Big Relief For Foreign Companies In Kenya As The High Court Departs From Past Decisions On The Right To Sue

“The question of registration, such as under Section 974(1) of the Companies Act, may be relevant in certain contexts, but is not, in itself, determinative of locus standi”- F. Gikonyo J 

For years, foreign companies looking to sue in Kenya have lived with a nagging fear. Thanks to rulings like Stichting Rabo Bank Foundation v Ava Chem [2024] and Root Capital Incorporated [2016], the message seemed clear: if you’re not registered in Kenya under Section 974 of the Companies Act, your case might be thrown out before it even starts. 

That uncertainty has been bad for business and justice alike. Even companies with strong claims have been forced to weigh the risk of being shut out on a technicality. 

Now, the High Court has taken a bold step in a different direction. 

The Bruton Gold Trading Case 

In Bruton Gold Trading LLC v Anne Atieno Amadi & 6 Others, Bruton, a Dubai-incorporated company filed suit in Kenya over alleged fraud, professional misconduct, and other unlawful acts. 

The defendants objected, arguing that because Bruton was not registered under Section 974, it lacked locus standi (the right to sue). They relied on the very line of reasoning that had previously sunk other foreign companies’ cases. 

Justice F. Gikonyo took a different view. Addressing the central issue of legal capacity and locus standi, the judge made several key findings: 

1. Legal Personality vs. Registration 

 A company's legal personality is established upon its incorporation in its country of origin, not necessarily through registration under of the Companies Act in Kenya. The judge noted that the first defendant did not dispute that the plaintiff is a limited liability company incorporated in Dubai. The argument that the plaintiff is "non-existent" due to a lack of registration under Section 974 is therefore irreconcilable with the facts. The court stated that the question of whether a foreign company is incorporated in its country of origin is an "evidentiary matter which requires probing of evidence and cannot therefore, found a preliminary objection". 

2. Locus Standi and the Constitution 

The judge emphasized that locus standi, or the right to be heard in a legal forum, is a fundamental principle of law rooted in the constitutional right to access justice. The Civil Procedure Act does not contain any specific provision that prohibits a foreign company from instituting a suit in Kenyan courts. Locus standi should be assessed within the broader constitutional context of access to justice, not narrowly confined to compliance with company registration requirements. 

3. Relevance of Section 974 

The judge determined that the right of a foreign company to seek a remedy in Kenyan courts is not necessarily dependent on the registration requirements of Section 974 of the Companies Act. Quoting the ruling in Superon Schweisstechnik India Ltd v Oxychem Africa Limited, the judge reiterated that "the question of registration, such as under Section 974(1) of the Companies Act, may be relevant in certain contexts, but is not, in itself, determinative of locus standi". Section 974 primarily deals with a foreign company's ability to "carry on business in Kenya". Whether the plaintiff's claim was founded on a business requiring such registration was a matter of fact that would need to be determined at trial. 

The judge dismissed the preliminary objection, with costs to be in the cause. 

What This Means for Foreign Companies 

This ruling is a welcome development for international investors and businesses operating in or with Kenya: 

1. Your right to sue is not automatically lost if you are unregistered under Section 974. 
2. Access to justice is protected as a constitutional principle. 
3. Registration disputes are factual matters, not pure points of law that can be used to shut your case down before it’s heard. 

But Here’s the Catch 

This decision comes from the High Court which means it is persuasive but not binding on other High courts. Previous contrary rulings still stand until the Court of Appeal or Supreme Court resolves the issue definitively. 

So while this case is a step forward, it’s not the final word. The legal terrain is still uneven, and any foreign company bringing a case in Kenya should proceed with a clear, proactive legal strategy. 

How We Can Help 

At CM Advocates LLP, we have deep experience representing both local and international clients in complex disputes involving cross-border issues, regulatory compliance, and jurisdiction challenges. 

We can: 

• Defend your right to sue – If your standing is challenged, we can argue your case using the Bruton precedent and other strategic legal tools. 
• Advise on compliance – We’ll guide you on whether, when, and how to register in Kenya under the Companies Act. 
• Represent you in commercial disputes – We handle high-value, high-stakes litigation with a proven track record of results. 
• Structure your operations for minimal legal risk – Whether you’re entering the Kenyan market or already here, we’ll help you navigate the law without unnecessary exposure. 

Don’t let legal uncertainty stop you from protecting your business interests in Kenya. Visit our website at www.cmadvocates.com, reach out to us via disputeresolution@cmadvocates.com, or contact our team directly. 

Contributors: Ambrose and Brian