Picture this, as a member of a company, you follow the Articles of Association to the letter. You submit your motion on time. Your issues are not trivial: financial accountability, how the CEO is recruited, how appointments are made. Then the final AGM agenda lands in your inbox, and your motion has quietly vanished. When you complain, the company tells you to take it up internally first. Can the board simply edit the members out of their own meeting?
On 22nd October 2026, the High Court at Milimani delivered a firm “No” in Paul Ngotho, Njeri Kariuki & Another v Chartered Institute of Arbitrators Kenya Limited (HCCOMM/E281/2025). Justice Peter Mulwa held that the company’s failure to include and circulate the members’ properly submitted motion amounted to oppressive conduct and a breach of the members’ contractual and statutory rights, and ordered the company not to suppress lawfully submitted members’ motions in future. The message to every board in Kenya is simple: the Articles are not a menu from which directors pick only the dishes they like.
The Story Behind the Dispute
On 8th April 2025, the Plaintiffs submitted “Additional Matters” for inclusion in the agenda of the company’s Annual General Meeting scheduled for 28th April 2025. The matters concerned alleged financial impropriety, the recruitment of the CEO, the manner of appointment of arbitrators, and a proposed Ordinary Members’ Task Force.
When the final agenda went out on 15th April 2025, the Additional Matters were missing, despite attempts to resolve the dispute internally. The members went to court, relying on the company’s Memorandum and Articles and on sections 114, 266, 267, 289, 290 and 780 of the Companies Act, 2015.
The company’s answer was a preliminary objection: the members had jumped the queue. Under Clause 20.1 of its Articles, any dispute involving the company or its members must go to the Board of Trustees, whose decision is “final and binding”. It added that an internal meeting had been scheduled for 25th April 2025, which was three days before the AGM.
The Three Key Holdings of the High Court
Holding 1: An Internal Dispute Clause Is Not a Lock on the Courtroom Door
The Court accepted that the doctrine of exhaustion, anchored in Article 159(2)(c) of the Constitution, generally requires parties to use available alternative dispute resolution mechanisms before going to court. But the doctrine is “not cast in stone”, and exceptional circumstances may justify going straight to court.
Two factors were decisive. First, the dispute was time-sensitive: an internal meeting three days before the AGM was not a sufficient and effective remedy. Second, and more significantly for every company, Clause 20.1 cannot exclude the jurisdiction expressly granted to the Court by the Companies Act to hear claims of oppression and unfair prejudice. The preliminary objection was dismissed.
Holding 2: A Company Must Obey Its Own Constitution
Clauses 7.5.5 and 8.2.5.1 of the Articles required the company to include and circulate additional matters properly raised by members. The Court stated the principle plainly: a company must adhere to its constitution and cannot, through its directors, bypass the rights its constitution grants to its members.
The Court also called out the double standard: the company “cannot simultaneously invoke the importance of its Articles to mandate that the Plaintiffs use internal procedures, while also ignoring its own responsibilities under those same Articles.” In short, a company cannot rely on its Articles when they help it and ignore them when they do not.
Holding 3: Suppressing Members’ Motions Can Be Oppression
Under section 780(1) of the Companies Act, a member may apply to court where the company’s affairs are conducted in a manner oppressive or unfairly prejudicial to the members generally or to some of them. The Court cautioned that not every disagreement over internal management is oppression; the conduct must reach the level of unfairness the section contemplates.
Applying Velani & 6 Others v Naran & 2 Others [2021] KEHC 75 (KLR), oppression is conduct that is “burdensome, harsh and wrongful”, or that lacks probity and fair dealing. Notably, a member need not show that they were treated differently from other shareholders. Because the omitted issues went to governance and accountability, and no adequate reason was given for excluding them, the omission breached the standard of fair dealing and was oppressive and unfairly prejudicial.
What the Court Granted, and What It Did Not
- Granted, a declaration: the failure to include and circulate the Additional Matters was oppressive and breached the Plaintiffs’ contractual and statutory rights.
- Granted, a forward-looking order: using its power under section 782 to regulate the company’s future affairs, the Court ordered the company to refrain in future from suppressing members’ motions lawfully submitted within the Articles’ timelines.
- Declined, AGM-specific orders: orders relating to the 28th April 2025 AGM had been overtaken by events.
- Declined, an investigation by the Registrar of Companies: the allegations of financial impropriety were serious but remained allegations without a sufficient evidential basis.
- Costs: given the partial success, each party bears its own costs.
PRACTICAL IMPLICATIONS FOR ALL COMPANIES
- Your Articles are a binding contract, not a decoration. Directors must comply with the procedural rights the Articles give members, including agenda, notice and circulation requirements.
- Audit your general meeting procedures now. Map every Articles provision on members’ resolutions, additional agenda items and circulation timelines against the Companies Act, and build them into the company secretary’s AGM checklist.
- Gatekeeping is not a governance tool. If a members’ motion is to be excluded, there must be a clear, documented and lawful reason. Discomfort with the topic, especially questions about finances or senior appointments, is not one.
- Internal dispute clauses have limits. They will be respected where they offer an effective and timely remedy, but they cannot exclude the Court’s statutory jurisdiction over oppression and unfair prejudice, and a meeting called days before an AGM is unlikely to qualify.
- Consistency is required. A company that insists members exhaust internal procedures must itself comply with the Articles. Selective reliance will weaken its position.
- Expect forward-looking orders. Courts can regulate a company’s future conduct under section 782, so a breach can result in continuing court-ordered obligations even after the AGM has passed.
- Members should act quickly and keep records. Submit motions strictly within the Articles’ timelines, keep proof of submission, and go to court promptly where the meeting date makes internal remedies ineffective.
- Not-for-profit and membership companies are included. The decision concerned a professional institute incorporated as a company. Any company limited by guarantee, association or member-based body should review its Articles in light of it.
The decision will be remembered as a reminder that boards run the company, but they do not own the agenda. Where the Articles give members a voice, directors must allow it to be heard.
This article is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary as set out in the article should be held without seeking specific legal advice on the subject matter. If you have any query regarding the same, please do not hesitate to contact the Litigation Department at Wamae & Allen LLP: Litigation@wamaeallen.com.
About the author
Allen Waiyaki Gichuhi, our Senior Partner, is an experienced and widely respected litigator with over 20 years experience in complex commercial litigation. He is actively involved in legal industry reforms and is ranked in Dispute Resolution Band 2 by Chambers Global. Learn more
Frankline M. Otieno is a dispute resolution associate, recommended professional and committed to offering sustainable client-centred solutions to legal issues.Frankline is astute in commercial litigation, securities law, banking law, intellectual property litigation, public procurement, land law litigation, Judicial Review and Administrative law litigation, sports law, tax litigation, administrative law, consumer protection law, competition law and constitutional litigation.
Denis Mutugi specializes in Commercial Litigation and Alternative Dispute Resolution.
Denis graduated with a Bachelor of Laws, LLB (Hons) from The University of Nairobi in 2021 and was admitted to the Roll of Advocates of the High Court of Kenya in the year 2023.
Denis has amassed a considerable wealth of experience in conducting legal research on various complex legal matters touching on Commercial, Insurance, Employment and Insolvency law and bankruptcy.
