https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12788

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **COMMERCIAL AND TAX DIVISION** **INSOLVENCY PETITION NO. E037 OF 2026** **IN THE MATTER OF AINU SHAMSI HAULIERS LIMITED** **AINU SHAMSI HAULIERS LTD ……. PETITIONER/APPLICANT** **VERSUS** **DIAMOND TRUST BANK KENYA LIMITED ….. 1ST RESPONDENT** **PONANGIPALLI VENKATA RAMANA RAO..… 2ND RESPONDENT** **SWAROOP RAO PONANGIPALLI.…….……….…3RD RESPONDENT** **RULING** 1. Before this Court for determination is the application dated 8th June, 2026, seeking, *inter alia*; 1. ***Spent.*** 2. ***Spent.*** 3. ***That this Honourable court be pleased to issue an interim mandatory order directing the immediate unfreezing, reactivation and restoration to normal operations of the petitioner’s bank accounts held at Kenya Commercial Bank (KCB) to avert complete financial collapse.*** 4. ***That the Respondents be restrained by an interim injunction from taking possession of, advertising for sale or meddling with the commercial vehicle fleet and transport yard located on LR No. 209/18644 Ramtons, Off Mombasa Road, Nairobi or any other property of the petitioner subject to the dispute herein.*** 5. ***That an order do issue directing the petitioner and the 1st Respondent to take joint account to establish the correct amount owing under the loan facility and scrutinize the legality and effect of the upfront deduction of “profit” and the 10% p.a penalties. The joint report be presented to court within such period the court may deem fit.*** 6. ***That this substantive Insolvency Petition be consolidated and heard concurrently with registry file Insolvency Cause No. E097 of 2026 to clear all pending procedural objections.*** 2. The application is supported by the affidavit of a director of the Applicant company, a private limited liability company engaged in the long-haul transport and logistics business within East Africa. The deponent states that the Applicant has maintained a banking relationship with the 1st Respondent for over a decade and that between 2013 and 2018, the parties executed various security instruments in respect of financing facilities advanced to the Applicant. 3. The Applicant's case is that it first became aware of the appointment of the 2nd and 3rd Respondents as joint administrators through an email sent by the 1st Respondent on 26th May, 2026. The following day, a notice was published in the Daily Nation announcing that the Applicant had been placed under administration. According to the Applicant, it subsequently learnt that the 1st Respondent had filed a statutory declaration in Insolvency Cause No. E097 of 2026 claiming indebtedness of over USD 47,060,000 and Kshs. 30,000,000/-. 4. The Applicant disputes the alleged indebtedness, contending that the figures claimed are grossly exaggerated and unlawfully inflated through the imposition of a 10% per annum default penalty and the deduction of USD 974,709 as advance profit. It further alleges that certain debentures purportedly created in 2022 were never authorized by the company nor registered with the Business Registration Service and the corresponding funds were never disbursed. In support of this contention, it relies on a CR12 search conducted in January 2026 which shows that the last registered debenture was registered in 2018. 5. The Applicant further contends that despite several requests, the 1st Respondent failed to provide statements of account or prior demand notices before the appointment of the administrators. It argues that the appointment did not comply with the mandatory provisions of Sections 534 and 537 of the Insolvency Act as no demand was served and its alleged inability to pay debts was never demonstrated. It also challenges the assertion that the statutory objectives of administration under Section 522 of the Act were capable of being achieved. 6. The Applicant additionally avers that the 1st Respondent sought to regularize what it describes as “irregular lending arrangements” through a replacement letter of offer dated 30th November, 2024, which the Applicant declined to execute. It contends that the subsequent appointment of administrators was precipitated by that refusal. 7. It is further the Applicant's case that although the joint administration was stated to have taken effect on 14th Mayc, 2026, neither the company nor its directors were formally served with the notice of appointment or any demand for possession as contemplated under Section 566 of the Insolvency Act. They remained uninformed until the email of 26th May, 2026, and the newspaper advertisement of 27th May, 2026. The Applicant alleges that on 27th May, 2026, following publication of the administration notice, agents acting on behalf of the Respondents attempted to gain access to its business premises and take possession of its transport yard and assets. The directors allegedly denied them access in order to preserve the status quo. 8. The Applicant also contends that the debt claimed by the 1st Respondent offends the *in duplum* rule, given that the original facility was approximately USD 10,000,000 while the amount currently claimed exceeds USD 47,000,000. It therefore maintains that the claim is unlawful and unenforceable. 9. The Applicant further challenges the suitability of the 2nd and 3rd Respondents to act as administrators. It alleges that investigations conducted into the administrators and their firm, Tact Consulting LLP, revealed a pattern of aggressive takeovers, litigation attrition and liquidation of assets rather than corporate rescue. In particular, it references their involvement in the Mumias Sugar matter and contends that their track record raises concerns regarding their fitness to oversee the administration of the Applicant. 10. The Applicant states that it remains in possession of its offices, transport yard, and operational assets and continues to conduct its logistics business through its management, employees, and drivers. It expresses apprehension that unless the orders sought are granted, the Respondents may disrupt its operations, adversely affect its employees and stakeholders, and cause irreparable harm to the business. It maintains that the public interest favours preservation of the company as a going concern pending determination of the petition. ***The Respondents’ Case*** 1. The application is opposed through the Replying Affidavit sworn on 22nd July, 2026, by the 1st Respondent's Legal Manager and the Replying Affidavit sworn on 15th July, 2026, by the 2nd Respondent. 2. The 1st Respondent states that over the years it extended various credit facilities to the Petitioner, including term loans and overdraft facilities advanced between 2013 and 2022 for purposes of refinancing existing indebtedness, settling liabilities of related entities and supporting the Petitioner's working capital requirements. It avers that the facilities were secured by a series of duly registered debentures, namely an all-assets debenture and several supplemental debentures executed and registered between 2013 and 2022. 3. According to the 1st Respondent, the facilities were restructured on several occasions, including in December 2019 and May 2022, resulting in aggregate facilities comprising Term Loan I, Term Loan II and Term Loan III. It maintains that all securities remained valid and enforceable throughout the restructurings. 4. The 1st Respondent further avers that the Petitioner subsequently defaulted in servicing the facilities, prompting the issuance of demand letters dated 8th July, 2024, and 16th September, 2024. It states that as at 12th May, 2026, the Petitioner was indebted to it in the sum of USD 17,146,173.39 and Kshs.108,544,325.61/-, exclusive of accrued interest. 5. It is the 1st Respondent's case that owing to the Petitioner's default, it exercised its statutory power under section 534(1) of the Insolvency Act and appointed the 2nd and 3rd Respondents as Joint Administrators. It contends that the appointment was effected through the filing of the requisite statutory documents in High Court Commercial Insolvency Notice No. E097 of 2026 and was fully compliant with the Insolvency Act. It therefore disputes the Petitioner's assertion that the administrators were appointed unlawfully or for the purpose of dismantling the company's operations. The 1st Respondent maintains that the administration is intended to achieve the statutory objectives set out under Section 522 of the Act, including the rescue of the company as a going concern. 6. The 1st Respondent further contends that the grant of the orders sought would expose the company's assets and records to possible dissipation or concealment, thereby prejudicing its interests as a secured creditor and undermining the administration process. 7. The 2nd and 3rd Respondents similarly oppose the application. They contend that the Petitioner's interpretation of Sections 534 and 537 of the Insolvency Act is erroneous, arguing that a holder of a qualifying floating charge is entitled to appoint an administrator out of court upon the occurrence of contractual events of default without first obtaining a judicial determination of insolvency. They maintain that the Petitioner's admitted default constituted sufficient basis for the exercise of that statutory right and that both Joint Administrators satisfy the qualifications prescribed under Section 526 of the Act. 8. The Joint Administrators further deny allegations of impropriety, bias or misconduct, describing such allegations as speculative and unsupported by evidence. They contend that the appointment lawfully took effect on 14th May, 2026, upon execution of the statutory declaration and filing of the notice of appointment, thereby triggering the statutory moratorium. Consequently, they argue that the Petitioner's directors lacked authority to institute the present proceedings without their consent. 9. It is further their case that the administration process was conducted in compliance with Section 563 of the Insolvency Act. They state that notices of appointment were issued to the Petitioner, the appointment was publicly advertised and they thereafter assumed control of the company's assets and operations as required by law. They maintain that the freezing of bank mandates and taking possession of company assets were necessary steps in the discharge of their statutory obligations. 10. The Joint Administrators also accuse the Petitioner's directors of obstructing the administration process through unlawful interference with company premises and assets. They contend that any disputes regarding the computation of interest, penalties or reconciliation of accounts do not invalidate the appointment of the administrators and ought instead to be addressed within the administration process. 11. Accordingly, the Respondents urge the Court to dismiss the application with costs and allow the administration process to proceed in accordance with the Insolvency Act. 12. The application was canvassed by way of written submissions. Although the Court directed all parties to file submissions within the specified timelines, only the Applicant's written submissions dated 13th July, 2026, were on record at the time of writing this ruling. ***Applicant’s Submissions*** 1. The Applicant submitted that the application raises three issues for determination: whether the Petitioner has established a *prima facie* case warranting the grant of interlocutory injunctive relief; whether the appointment of the 2nd and 3rd Respondents as Joint Administrators was lawful; and whether the court should preserve the substratum of the Petition pending its determination. 2. On the existence of a *prima facie* case, the Applicant relied on ***Giella v Cassman Brown & Co. Ltd* [1973] EA 358, *Nguruman Limited v Jan Bonde Nielsen & 2 Others* [2014] eKLR** and ***Mrao Ltd v First American Bank of Kenya Ltd & 2 Others* [2003] eKLR**. It argued that the Petition discloses substantial statutory, constitutional and procedural violations arising from the appointment of the 2nd and 3rd Respondents as Joint Administrators, which issues warrant full interrogation at trial. 3. The Applicant challenged the legality of the appointment on the basis of Sections 522, 534 and 537 of the Insolvency Act. It contended that administration is intended to facilitate corporate rescue and not debt collection, and that the statutory prerequisites for appointment had not been satisfied. According to the Applicant, the Respondents failed to demonstrate, through audited accounts, financial statements or any independent assessment, that the Applicant was unable or likely to become unable to pay its debts, or that administration was reasonably likely to achieve the statutory objectives set out in the Act. It further maintained that the alleged indebtedness is contested, including the computation of the debt, the interest charged, the conversion of the Sharia/Murabaha facility into a conventional facility, and the validity of the securities relied upon by the 1st Respondent. Consequently, it argued that the administration process had been improperly invoked as a debt recovery mechanism, contrary to the principles articulated in ***Kevian Kenya Limited v Hipora Business Solutions East Africa Limited & Another* [2024] eKLR**. 4. The Applicant further submitted that the appointment of the Administrators infringed its constitutional rights under Articles 40, 47 and 50 of the Constitution. It argued that despite requests for statements of account, reconciliations and disclosure of material information relating to the alleged debt, the 1st Respondent failed to provide the same. As a result, the Applicant contended that it was denied an opportunity to interrogate and challenge the alleged indebtedness before the administrators assumed control of its affairs, thereby interfering with its proprietary rights without due process. 5. The Applicant also faulted the conduct of the 2nd and 3rd Respondents, arguing that they failed to undertake an independent assessment of the Applicant’s financial position before accepting the appointment. It maintained that the administrators merely adopted the allegations of the 1st Respondent without independently verifying the Applicant’s financial status, investigating the disputed debt, or assessing whether administration would achieve the statutory objectives under section 522 of the Insolvency Act. 6. On the principles governing the grant of interlocutory relief, the Applicant submitted that it had established all the requisite conditions. It argued that continuation of the administration would occasion irreparable harm through disruption of business operations, loss of customer confidence, interference with banking arrangements, termination of contracts and damage to its goodwill and commercial reputation, none of which could be adequately compensated by damages. Relying on ***Nguruman Limited v Jan Bonde Nielsen & 2 Others* [2014] eKLR,** it submitted that the goodwill and commercial relationships of a going concern built over many years constitute intangible assets incapable of precise monetary valuation. It further argued that the balance of convenience favoured maintaining the status quo, since any injury arising from an unlawful administration would be difficult to reverse if the Petition ultimately succeeded. Reliance was also placed on ***Suleiman v Amboseli Resort Limited* [2004] eKLR** for the proposition that the court should adopt the course carrying the lower risk of injustice. The Applicant added that public interest favoured preservation of its business as a going concern employing numerous persons and contributing to the economy. 7. On the issue of jurisdiction, the Applicant contended that the appointment of administrators under section 534 of the Insolvency Act is not immune from judicial scrutiny. It argued that Articles 165(3)(a) and (d) of the Constitution confer upon the High Court jurisdiction to examine the legality of statutory decisions. It further relied on sections 525, 560, 563, 595, 597 and 604 of the Insolvency Act, submitting that administrators remain subject to the supervision of the court and that the court possesses statutory authority to review, suspend or terminate an administration where circumstances justify such intervention. 8. Finally, the Applicant submitted that it was necessary to preserve the substratum of the Petition pending determination of the dispute. It argued that unless the administration process was stayed, the administrators would continue exercising extensive statutory powers, including displacing the directors from management, altering banking arrangements and affecting contractual relations, thereby causing irreversible damage to the business. The Applicant further contended that if the Petition ultimately succeeded after substantial steps had been undertaken in the administration, it would be impossible to restore the company to its prior position due to the potential loss of employees, customers, contracts and goodwill. It therefore urged the court to preserve the status quo by suspending the administration pending the hearing and determination of the Petition. 9. In conclusion, the Applicant maintained that it had established an arguable and compelling case regarding the legality of the appointment of the Joint Administrators, compliance with the Insolvency Act and alleged violations of constitutional rights. It submitted that the balance of convenience and public interest favoured preservation of the status quo and, urged the court to allow the Notice of Motion dated 8th June, 2026, with costs in the cause. ***Analysis and Determination*** 1. Having carefully considered the Notice of Motion dated 8th June, 2026, the grounds appearing on its face, the Supporting Affidavit together with the annexures thereto, the Replying Affidavits filed by the 1st, 2nd and 3rd Respondents together with their respective annexures, and the Applicant's written submissions, the court is of the considered view that the following issues arise for determination: - * 1. **Whether the Applicant has satisfied the threshold for the grant of the interlocutory mandatory and prohibitory injunctions sought.** 2. **Whether this court should direct the Applicant and the 1st Respondent to undertake a reconciliation of accounts.** 3. **Whether this Petition should be consolidated with Insolvency Cause No. E097 of 2026.** **Whether the Applicant has satisfied the threshold for the grant of the interlocutory mandatory and prohibitory injunctions sought.** 1. Before considering the rival positions advanced by the parties, it is necessary to first point out the nature of the relief sought. Prayer 3 of the Notice of Motion seeks an order directing the immediate unfreezing, reactivation and restoration to normal operations of the Petitioner's bank accounts held at Kenya Commercial Bank. Prayer 4 seeks an order restraining the Respondents from taking possession of, advertising for sale or otherwise dealing with the Petitioner's commercial vehicle fleet and transport yard situated on L.R. No. 209/18644, Ramtons, Off Mombasa Road, Nairobi pending the determination of the Petition. 2. Whereas Prayer 4 seeks a prohibitory injunction intended to preserve the subject matter of the dispute, Prayer 3 seeks a mandatory injunction compelling the reversal of actions that had already been undertaken pursuant to the appointment of the 2nd and 3rd Respondents as Joint Administrators. The Applicant is therefore not merely asking this Court to preserve the existing status quo. Rather, it invites the Court to restore the management of its banking operations to the position obtaining before 14th May, 2026, being the date on which the Respondents contend that the administration commenced. 3. The distinction is significant because the law imposes a higher threshold where an Applicant seeks a mandatory injunction at an interlocutory stage. The principles governing the grant of interlocutory mandatory injunctions are now well settled. Unlike an ordinary interlocutory injunction, which is principally governed by the principles set out in ***Giella v Cassman Brown & Co. Ltd* [1973] EA 358,** a mandatory injunction at an interlocutory stage is granted only in exceptional circumstances. In ***Kenya Breweries Ltd & Another vs Washington O Okeya* [2002] eKLR**, the Court of Appeal held: - *“****A mandatory injunction ought not to be granted on an interlocutory application in the absence of special circumstances, and then only in clear cases either where the court thought that the matter ought to be decided at once or where the injunction was directed at a simple and summary act which could be easily remedied or where the defendant had attempted to steal a march on the plaintiff. Moreover, before granting a mandatory interlocutory injunction, the court had to feel a higher degree of assurance that at the trial it would appear that the injunction had rightly been granted, that being a different and higher standard than was required for a prohibitory injunction.”*** 1. Further, in ***Nation Media Group & 2 Others vs John Harun Mwau* [2014] eKLR,** the same court reiterated that: - ***“It is trite law that for an interlocutory mandatory injunction to issue, an Applicant must demonstrate existence of special circumstances. A different standard higher than that in prohibitory injunction is required before an interlocutory mandatory injunction is granted. Besides existence of exceptional and special circumstances must be demonstrate as we have stated a temporary injunction can only be granted in exceptional and in the clearest of cases.”*** 1. Accordingly, the Applicant bears a heavier burden than that imposed upon an Applicant seeking an ordinary prohibitory injunction. It must demonstrate not only the existence of a *prima facie* case, but also the presence of exceptional circumstances warranting the reversal of acts already undertaken pursuant to the impugned appointment. Further, the court must attain a high degree of assurance, even at this interlocutory stage, that the Applicant is likely to succeed at trial and that the Respondents’ action are plainly unlawful. The foundation of the Applicant's case is set out in the Supporting Affidavit and the documents annexed thereto. 2. The Respondents have, however, vigorously contested each of the Applicant's allegations. Through their respective Replying Affidavits, they maintain that the appointment of the 2nd and 3rd Respondents as Joint Administrators was undertaken strictly in accordance with the Insolvency Act, that the Applicant was genuinely unable to meet its financial obligations, and that the administration process was commenced for the legitimate statutory purposes contemplated under the Act. 3. I have carefully considered the competing positions advanced by the parties and the material presently before the Court. What emerges is that virtually every material aspect of the dispute is contested. The parties disagree on, *inter alia*, the validity and enforceability of the securities underpinning the lending relationship; the legality and effect of the restructuring arrangements; whether the debentures relied upon by the 1st Respondent were validly created and registered; the amount, if any, lawfully owing by the Applicant; the propriety of the interest and penalties charged; whether requisite demands and statutory notices were issued and served; whether the appointment of the Joint Administrators complied with Sections 534 and 537 of the Insolvency Act; and whether the antecedent and subsequent conduct of the administrators has been consistent with the objectives of administration set out under Section 522 of the Act. These issues lie at the core of the dispute and constitute the very questions that the Petition invites the Court to determine. 4. The practical effect of granting Prayer 3 would be to restore control and operation of the Petitioner's bank accounts to its directors, notwithstanding that the appointment of the Joint Administrators remains extant and has not been set aside. Similarly, the grant of Prayer 4 would substantially restrict or suspend the exercise of statutory powers by the Joint Administrators before the Court has had the opportunity to determine the legality of their appointment. In substance, the orders sought would alter rather than preserve the prevailing state of affairs and would, to a considerable extent, determine the central issues raised in the Petition at an interlocutory stage. 5. In my considered view, this is not one of the exceptional and clear cases contemplated in ***Kenya Breweries Ltd & Another v Washington O. Okeya* [2002] eKLR** and ***Nation Media Group & 2 Others v John Harun Mwau* [2014] eKLR** where a mandatory injunction may properly issue before trial. On the contrary, the material before the Court discloses substantial and *bona fide* disputes of fact and law that cannot be resolved on affidavit evidence alone. Determining whether the administration process was lawfully invoked, whether the Applicant is indebted in the amounts claimed, whether the securities relied upon by the 1st Respondent are valid and enforceable, and whether the statutory requirements governing the appointment of administrators were satisfied will require a full examination of the evidence and comprehensive legal argument at the hearing of the Petition. 6. While the Applicant has undoubtedly raised serious and arguable issues, the existence of such issues, without more, does not satisfy the heightened threshold applicable to interlocutory mandatory injunctions. It, however, remains undoubted that the Applicant owes the 1st Respondent, the terms of which remain in contention. At this stage, the Court cannot conclude with the requisite degree of certainty that the appointment of the Joint Administrators was plainly unlawful or that the Applicant's case is so clear as to justify the grant of mandatory relief before trial. Those questions remain matters for final determination upon a full hearing of the Petition, after all the evidence has been properly tested and evaluated. **Whether this court should direct the Applicant and the 1st Respondent to undertake a reconciliation of accounts** 1. The Applicant seeks an order directing it and the 1st Respondent to jointly reconcile the loan accounts for purposes of establishing the correct amount outstanding under the various credit facilities. In particular, the Applicant invites the Court to interrogate the legality and effect of the alleged upfront deduction of “profit” under the facility arrangements, the application of the contractual default penalty of 10% per annum, and thereafter require the parties to file a reconciliation report before the Court. The factual basis for this prayer is set out in the Supporting Affidavit and the annexures thereto. 2. The 1st Respondent opposes the prayer and maintains that the indebtedness is properly ascertainable from the loan documentation and statements already in existence. It contends that the issues raised by the Applicant are disputed matters falling for determination within the substantive proceedings and do not warrant the grant of the orders sought at this interlocutory stage. 3. The 2nd and 3rd Respondents similarly oppose the prayer. They contend that disputes relating to the precise computation of interest, penalties and outstanding indebtedness do not, of themselves, invalidate the appointment of the Joint Administrators. They further aver that a review and verification of the Applicant's financial position falls squarely within the statutory mandate of the administrators and forms part of the administration process contemplated under the Insolvency Act. 4. Having considered the rival positions, I note that there is no dispute that a lending relationship existed between the Applicant and the 1st Respondent over a considerable period. It is also common ground that the Applicant received various credit facilities from the 1st Respondent, beginning with the facility letter dated 10th May, 2013, which facilities were subsequently varied, restructured and enhanced on several occasions. The Applicant does not deny receiving the facilities. Its principal grievance concerns the computation of the alleged indebtedness and the legality of certain charges, profit components, penalties and other sums claimed by the 1st Respondent. 5. I further note that the parties have placed before the Court differing figures regarding the amount allegedly outstanding. The existence of those competing figures demonstrates that there remains a genuine dispute as to the extent of the Applicant's indebtedness, if any. In my view, the determination of the actual sums due is not merely incidental to the dispute between the parties but is an issue that bears directly on the administration process and the future conduct of the parties. 6. Unlike the Applicant's prayers for injunctive relief, however, the request for a reconciliation of accounts does not invite the Court to conclusively determine the merits of the parties' competing claims. Rather, it seeks a transparent accounting process through which the parties may obtain clarity regarding the outstanding financial position. Such a process would serve the interests of all parties and promote the efficient administration of the company. 7. More importantly, the Court cannot overlook the statutory role entrusted to administrators under the Insolvency Act. Section 525 of the Insolvency Act expressly provides that an administrator is an officer of the Court. As officers of the Court, administrators are required to act independently, impartially and in furtherance of the statutory objectives of administration. Their duties are not owed solely to the appointing creditor but extend to the company, its creditors as a whole and the administration process itself. In exercising their functions, they remain subject to the supervisory jurisdiction of the Court. 8. The central objective of administration under Section 522 of the Insolvency Act is the rescue of the company as a going concern where reasonably practicable, or otherwise the achievement of a better outcome for creditors than would be obtained through liquidation. It follows that a proper ascertainment of the company's financial position, including verification of its assets, liabilities and indebtedness, is integral to the discharge of the administrators' statutory mandate. 9. In this regard, I find persuasive the observations of the Court in ***Midland Energy Limited v George Muiruri t/a Leakeys Auctioneers & Another* [2019] eKLR**, where the court emphasized that the administration regime under the Insolvency Act is a corporate rescue mechanism intended to afford distressed companies an opportunity for rehabilitation rather than serve merely as a debt recovery process. A meaningful assessment of the prospects of rescue necessarily presupposes an accurate understanding of the company's financial obligations. 10. Consequently, although I am not persuaded that the Court should itself undertake or supervise a detailed forensic reconciliation of the parties' accounts at this interlocutory stage, I am satisfied that reconciliation ought to be addressed within the administration process. Given their status as officers of the Court and the fiduciary and statutory obligations attaching to their office, the Joint Administrators are under a duty to undertake and examine the Applicant's financial affairs, verify the outstanding indebtedness, consider the concerns raised regarding interest, profit charges, penalties and prepare an objective assessment based on the available records. 11. Such an approach neither prejudges the merits of the Petition nor usurps the statutory functions vested in the Joint Administrators. To the contrary, it facilitates the proper discharge of those functions while ensuring that the Applicant's concerns regarding the state of accounts are addressed in a transparent and accountable manner. 12. Accordingly, I direct that, as part of the ongoing administration process, the Joint Administrators shall undertake and/or facilitate a comprehensive reconciliation and review of the Applicant's accounts and indebtedness, with the participation of both the Applicant and the 1st Respondent where necessary, and shall file in Court, within 30 days, a report setting out their findings regarding the Applicant's financial position and the outstanding indebtedness including to the 1st Respondent. In addition, the report should contain a clear road map on the Administrator’s way forward taking into account whether the company is a going concern and efforts to ensure the continuity in the operations of the business. Such a report shall be without prejudice to the respective parties' positions and shall not constitute a final determination of any issue raised in the Petition. 13. In that regard, prayer 5 succeeds only to the limited extent that the issue of reconciliation shall be addressed through the administration process under the supervision of the Joint Administrators as officers of the Court. **Whether this Petition should be consolidated with Insolvency Cause No. E097 of 2026** 1. The Applicant urges the Court to consolidate the present Petition with Insolvency Cause No. E097 of 2026, contending that both proceedings arise from the appointment of the 2nd and 3rd Respondents as Joint Administrators and that consolidation would facilitate the efficient and concurrent determination of all issues arising therefrom. The Applicant further argues that consolidation would avoid procedural duplication and enable the Court to comprehensively determine the legality of the administration process. 2. The power to consolidate proceedings is discretionary and must be exercised judiciously, having regard to the interests of justice and the overarching objectives of efficient case management. In **Law Society of Kenya v Centre for Human Rights and Democracy & 12 Others (Petition 14 of 2013) [2014] KESC 29 (KLR)*,*** the Supreme Court observed that consolidation is appropriate where matters raise common questions of law or fact, arise out of the same transaction or series of transactions, and where consolidation would promote judicial economy, avoid multiplicity of proceedings and eliminate the risk of inconsistent outcomes. 3. There can be little doubt that the present Petition and Insolvency Cause No. E097 of 2026 are factually connected. The central complaint in the Petition concerns the legality of the appointment of the 2nd and 3rd Respondents as Joint Administrators, while the material before the Court indicates that the impugned appointment was effected through the insolvency proceedings in Insolvency Cause No. E097 of 2026. The two matters therefore appear to arise from the same administration process and may potentially involve overlapping factual and legal questions. 4. However, the existence of a common factual background, without more, does not automatically warrant consolidation. The Court must, in addition, be satisfied that consolidation will facilitate the just, expeditious, proportionate and cost-effective resolution of the disputes before it. It must also be satisfied that such an order will not occasion prejudice to any party, create procedural complications, or unnecessarily delay the determination of either matter. 5. In the present case, a significant difficulty arises from the fact that the Court has not been furnished with the pleadings, proceedings or record in Insolvency Cause No. E097 of 2026. Other than the references made by the parties in their affidavits, there is no material before the Court disclosing the exact nature of the issues pending in that cause, the reliefs sought, the parties thereto, the procedural stage that the matter has reached, or whether any substantive directions or orders have already been issued therein. In the absence of such information, the Court is unable to undertake the necessary comparative analysis required before exercising its discretion to consolidate proceedings. 6. Equally important is the fact that the present Petition is properly before this Court and raises distinct constitutional, statutory and procedural challenges to the appointment of the Joint Administrators. The Court remains fully seized of jurisdiction to determine those questions and to grant such relief as may ultimately be warranted. The Applicant has not demonstrated that the absence of consolidation would hinder the fair and effective determination of the issues raised in this Petition or expose the parties to any real risk of prejudice. 7. Moreover, to order consolidation without sight of the record in Insolvency Cause No. E097 of 2026 would require the Court to proceed on assumptions as to the nature, scope and status of those proceedings. Such an exercise would be speculative and would risk issuing directions that may inadvertently affect proceedings whose procedural posture is unknown to the Court. Judicial discretion must be exercised on the basis of adequate material and not in a factual vacuum. Moreover, it may result in judicial overreach whereby this Court is called upon to exercise jurisdiction over a matter that is properly before another court of concurrent jurisdiction and issue directions touching on another matter. 8. In the circumstances, while the Court accepts that the two matters appear to arise from the same administration process and may involve overlapping issues, there is insufficient material before it to determine whether consolidation would advance or impede the efficient administration of justice. The Court is therefore not persuaded that a proper basis has been laid for the exercise of its discretion in favour of consolidation at this stage. Accordingly, Prayer 6 of the Notice of Motion is declined. 9. For the foregoing reasons, the Notice of Motion dated 8th June, 2026, partially succeeds only to the extent that prayer no 5 is granted. In all other respects, the application is declined. The Administrators shall file a comprehensive report on the joint reconciliation and road map on the operations of the company including the Administrator’s proposed course, within 30 days. 10. Given the nature of the Application, each party shall bear its costs. ***Delivered, Dated and Signed virtually this 6th day of August, 2026*** **RHODA RUTTO** **JUDGE** **Court Assistant: Wabwire**