High Court Blocks Mombasa Cement From Freezing Customer Accounts

The commercial litigation strategy desks, corporate legal secretariats, and industrial war rooms across the country have been thrown into an absolute state of frenzy after the High Court firmly rejected an urgent application by Mombasa Cement Limited seeking to freeze bank accounts and attach assets belonging to its customer, Broad Contractors Limited, over a disputed KSh 73.7 million clinker debt.

The high-stakes legal battle stems from raw material supplies where Mombasa Cement accused Broad Contractors—a firm engaged in national Affordable Housing Programme projects—of failing to settle outstanding invoices for supplied clinker.

Seeking preservation orders under Order 39 Rule 5 of the Civil Procedure Rules, the cement giant petitioned the court to attach the contractor’s receivables and freeze its bank operational accounts to prevent potential dissipation of assets before the main suit is determined.

However, High Court Judge Justice Wachira dismissed the supplier’s application, ruling that the existence of an unpaid commercial debt does not automatically justify the drastic step of attaching a firm’s assets prior to judgment.

Citing established legal precedents—including Kanyoko t/a Amigos Bar & Restaurant v Nderu & Others—the court emphasized that attachment before judgment must not be granted lightly without concrete proof of an active intent to defraud or dissipate assets:

“The court noted that the mere existence of receivables or an unpaid commercial debt does not demonstrate an intention by Broad Contractors to dissipate assets to frustrate a decree that may eventually be issued… Pre-judgment attachment is an extraordinary remedy that requires clear evidence of targeted asset-stripping, which has not been established in this instance.” High Court Commercial & Tax Division Ruling

Broad Contractors vigorously defended the suit, denying claims that it agreed to a 1.5 per cent monthly interest charge and maintaining that its business operations and project receivables are legitimate ongoing concern assets.

The contractor also highlighted overlapping claims by other material suppliers, arguing that freezing its accounts would cripple ongoing construction operations.

While the ruling allows Broad Contractors to maintain uninterrupted banking operations and fulfill housing contracts, the High Court clarified that the order does not discharge the underlying KSh 73.7 million claim, which will now proceed to full trial.

These explosive judicial dispatches have instantly ignited a massive firestorm across corporate boardrooms, construction sector caucuses, and legal strategy war rooms nationwide.

As Mombasa Cement prepares for the main trial, the High Court’s refusal to freeze customer assets stands as a landmark subplot shaping corporate debt enforcement and commercial law in Kenya.

https://x.com/StandardKenya/status/2115685126415736858?a=v3VAPsmGXa-cdrbVNYg&s=20

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