Firm stopped from attaching assets over Sh74m debt

The High Court has declined to allow Mombasa Cement’s application to freeze bank accounts and attach its customer’s assets over a disputed Sh73.7 million debt from supplied clinker.

Mombasa Cement sought orders of preservation, freezing, security, disclosure and attachment of Broad Contractors Company Limited before judgment over Sh73,756,431 debt from cement and other construction materials supplied on credit.

The Cement Sister Company Corrugated Sheet Limited has also sought similar orders before another court seeking to attach the assets of Broad Contractors.

The cement producers expressed fears that Broad Contractors would receive payments from various projects that it is carrying out and direct the funds towards payment of its other obligations before they can obtain effective judgment and enforcement.

However, Justice Letizia Wachira said mere indebtedness, financial difficulty, or a fear that Broad Contractors may not pay is generally not sufficient ground to grant attachment before a judgment. The judge said there must be clear evidence of the mischief contemplated under Order 39 Rule 5.

“My finding, therefore, is that the Plaintiff (Mombasa Cement) has not provided sufficient grounds as required under Order 39 Rule 5 of the Civil Procedure Rules for the issuance of the orders sought in the present application,” said Justice Wachira.

The judge said there is no indication why Mombasa Cement would think that Broad Contractors would direct the payments to other obligations. She said the existence of receivables does not demonstrate an intention by Broad Contractors to dissipate assets to frustrate a decree that may be issued against it.

Mombasa Cement Assistant Head of Sales and Marketing Farhad Sameja said the debt was due.