a quashing order thus preventing a tribunal or authority from acting beyond its scope of powers.
What was the distinctive factor between a writ of prohibition and a quashing order?
Relevant provisions of the law
Companies Act, CAP 486 (Repealed)
Change of Name
“2(a) If, through inadvertence or otherwise, a company on its first registration or on its registration by a new name is registered by a name which, in the opinion of the registrar, is too like the name by which a company in existence is previously registered, the first-mentioned company may change its name with the sanction of the registrar and, if he so directs within six months of its being registered by that name, shall change it within a period of six weeks from the date of the direction or such longer period as the registrar may think fit to allow.
(b) If a company makes default in complying with a direction under this subsection, the company and every officer of the company who is in default shall be liable to a fine not exceeding one hundred shillings for every day during which the default continues.”
356. Application of Act to companies formed and registered under the
“This Act shall apply to existing companies—
(a) in the case of a limited company, other than a company limited by guarantee, as if the company had been formed and registered under this Act as a company limited by shares;
(b) in the case of a company limited by guarantee, as if the company had been formed and registered under this Act as a company limited by guarantee; and
(c) in the case of a company other than a limited company, as if the company had been formed and registered under this Act as an unlimited company:
Provided that any reference, express or implied, to the date of registration shall be construed as a reference to the date at which the company was registered under that one of the repealed Acts under which such company was registered.”
In a business, identity took utmost importance. Not only should the business entity have been readily identifiable among its customers, but the goods or services it offered had to also be identified or associated with it. A unique identity could have been targeted by those that sought to cash in on it for nefarious reasons. Under the law, a business had to have a business name or a company name (if so incorporated).
By the time the 3rd respondent was registered, the name was not available for registration because a different company existed under a similar name. The admission was sufficient to merit the prayers sought
The Companies Act, 2015, applied to companies registered under the repealed Act. When compared to section 356 of the repealed Companies Act, the 1st respondent’s argument that the repealed Act did not empower it to deregister a company inadvertently registered as in the instant circumstances was legally frail. The legal position that laws did not operate retrospectively could not apply where the repealing statute expressly provided that it applied. Generally, a statute would be construed as operating prospectively only unless the legislature had clearly expressed a contrary intention.
The reasoning behind the presumption against the retrospective application of legislation was premised upon the unwillingness of the courts to inhibit vested rights. The general rule was that, in the absence of an express provision to the contrary, statutes should be considered as affecting future matters only; and more especially that they should if possible be so interpreted so as not to take away rights actually vested at the time of their promulgation. A further reason for its existence was that the creation of new obligation or an imposition of new duties by the Legislature was not lightly assumed. Thus a statute was presumed not to apply retrospectively, unless it was expressly or by necessary implication provided otherwise in the relevant legislation. Unless a contrary intention appeared from new legislation which repealed previous legislation, it was presumed that no repeal of an existing statute had been enacted in relation to transactions completed prior to such existing statute being repealed.
Where the statutory provision confirmed the existing law, it was not a case of true retrospectivity, since true retrospectivity meant that at a past date, the law was to be taken to have been that which it was not. Thus, if the legal position was A, and enactment X was designed merely to confirm A, then it could not be said that, subsequent to the promulgation of X, the legal position had become A. Accordingly, true retrospectivity could only become an issue once X replaced, amended or supplemented A. Presumptions, however strong, were merely an aid to interpretation and had to yield to the intention of the legislature as it emerged from any particular statute. Thus, the answer to the question whether a particular statute had retrospective operation could not be found by simply determining whether the statute dealt with substantive law or matters of procedure. One had to always to ascertain the intention of the legislature.
The Constitution of Kenya, 2010, (Constitution) required a purposive approach to statutory interpretation. The purpose of a statute played an important role in establishing a context that clarified the scope and intended effect of a law. A contextual or purposive reading of a statute had to remain faithful to the actual wording of the statute. A contextual interpretation of a statute had to be sufficiently clear to accord with the rule of law.
In giving effect to the purposive approach, a court should, at least:
look at the preamble of the Act or at the other express indications in the Act as to the object that had to be achieved,
study the various sections wherein the purpose could be found,
look at what led to the enactment (not to show the meaning, but also to show the mischief the enactment was intended to deal with); and
draw logical inferences from the context of the enactment.
A purposive construction of the Companies Act, 2015, required courts and regulatory bodies tasked with enforcement of the Act to interpret and apply the Act in a manner that gave effect to its objects as set out in the preamble. The provisions of the Act proscribing regulation of registration of companies entrenched in the preamble had to be given effect when interpreting the statute. Those statutory and policy reasons discernible from the preamble included the need to ensure that double registration of names was not permitted. The legislative intention discernible form section 356 of the repealed Act was clear; the Act applied to companies registered under the repealed Act. Pursuant to section 20 of the Act, the Registrar had the power to deregister a company that had been inadvertently registered.
The rationale for protecting a registered name under the Companies Act, 2015 or under the repealed Act was not hard to find. Where the names of companies were the same or substantially similar and where there was a likelihood that members of the public would be confused in their dealings with the competing parties, those were important factors which the court would take into account when considering whether or not a name was undesirable. The rationale was also discernible in the common law principles concerning passing off which had an impact on whether a company may use its registered company name in trade. No man could pass off his goods as those of another. By implication, that offered some protection to a business that had established goodwill as a result of the use of a name/brand in respect of goods or services. Another business could not register that name as its company name if doing so would engender a misrepresentation that the source of its goods or services was the same as that of the business with established goodwill.
An order of mandamus would issue to compel a person(s) who had failed to perform the duty to the detriment of a party who had a legal right to expect the duty to be performed. Mandamus was a judicial command that required the performance of a specified duty, which had not been performed. It was employed to compel the performance, when refused, of a ministerial duty, that being its chief use. It was also employed to compel action, when refused, in matters involving judgment and discretion, but not to direct the exercise of judgment or discretion in a particular way, nor to direct the retraction or reversal of action already taken in the exercise of either.
The eight factors that had to be present for the writ of mandamus to issue were;
there should be a public legal duty to act,
the duty should be owed to the applicants,
there should be a clear right to the performance of that duty, meaning that:
the Applicants had satisfied all conditions precedent; and
there should have been:
a prior demand for performance,
a reasonable time to comply with the demand, unless there was outright refusal; and
an express refusal, or an implied refusal through unreasonable delay.
No other adequate remedy was available to the applicants,
the Order sought had to be of some practical value or effect;
there was no equitable bar to the relief sought;
On a balance of convenience, mandamus should lie.
The writ of prohibition arrested the proceedings of any tribunal, corporation, board or person, when such proceedings were without or in excess of the jurisdiction of such tribunal, corporation, board or person. A prohibiting order was similar to a quashing order in that it prevents a tribunal or authority from acting beyond the scope of its powers. The key difference was that a prohibiting order acted prospectively by telling an authority not to do something in contemplation.
Application allowed; no order as to costs.
An order of mandamus issued compelling the 1st respondent to strike off the 3rd respondent from the Registrar of Companies.
An order of prohibition issued prohibiting the Registrar of Companies, its agents, servants and or employees from continuing, sustaining or proceeding with the registration of the 3rd respondent or any entity that bore the ex parte applicant’s name or names that were strikingly similar and/or which infringed the applicant’s trademarks and licenses.
Texts & Journals
Thornton, GC., (Ed) (1996) Legislative Drafting Bloomsbury Professional 4th edn p155
1. Abercombie & Kent Ltd v Abercombie & Kent (Uganda) Ltd & others (Civil Suit No 1035 of 1995) UGHC 12(30 November 1999)-(Followed)
2. Agility Logistics Limited & 2 others v Agility Logistics Kenya Limited Civil Case No 840 of 2010;eKLR–(Explained)
3. Kenya National Examinations Council vs R ex parte Geoffrey Gathenji Njoroge & 9 others Civil Appeal 266 of 1996; eKLR
4. Rawal, Kalpana v Judicial Service Commission & 3 others Civil Appeal No 1 of 2016;eKLR –(Explained)
5. Republic v Attorney General ex parte Kensington International Ltd & another –(Cited)
6. Republic v Principal Secretary, Ministry of Mining ex parte Airbus Helicopters Southern Africa (PTY) Ltd Judicial Review 470 of 2016;  eKLR– (Cited)
7. Republic v Registrar of Companies & another ex parte Atlantic Group (K) Limited –(Cited)
8. Republic v Registrar of Companies & another ex parte Golden Africa Kenya Limited Judicial Review Application 258 of 2018;eKLR –(Explained)
9. Republic v Registrar of Companies Ex parte Megascope Healthcare (K) Limited & another Miscellaneous Application 329 of 2016;[–(Explained)
1. African Christian Democratic Party v Electoral Commission and others  ZACC 1; 2006 (3) SA 305 (CC); 2006 (5) BCLR 579 (CC); at paras 21, 25, 28 and 31; Daniels v Campbell NO and others ZACC 14; 2004 (5) SA 331 (CC); 2004 (7) BCLR 735 (CC) at paras 22-3; Stopforth v Minister of Justice and others; Veenendaal v Minister of Justice and others  ZASCA 72; 2000 (1) SA 113 (SCA) –(Followed)
2. Dawood and Another v Minister for Home Affairs and others; Shalabi and another v Minister for Home Affairs and others; Thomas and another v Minister for Home Affairs and others ZACC 8; 2000 (3) SA 936 (CC) ; 2000 (8) BCLR 837 (CC) – (Followed)
3. Genrec MEI (Pty) Ltd v Industrial Council for the Iron, Steel, Engineering, Metallurgical Industry & others  ZASCA 143; 1995(1) SA 563- (Explained)
4. Jaga v Dönges NO and Another; Bhana v Dönges NO and another1950 (4) SA 653 (A) –(Mentioned)
5. Kruger v President Insurance Co Ltd 1994 (2) sa 495 (d)- (Mentioned)
6. Manyeka v Marine and Trade Insurance CoLtd  (1) SCA 844-(Mentioned)
7. Natal Joint Municipal Pension Funds v Endumeni Municipality  ZASCA 13;2AII SA 262(SCA);2012 (4) SA 593 (SCA) (16 March 2012)– (Explained)
8. Nkabinde & another v Judicial Service Commission & others ZASCA 12; 2016 (4) SA 1 –(Mentioned)
9. Polaris Capital (Pty) Ltd v The Registrar of Companies and another  ZASCA 131; 2010 (2) SA 274(SCA)- (Followed)
10. Stopforth v Minister of Justice and others; Veenendaal v Minister of Justice and other  ZASCA 72; 4 AII SA 383 (A)–(Explained)
11. Unitrans Passengers (Pty) Ltd t/a Greyhound Coach Lines v Chairman, National Transport Commission & others: Transnet Ltd (Autonet Division) v Chairman, National Transport Commission & others- (4) SA 1-(Mentioned)
1. Apotex Inc v Canada (Attorney General)  3 SCR 1100 –(Followed)
2. Dragan v Canada (Minister of Citizenship and Immigration) (2003) 228 FTR 52 (TD)– (Followed)
United states of America
Wilbur v United States ex rel Kadrie, 281 US 206, 218 (1930) – (Followed)
1. In re Birdie v General Accident Fire and Life Assurance Corporation Ltd 1949 Ch D 121 130 – (Followed)
2. Parker-Knoll Ltd v Knoll International Ltd HL 1962 –(Followed)
3. Reckitt & Colman v Borden  1 AII ER 873– (Followed)
1. Constitution of Kenya, 2010 article 159 (2) –(Interpreted)
2. Companies (General) Regulations, 2015 (Act No 17 of 2015 Sub Leg) regulation 11(a) (b) (c); 13 –(Interpreted)
3. Companies Act (cap486) (Repealed) sections 57, 58(1)(2)(5)(6)(7); 59 –(Interpreted)
4. Companies Act, 2015 (Act No 17 of 2015) sections 20(2); 58; 356-(Interpreted)
5. Trade Marks Act (cap 506) section 7(1) –(Interpreted)