Stephen Njoroge Gikera & Punit Dipak Vadgama t/a Gikera & Vadgama Advocates v Econite Mining Company Limited & 7 others [2018] KECA 310 (KLR)
The bottom line
#Kenya's Court of Appeal ruled a lawyer who controlled his client company could not claim lack of instructions to abandon it mid-case.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the learned trial Judge erred in lifting the veil of incorporation of the 1st respondent
- 2.Whether the learned Judge erred in dismissing the appellant's unopposed application for leave to cease acting for the 1st respondent on the ground of want of instructions
Key legal issues
#Whether the trial Judge rightly lifted the veil of incorporation of the 1st respondent
Yes. The managing partner of the appellant firm was the majority shareholder and one of two directors of the 1st respondent; he represented the directing mind and will of the company and could not withhold instructions from himself. The veil was properly lifted to address the abuse of process.
The court applied the Salomon principle of separate corporate personality but recognised its exceptions. Relying on Halsbury's Laws and Jones v Lipman, it held that where a company is used as a mask by its controlling mind to avoid obligations - here, to evade court orders compelling payment of premiums - equity disregards the corporate form. Mr Gikera's dual role made the claim of want of instructions an absurdity and an abuse of process.
Whether an advocate may cease acting for a corporate client on the ground of want of instructions where the firm's managing partner controls the client
No. Where the managing partner is the majority shareholder and director of the client company, want of instructions cannot arise, and an application to cease acting in such circumstances is an abuse of the court process.
The court found that the application to cease acting was filed immediately after the company was directed to comply with interlocutory orders requiring payment. The directing mind of the company was the same person as the firm's managing partner, so the feigned lack of instructions was a device to delay and defeat the proceedings, which the trial Judge rightly characterised as abusive.
The duty of a first appellate court
A first appellate court must re-evaluate, re-assess and re-analyse the evidence on the record and determine whether the trial court's conclusions should stand, with caution as it neither saw nor heard the witnesses.
The court restated the standard from Abok James Odera v John Patrick Machira, noting the matter had been determined on affidavits and submissions. It subjected the trial court's decision to fresh analysis while bearing in mind the usual caution applicable to first appeals.
Legal principles established
#- A court may lift the veil of incorporation where a controlling director/shareholder seeks to use the company's separate personality to evade obligations or abuse court process, including by feigning want of instructions to company advocates
- The corporate veil will be lifted not only in cases of fraud or improper conduct but wherever the character of the company or the identity of those controlling it is a relevant feature of the litigation
Court orders
#- 1.Appeal dismissed with costs to the 8th respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- High Court at Mombasa
- High Court Commercial Cause No. 117 of 2016 and HC JR No. 8 of 2016
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (Constitution of Kenya, Article 164; the judgment does not cite a specific provision)
Relief refused
#Leave to cease acting as advocates for the 1st respondent
The application was an abuse of court process; the managing partner of the appellant firm was the majority shareholder and director of the 1st respondent and could not withhold instructions from himself
Costs
Appeal dismissed with costs to the 8th respondent, who participated in the appeal
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
In conclusion we are not persuaded the Judge erred and in the circumstances we find this appeal devoid of merit. We order it dismissed with costs to the 8th respondent who participated in this appeal.
He cannot be said to have withheld instructions from himself (as the managing partner to the appellant law firm). It was an absurdity that the learned Judge rightly addressed by lifting the veil of incorporation.
The corporate persona of a company will be dispensed with in cases where it is apparent that the company is being used as 'A creature of [the controlling director], a device and a sham, a mask which he holds before his face in an attempt to avoid recognition by the eye of equity.'
an abuse of process takes place where the proceedings permitted by the rules of court to facilitatethe pursuit of the truth are used for purposes extraneous, to that objective
Issues in the judgment
#The case is styled 'Beinosi vs. Wiyley 1973 SA 721 [SCA]' and is described as 'a persuasive case by the Court of Appeal of South Africa', but the citation format and designation appear irregular; the case name and citation are recorded as printed
Salomon v Salomon is cited with the year [1897], whereas the standard report citation is [1897] AC 22 (commonly rendered 1897); recorded as printed in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Kiunga v Wellendorf (Environment and Land Case Civil Suit E005 of 2025) [2026] KEELC 491 (KLR)[2026] KEELC 491 (KLR)29 Jan 2026
Cite this brief
#Cite this brief
Caselaw, "Stephen Njoroge Gikera & Punit Dipak Vadgama t/a Gikera & Vadgama Advocates v Econite Mining Company Limited & 7 others [2018] KECA 310 (KLR)", Case Analysis (2018). Civil Appeal No. 5 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/310/eng@2018-09-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.