ISSUE No. a). Whether the 1st and 2nd Defendants/Applicants herein through their filed Notice of Motion application dated 29th September, 2022 met threshold and hence were entitled to the orders to discharge, Vary and/or Set aside the injunction orders granted by this Court on 27th April, 2022 under the provisions of Order 40 Rules 7 of the Civil Procedure Rules, 2010.
21.The issue under this sub heading, the Court holds that the provision of Order 40 Rule 7 of the Civil Procedure Rules, 2010 provides thus:-In order to apply the provision of under Order 40 Rule 7, the Honorable Court based on the filed application made, should look into certain principles.
22.Firstly, in the case of: “James Juma Muchemi & Partners Limited – Versus - Barclays Bank of Kenya & Another (Nairobi HCCC No.339 of 2011 (2012) eKLR, Mabeya J, expressed the view that the jurisdiction under the provision of Order 40 Rule 7 was discretionary and like in all other discretions, the same must be exercised judiciously although there are no firm rules of law or practice that have been set down. In the case of “Ragui – Versus - Barclays Bank of Kenya (2002) 1 KLR 647, Ringera J stated ‘inter alia’:-
23.Secondly, I discern that the discretion under Order 40 Rule 7 ought to be sparingly used so as to avoid a situation where it would appear as if the same is being used as a tool for the abuse of the court. This is because before issuing the injunction, the Court must have been satisfied that it was necessary to grant the same. If it were not satisfied, the court would not have issued the injunction in the first place.
24.Thirdly, another principle to consider would be if the injunction was obtained by concealing facts which if put to the Judge in first instance would have affected his Judgment on whether or not to give the injunction, then a court can be inclined to vary or vacate the injunction in light of the new facts.
25.Fourthly, another issue to be factored into under the given circumstance while considering this application, if the circumstances of the suit have radically changed so that it is no longer necessary to have the injunction.
26.Now, turning to and applying these few enumerated principles herein in the instant case, there is no doubt that there are no tangible material facts that have been concealed or any change in the circumstances of this suit which will necessitate the Court discharging, varying and/or setting aside the injunction orders issued herein. If anything, with all due respect to the parties herein and from the filed pleadings, they have been too open, honest, transparent and accountable. For more reason, there is no need even to conduct a site visit at all.
27.On whether there has been circumstances that have drastically changed in the matter from the time when the injunction orders were issued. This is an interesting issue to consider keenly. In my view, in this matter, it is the Roller Coaster which broke the Carmel’s back. To begin with, the core contention by the 1st and 2nd Defendants/Applicants are that the Plaintiff/Respondent even after the Court clearly guiding and providing the parties directions on how they were to conduct themselves with regards to their obligations under the lease, the Plaintiff/Respondent had failed to comply with the said orders. The court ordered on the 27th April 2022 that this matter be dispensed with within 90 days pending the compliance of pretrial conferencing session on case management under Order 11 of the Civil Procedure Rule, 2010. From the Court file the Defendants/Applicants filed their Defence on 21st September 2022 which was more than 90 days after the said ruling was delivered.
28.The suit herein was filed by the Plaintiff/Respondent seeking a permanent injunction to restrain the 1st and 2nd Defendants/Applicants and sought for damages. By that time, it appeared that the Plaintiff/Respondent was able to satisfy the Court having established “a prima facie case” to the extent that it followed the conditions set by the Honourable court and those of the duly executed lease agreement dated 21st July 2015. Primarily, that was the reason the Court granted the injunction orders. In any event, if the Application herein was sought to protect the provisions of the lease agreement then, as we speak and from the facts adduced in the pleadings, with great humility, I am afraid there is no Lease to be protected anymore. I take judicial notice that the agreement has already been breached. There is no oata of doubt from its own admission and the filed statement of accounts, the Plaintiff/Respondent has not been remitting any rental payments from March, 2020 todate. They have cited numerous reason being the principles of Force Majure caused by the global Covid – 19 pandemic and the stringent conditions imposed by the Ministry of Health conditions which drastically affected the hospitality industry which includes the Plaintiff/Respondent’s business, continuous interference of the business operations by the Defendant/Applicants leading to physical assault charges preferred and criminal proceedings instituted. Suffice to say, this Court finds it rather disturbing that despite even being advised by Court and making an offer to pay the outstanding the rent allegedly being over Kenya Shillings Ten Million, it offered to pay paltry sum of Kenya Shillings Seventy Five Thousand (Kshs. 75, 000.00), but the same which was still never remitted. Perhaps, there is a complete breach of the terms and conditions of the duly executed Lease Agreement which may be ascertained during the full trial. But in the meantime, the Court is satisfied that there has been peculiar circumstances and drastic changes that has taken place on the matter from the time when the injunction orders were granted and now which has necessitated the filing of this application. I strongly hold that the injunction orders sought and granted to the Plaintiff/Respondent have been overtaken by events. The Plaintiff/Respondent are extremely non – committal to the terms and conditions of the Lease Agreement. I dare say, they have completely lost any fidelity to the Lease. The purpose for the said orders have already been spent.
29.Additionally, I also take note that the parties want to rely on the termination, force majeure and the applicable law dispute resolution and arbitration clause. It is clear from Clause 22(a) of the lease agreement that the parties submitted to the exclusive jurisdiction of the Courts of Kenya.
30.I should add that the requirement in Section 6 (1) of the Arbitration Act is not a mere technicality which can be diminished by Article 159 (2) (d) of the Constitution of Kenya as claimed by the Applicant. It is a substantial legal matter that aims at promoting and attaining efficacious resolution of disputes through arbitration by providing for stay of proceedings but only where a party desirous of taking advantage of an arbitration clause in a contract has applied promptly for stay of proceedings and made a request to have the matter referred to arbitration. I note that the parties did not directly address the issue of arbitration but the constant referral of the lease agreement in this application clearly implies the desire to have this matter referred to arbitration. In my opinion, the provisions of Section 6 (1) of the Arbitration Act are, unambiguous and self-explanatory. Courts have expressed themselves on the tenor and meaning of the section 6 (1) Arbitration Act.
31.The legal position is that a party who wishes to take advantage of the arbitration clause in a contract should either at the time of entering appearance or before the entry of appearance make the application for reference to arbitration. I agree with the court’s holding in “Eunice Soko Mlagui – Versus - Suresh Parmar and 4 others (2017) eKLR. The court stated that section 6 of the Arbitration Act is a specific statutory provision on stay of proceedings and referral of a dispute to arbitration where parties had entered into an agreement with an arbitration clause. The section prescribes the conditions under which a court can stay proceedings and refer a dispute to arbitration. Its intention is to regulate and facilitate the realization of the constitutional objective of promoting alternative dispute resolution. The Court stated that there was nothing in that provision that could be said to be derogating or subverting the constitutional edicts as regards alternative dispute resolution.
32.In the Supreme Court case of:- “Raila Odiga – Versus - IEBC & 3 Others, the Court observed that Article 159 (2), (d) of the Constitution simply means that a court of law should not apply undue attention to procedural requirements at the expense of substantive justice. The Article 159 was never meant to oust the obligation of litigants to comply with procedural imperatives as they seek justice from the courts.
33.All in all, the conclusion here is that the 1st and 2nd Defendants/Applicants herein have established a good case where the Court is convinced that the Plaintiff/Respondent deserves enjoying the prima facie Injunction orders particularly as they blatantly continue breaching the terms and conditions stipulated in the Lease Agreement.