Access to justice for foreign entities: Reassessing S. 974 of the Company Act 2015 After Stichting Rabobank Foundation v Ava Chem Ltd
by admin on | 2025-09-02 17:54:53 Last Updated by admin on 2025-09-13 06:23:09
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This article critiques the Kenyan High Court’s restrictive interpretation of Section 974 of the Companies Act, 2015, in the case of Stichting Rabobank Foundation v Ava Chem Limited & Another 2024 eKLR, where a foreign company’s legal standing was ousted for failure to register as a foreign company in Kenya. This decision has significant implications for foreign lenders—particularly non-resident investors and crowdfunding platforms engaging in occasional or limited transactions in Kenya—raising doubts about enforceability of cross‑border financial support. The article argues that Section 974 was never intended to bar such entities from suing in Kenyan courts; the requirement for registration was solely meant for carrying on business in Kenya and does not in any way oust a company’s legal standing. The incorporation of a company, as a matter of international comity, gives it the legal capacity against the whole world; to sue and be sued. Failure to register is not a bar to legal standing but renders all contracts by the company void for lack of capacity to carry on business. Using comparative legal analysis, this article advocates for a purposive reading of section 974—one that differentiates between regulating business operations and denying legal standing. The paper ultimately
2. Introduction
Access to justice is a foundational principle of the rule of law. For foreign entities engaging with Kenyan businesses, the ability to enforce legal rights in Kenyan courts is essential to commercial fairness and confidence. However, legal ambiguity surrounding Section 974 of the Companies Act, 2015—which requires registration of foreign companies “carrying on business in Kenya”—has introduced uncertainty over...read more
