The Injunction That Outran the Suit
A construction company, BuildCo, is in a dispute with a county government over a KSh 120 million road contract. BuildCo's director, through counsel, obtains an ex parte interim injunction on a Friday afternoon restraining the county from terminating the contract. The order is granted on the strength of a certificate of urgency and an undertaking as to damages signed by the director personally, who has no assets. The county was not heard. On the following Monday, the county's counsel appears and points out that: (a) the plaint was filed but the suit number on the injunction application does not match the plaint; (b) the application did not disclose that BuildCo had already been paid KSh 90 million; and (c) the contract contains an arbitration clause. The judge asks whether the injunction should be extended.
1. Apply the principles governing interlocutory injunctions to decide whether the injunction should be extended.
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The governing test (as developed in East African case law) requires:
- A prima facie case with a probability of success - not a mere arguable case.
- Irreparable injury that cannot be compensated by damages.
- If in doubt, the balance of convenience.
Application:
- Prima facie case: weakened by non-disclosure. BuildCo received KSh 90 million of KSh 120 million; whether the county's termination was justified depends on facts not disclosed.
- Irreparable injury: a money claim can ordinarily be compensated by damages; BuildCo has not shown why damages would be inadequate.
- Conduct: material non-disclosure is fatal. An applicant for an ex parte order owes a duty of uberrima fides; suppression of the KSh 90 million payment is a material omission. The court may discharge the injunction on this ground alone, irrespective of merits.
- Undertaking as to damages: given by a director with no assets - of little value; the court may require a bank guarantee or security.
Conclusion: The injunction should not be extended; it should be discharged, with liberty to BuildCo to apply on notice with full disclosure.
2. How does the arbitration clause and the mismatched suit number affect the application?
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Arbitration clause: Where the contract contains an arbitration agreement, the court's role is limited. A party may apply to stay proceedings and refer the dispute to arbitration; the court must stay unless the arbitration agreement is null and void, inoperative, or incapable of being performed. An interlocutory injunction may still be granted in support of arbitration in limited circumstances, but the existence of the clause is a strong factor against the court granting substantive relief and may render the suit itself vulnerable to a stay application. BuildCo should have considered whether urgent interim relief from the court was truly necessary or whether the arbitral tribunal could be constituted quickly.
Mismatched suit number: This is a procedural irregularity. If the injunction was issued in a suit that does not exist or is misdescribed, the order is defective and may be set aside. The court should be asked to regularise the pleadings (amend the plaint or the application) - but an injunction cannot stand on a non-existent suit.
Combined effect: The county has strong grounds to (i) discharge the ex parte order for non-disclosure, (ii) seek a stay of proceedings pending arbitration, and (iii) challenge the validity of the order for the suit-number defect. The court should discharge the injunction and, if the arbitration clause is valid, stay the suit.