Court Strikes Out Equip Agencies’ Suit Against DTB Over KSh272 Million Debt

Justice Benard Murunga rules that a fresh lawsuit cannot reopen a bank debt dispute settled through consent judgements, ending another challenge involving two properties.

The High Court has struck out a lawsuit against Diamond Trust Bank Kenya Limited over a KSh272 million debt settlement and disputed property sales.

Justice Benard Murunga ruled on October 15, 2026, that Equip Agencies Limited and three others were relitigating matters already determined through earlier proceedings.

The judge found that the suit was barred by res judicata and constituted an abuse of court process.

The ruling ended Commercial Case E316 of 2022, which also named auctioneer Stephen Karanja Kangethe, trading as Dalali Traders Auctioneers.

The plaintiffs must also pay the costs of the suit and the defendants’ successful application.

At the centre of the dispute lies a settlement agreement signed on April 22, 2021, after years of litigation over secured lending facilities.

The court found that the agreement had become the foundation of consent judgements that remained legally binding.

Justice Murunga warned against using fresh proceedings to undermine existing judgements, emphasising that litigation must eventually reach finality.

KSh272 Million Debt

The dispute arose from a financial arrangement provided by DTB to Equip Agencies Limited, which also involved three other plaintiffs acting as guarantors or chargors.

The security included two properties: L.R. No. 209/3477 in Nairobi and Eldoret Municipality/Block 10/34.

The parties subsequently entered into a settlement acknowledging an outstanding balance of KSh272 million, with interest at 14% upon default.

The plaintiffs paid an initial instalment of KSh68 million but defaulted on the remaining obligations, according to the ruling.

The agreement preserved the bank’s accrued statutory power of sale over the charged properties.

Crucially, the settlement was not left as a private contractual arrangement between the parties.

The earlier suits were compromised, and consent judgements were entered in accordance with the agreement’s terms.

Those judgements later became central to the bank’s successful application to terminate the fresh proceedings.

Earlier Court Defeats

The latest ruling followed several unsuccessful attempts to restrain the bank from selling the properties.

In February 2019, applications by Ashiite Chandrakant Patel and Grishma Ashiite Patel were dismissed in Nairobi High Court proceedings.

Bio Corn Products (EPZ) Limited subsequently lost its injunction application in Eldoret on September 24, 2019.

The Court of Appeal also dismissed the company’s related application on December 4, 2020.

The parties later settled their disputes through the April 2021 agreement, which became the basis of consent judgements.

However, litigation continued after the plaintiffs challenged the settlement and the bank’s enforcement measures.

On October 27, 2023, Justice E. C. Mwita dismissed an application on grounds of res judicata.

The judge also observed that the plaintiffs had not applied to set aside the consent judgements underpinning the settlement.

A further application suffered the same fate before Justice Alnashir on November 21, 2023.

That judge found the issues had been dealt with “in full, and conclusively”, without any material change in circumstances.

Neither ruling had been overturned on appeal, according to evidence presented before Justice Murunga.

The history of repeated applications strengthened the bank’s argument that the dispute had already reached legal finality.

Consent Judgement Barrier

In the latest proceedings, the plaintiffs challenged statutory notices, raised the in duplum rule and attacked the settlement’s enforceability.

They alleged duress, undue influence, misrepresentation and unconscionability in connection with the agreement.

These allegations were not established as factual findings in the October 2026 ruling.

Instead, Justice Murunga examined whether the plaintiffs could pursue those complaints while the consent judgements remained intact.

The judge explained that a consent judgement carries the force of a court judgement and cannot be casually displaced.

A party seeking to challenge such a judgement must follow the law governing the setting aside of consent judgements.

The judge rejected using another suit before a court of concurrent jurisdiction to mount a collateral attack.

The ruling stated that matters which “might and ought to have been raised” earlier fell within section 7 of the Civil Procedure Act.

That provision codifies res judicata, preventing courts from retrying matters already heard and finally decided between relevant parties.

Justice Murunga relied on the Supreme Court’s decision in John Florence Maritime Services Limited v Cabinet Secretary for Transport and Infrastructure.

The judgement identified finality, merits, competent jurisdiction and identity of parties and issues as essential elements.

The doctrine protects judicial resources while preventing parties from repeatedly reopening substantially identical disputes through differently framed proceedings.

Suit Struck Out

The plaintiffs did not file a replying affidavit or grounds opposing DTB’s application, which was served electronically in July 2026.

Nevertheless, Justice Murunga emphasised that an undefended application does not automatically justify striking out a suit.

The court must establish lawful grounds because striking out proceedings remains a drastic remedy.

After examining the litigation history, the judge found that the dispute concerned the same debt, settlement, properties and enforcement rights.

Adding Equip Agencies Limited as the first plaintiff did not change the essential character of the controversy.

The judge concluded that allowing the case to proceed would undermine existing judgements and encourage repetitive litigation.

The court consequently struck out the entire suit under Order 2 Rule 15(1)(d) of the Civil Procedure Rules.

READ ALSO: Court of Appeal Orders Government to Pay Divyesh Patel’s Equip Agencies KSh1.16 Billion

The plaintiffs were ordered to pay the costs of both the suit and the defendants’ April 2026 application.

The ruling did not recalculate the debt or determine whether the bank had breached the in duplum rule.

Nor did it establish the truth of the allegations challenging the settlement agreement.

Its decisive finding concerned whether the plaintiffs could reopen the dispute through fresh proceedings.

For DTB, the decision reinforces the continuing force of the consent judgements and the consequences of default.

For the plaintiffs, it closes this particular suit without setting aside the judgements underpinning the bank’s enforcement rights.

The broader message is clear: courts will not permit repeated litigation to displace judgements that remain legally binding.

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