Cytonn High Yield Solutions LLP v Official Receiver & another (Insolvency Petition E063 of 2021) [2026] KEHC 12995 (KLR) (7 August 2026) (Ruling)

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI COMMERCIAL AND TAX DIVISION INSOLVENCY PETITION NO. E063 OF 2021 CORAM: F. MUGAMBI, J IN THE MATTER OF CYTTON HIGH YIELDS SOLUTIONS (IN LIQUIDATION) CYTONN HIGH YIELD SOLUTIONS LLP ……………. PETITIONER THE OFFICIAL RECEIVER ……………………………. RESPONDENT VERSUS EDWIN HAROLD DANDE ……………..………………… APPLICANT AND RULING ON RECUSSAL Background and Introduction 1. By a Notice of Motion dated 17th July 2026, the Applicant, EDWIN HAROLD DANDE, seeks the recusal of this Court from any further conduct of Insolvency Petition No. E063 of 2021 (In the HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 1 Matter of Cytonn High Yield Solutions LLP, In Liquidation) and of all causes and applications connected therewith or arising therefrom. Beyond the substantive prayer for recusal, the Applicant seeks interim orders and further seeks that the application be placed before the Presiding Judge of the Commercial and Tax Division for directions and hearing on priority. 2. The application is supported by the Applicant's own affidavit and, in addition, by a replying affidavit sworn on 29th July 2026 by PETER WACHIRA on behalf of Alma Apartments Management Company Limited (Alma-Manco), in support of the application for recusal. It is opposed by the Official Receiver, the Creditors' Committee and SBM Bank (Kenya) Limited, through replying affidavits sworn respectively by MARK GAKURU, MICHAEL MUTUA MWINZI and PAUL KAGURU. The Applicant's Case: 3. The Applicant's principal ground concerns the orders made by this Court on 23rd January 2026. He contends that those orders were granted secretly in chambers, following an application that had not HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 2 been uploaded onto the CTS system, and that the orders authorized execution of vesting instruments over properties whose ownership remains contested, without notice to the registered proprietors or other interested parties. He avers that when the cause came up for inter-partes directions barely a week later, on 30th January 2026, no disclosure was made of the orders already issued, and that he only became aware of their existence through separate proceedings before the Environment and Land Court. He further contends that the ruling of 23rd January 2026 proceeded on the basis of what he describes as a non-existent prior ruling. 4. He next takes issue with a ruling delivered on 1st February 2026, by which he contends that the Court set out a criterion for the exclusion of claimants who had converted their investments into apartment units and subplots within the preserved assets, and complains that the interim relief eventually granted was of limited duration and unmatched by any corresponding urgency in fixing the underlying claims for hearing. HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 3 5. The third limb of the application concerns the property known as The Alma, located on L.R. No. Kiambaa/Ruaka/6667. The Applicant contends that although this property is subject only to preservation orders and no vesting order has ever been made in respect of it, the Court has proceeded as though it were vested in the Official Receiver. He further complains of the ruling of 22nd May 2026, by which the Official Receiver was directed to take over management of The Alma and to collect service charge from the homeowners, notwithstanding that the homeowners were neither party to the contempt proceedings from which those orders arose nor afforded a hearing, and notwithstanding that service charge, being a sum contractually due to homeowners for common services, is said to have been improperly treated as an asset available for distribution to creditors. 6. The Applicant further complains of an asserted disparity in case management, contending that applications filed by homeowners have been left undetermined or in abeyance while applications filed by the Official Receiver have consistently HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 4 been accorded priority, in a manner he says offends Article 50 of the Constitution, and points to remarks made by the Court on 22nd May 2026 which he contends a fair-minded observer might perceive as favourable to the Official Receiver. He also complains that the Court has not enforced its own directions of 30th July 2025 requiring the Official Receiver and SBM Bank to engage the developer and homeowners on the verification exercise. 7. Finally, he points to what he characterizes as inconsistent treatment across related matters. Particularly, the stay of the consent recorded in HCCC No. E760 of 2024, contrasted with the refusal to stay a separate consent between SBM Bank and the Official Receiver and to the ruling of 3rd July 2026 in Insolvency Notice E192 of 2025, where the Court recognized the appointment of the Administrator but which he contends had the effect of subordinating a higher-ranking creditor to a lower-ranking one. 8. He discloses that he has separately petitioned the Judicial Service Commission for the removal of the HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 5 Court from office, and maintains that the present application is not intended to derail the insolvency proceedings but to safeguard the fair hearing rights of all concerned. The Affidavit of Alma-Manco: 9. In support of the application, PETER WACHIRA swore a replying affidavit on behalf of Alma-Manco, in which he avers that the question confronting the homeowners is whether, having regard to the cumulative conduct of the proceedings and their practical consequences, they can reasonably retain confidence that the remaining matters will be determined impartially. He takes particular issue with the order of 22nd May 2026 directing the Official Receiver to assume management of The Alma before the verification exercise had been completed, and in circumstances where the homeowners were neither represented in the underlying contempt proceedings nor were such orders sought against them. 10. He asserts that the homeowners' own applications have remained pending since as far back as 2023, and maintains that the homeowners have no HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 6 interest in delaying the liquidation but seek only a fair and orderly determination of their rights before a Court whose impartiality is not in question. On this footing, Alma-Manco associates itself with the Notice of Motion and joins in the prayer for recusal and reassignment of the cause. The Respondents' Opposition: 11. The Respondents' joint position, is that the application amounts to an abuse of the process of the Court, being in substance an attempt by the Applicant to relitigate findings that have gone against him and the Cytonn entities, by recasting adverse rulings as instances of bias rather than pursuing the remedies of appeal or review properly available to him. They draw attention to an earlier recusal application brought by the Applicant against Justice Mabeya in 2024, which was heard and dismissed, as demonstrating a recurring pattern of seeking to disengage successive judicial officers whenever rulings prove unfavourable to his interests. 12. The Respondents maintain, first, that the orders of 23rd January 2026 did no more than give effect to HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 7 the vesting orders that had already been made on 22nd November 2024, with which the Applicant had failed to comply. Second, they contend that the ex parte procedure that was followed by the Official Receiver is an ordinary and lawful process, one which the Applicant himself has repeatedly invoked in the course of these proceedings. Third, they explain that the temporary inability of the CTS system to accommodate further filings, which necessitated filing by email, was a matter disclosed to the Court and cannot properly be equated with secrecy. 13. They contend that the treatment of note- conversions and the management of The Alma arose from considered determinations on contested questions which remain amenable to appeal, which remedy the Applicant has in fact invoked through a pending Rule 5(2)(b) application before the Court of Appeal. They deny any disparity in case management by the Court, pointing to the consolidation of an upwards of 20 pending applications, including those of homeowners, for determination on 22nd May 2026. As to the stayed consent in HCCC E760 of 2024, HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 8 they aver that the stay followed a properly filed application to set it aside, which remains pending. 14. They characterize the pending JSC petition as, without more, incapable of establishing bias, noting that a like complaint against Hon. Justice Mabeya was ultimately dismissed by the Commission. They warn that the grant of the sweeping interim orders sought would freeze the entire insolvency process to the detriment of the general body of creditors and homeowners in a cause already more than 5 years old, and urge the Court to dismiss the application with costs. Analysis and Determination 15. Having considered the application, the responses, the rejoinder and the submissions of the parties, the singular question for determination is whether the Applicant has made out a case for the recusal sought. The principles governing recusal are well settled and need only brief restatement. The test is objective; whether a reasonable and fully informed observer, apprised of all the relevant circumstances and viewing the matter in its proper context, would apprehend a real possibility of bias. Recusal is not to be invoked lightly. It carries direct HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 9 consequences for the administration of justice, and a judicial officer ought not to withdraw from a matter merely as a matter of convenience or in response to every suggestion of partiality. As has been observed, this high threshold exists precisely to guard against the judicial process being manipulated by litigants who might otherwise raise recusal as a device to secure a more favourable forum. 16. The New Zealand Supreme Court in Saxmere Company Ltd V Wool Board Disestablishment Company Ltd, [2009] NZSC 72, [2010] 1 NZLR 35 formulated the applicable inquiry as one of “real and not remote possibility of bias, to be tested in two stages. First, whether the circumstances relied upon might reasonably lead a fully informed observer to apprehend that the judge could decide the matter otherwise than on its merits and second, whether there exists a logical and sufficient connection between those circumstances and that apprehension. 17. As to the character of the hypothetical observer, Justice Ibrahim in Jasbir Singh Rai & 3 Others V HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 10 Tarlochan Singh Rai & 4 Others, Petition No. 4 of 2012 [2013] eKLR, framed the question as being whether a reasonable and fair-minded person possessed of all the relevant facts, would entertain a reasonable suspicion that a fair trial was not possible and if so, disqualification must follow. 18. The Court of Appeal for England and Wales, in Harb V HRH Prince Abdul Aziz bin Fahd bin Abdul Aziz, [2016] EWCA Civ 556, cautioned against two errors in particular. First, that the opinion of the notional fair-minded observer is not to be equated with that of the litigant, who, being neither dispassionate nor objective, is naturally inclined to resist anything perceived as imperiling his prospects of success, whether or not that perception is objectively well founded. Second, that the fair-minded observer is to be treated as possessed of all relevant circumstances, not merely those in the public domain. 19. This Court's own jurisprudence, and that of the Court of Appeal in Galaxy Paints Co. Ltd V Falcon Guards Ltd, [1999] eKLR, strikes the HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 11 same balance, cautioning that while justice must be seen to be done, judicial officers equally owe a duty to sit, and ought not, by too readily yielding to suggestions of bias, encourage litigants to believe that disqualification is a route to a more sympathetic forum. It is against this settled framework that the grounds advanced by the Applicant fall to be examined. 20. I will deal first with the Applicant's prayer that the recusal application should be placed before the Presiding Judge of the Commercial and Tax Division for directions on how it ought to be determined. No basis has been shown for such a course. It is well established that that a recusal application ought ordinarily to be heard and determined by the very judge against whom the allegation of bias is raised, and not referred to another judicial officer. This is so because it is the judge seized of the matter who is uniquely placed to test the allegations levelled against their own conduct against the whole run of the proceedings, and who alone possesses complete and first-hand knowledge of the matter. HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 12 21. This accords with the broader principle, already restated in this ruling by reference to Jasbir Singh Rai & 3 Others V Tarlochan Singh Rai & 4 Others, (supra) and Galaxy Paints Co. Ltd V Falcon Guards Ltd, (supra), that while a judge must not too readily brush aside a properly raised apprehension of bias, equally a judge owes a duty to sit and to determine matters properly brought before them. I find no proper basis for such an order, and it is accordingly declined. 22. The next issue is the grievance taken by the Applicant against this Court’s orders of 23rd January 2026. The genesis of this accusation is the ruling of 22nd November 2024. The ruling provided in part as follows: “The properties commonly known as the Ridge, Taraji, Miotoni/Applewoods and Mystic shall vest with the Official Receiver for valuation and realization. The Official Receiver shall apply and be issued with provisional titles in respect of the properties herein in the event HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 13 that Cytonn Investments, Edwin Dande or any other Cytonn entity fails to surrender the same within 7 days of these Orders. …” 23. The terms of the ruling of 22nd November 2024 were unambiguous and self-executing. That order was known to the parties, including the Applicant and the Cytonn entities, who in fact pursued an unsuccessful appeal against it. The 7 days allowed for compliance with the order lapsed without the requisite surrender of title documents. It was that default which occasioned the Official Receiver's application dated 20th January 2026 and the consequential orders of 23rd January 2026, which did no more than give effect to orders that had already been validly made. 24. The application by the Official Receiver was placed before the Court by the Deputy Registrar and as the record would confirm, the following orders were made: “1. I have considered the ex parte Notice of Motion application dated 20th HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 14 January 2026 filed under certificate of urgency together with the supporting affidavit thereto. The same is certified urgent. 2. On the strength of the Orders of this Court issued in respect of the preservation and vesting of the properties outlined in prayer 2(a) to (f) and further on the strength of the Orders issued on 6th February on the issuance of titles over the said properties, I allow the application as prayed. The costs of the application shall be in the cause.” 25. The Applicant's contention notwithstanding, no further hearing of the application was warranted in the circumstances, since the substantive application had already been heard and HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 15 determined on its merits. The allegation that the matter was disposed of in secret does not withstand scrutiny. The orders in question were duly published by this Court on the CTS system and were accordingly accessible to all parties and their respective advocates. It was not, in any event, incumbent upon this Court to notify the parties of the orders. That duty to monitor and track the status of a matter, once properly before the Court, rests upon the parties and their legal representatives, and cannot be shifted onto the Court itself. The totality of my analysis is that I do not find that the averments disclose any impropriety, still less bias. 26. On the question of case management and the treatment of applications filed by the homeowners, I am equally unpersuaded that any disparity, still less bias, has been demonstrated on the part of this Court. A careful review of the record reveals, to the contrary, a pattern of consistent engagement with the concerns raised by the homeowners from the very outset. The Court's earliest response to their numerous applications was not one of exclusion or indifference, but of active encouragement toward compromise, HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 16 directing the homeowners to pursue a possible resolution of their claims through the verification exercise that was then still being conducted by SBM. 27. That position gave way, in due course, to the directions issued on 30th January 2026, which followed directly in the wake of, and gave full and faithful effect to, the determination of the Court of Appeal. The directions provided that: “8. In accordance with the directions of the Court of Appeal, the applications filed by the homeowners shall remain in abeyance pending completion of the verification and proof of debt exercises. Consequently, no further filings by the homeowners shall be entertained except with leave of the Court, which leave shall be contingent upon confirmation that the applicant has received a response to their HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 17 claim from either SBM or the Official Receiver.” 28. These directions were not made in a vacuum. They reflected, in equal measure this Court's continuing and unrelenting duty to manage a large, complex, and multi-party litigation in an orderly, manner, a duty that lies at the very core of the Court's case management mandate and admits of no abdication. That duty found further and unmistakable expression in the directions of 22nd May 2026, issued upon confirmation by SBM that a report of the verification exercise had been duly filed. 29. Acting in furtherance of the orderly disposal of the numerous applications, the Court took active and deliberate steps to prepare a total of 20 applications for determination. In this regard, the Court had occasion to observe as follows: “There are several applications that were filed prior to the commencement of the verification exercise. It has been observed that some, if not all, HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 18 may have been overtaken by subsequent developments arising from the ongoing verification process. The Court further acknowledges that the pending applications raise cross-cutting issues. Accordingly, the following applications shall be determined on their merits first, while any others shall await the outcome of these determinations so as to save on the Court’s time, ensure consistency and orderly progression.” 30. In order to safeguard the interests of the homeowners against any precipitate or adverse action on the part of SBM, this Court went further still, and issued the following directions, which bear reproducing in full: “The verification process has also generated a significant number of applications from interested parties, including homeowners and investors. Some of these HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 19 applications have already received directions. I am further mindful of the scheduled auction of the Alma on 11th June 2026. However, in order to allow the Court sufficient time to determine the applications already filed, the said auction shall be postponed for a period of sixty (60) days from 21st May 2026, in line with the directions issued in HCCC E760 of 2024. SBM shall in this period continue with the outstanding portion of the verification.” 31. Contrary to the assertions advanced by the Applicants, the record, properly examined, discloses not indifference but sustained and continuous engagement with the position of the homeowners throughout these proceedings. It is trite, and bears restating, that a mere difference of view as to case management strategy, without more, cannot found an inference of bias. Were it otherwise, every exercise of judicial discretion in HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 20 the management of cases would be vulnerable to challenge simply because a party disagreed with the course adopted, a proposition this Court is not prepared to countenance. Nor can the guidance given in the directions of 1st February 2026 be read, as the Applicants would have it, as evidence of exclusion or bias against parties who were home owners by virtue of conversion. In those directions, this Court stated as follows: “I refer to the finding of the Court of Appeal [upholding this court] at paragraphs 28 to 30 where the Court noted. … To establish this, they must present, at a minimum, their sale agreements, indicate the purchase price, evidence of payment of the purchase price and details of the recipient of such payment together with any further documents that the liquidator may require. In essence, while the formal requirements may differ, the HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 21 obligation to furnish proof remains indispensable.” 32. Properly understood, that guidance did no more than restate the Court of Appeal's own findings, by which this Court remains bound. It was not, as suggested, a pronouncement on the circumstances of the homeowners, which is still an issue that this Court is yet to engage with. 33. As regards the assertion that the Court ordered the management of The Alma to be assumed by the Official Receiver in proceedings where no such order had properly been sought, the record shows that the same was a live issue before the Court. It was not an extraneous matter conjured by the Court of its own motion and the following observation made within the ruling confirms that: “The Official Receiver averred that, notwithstanding the appointment of M/s Muigai Commercial Agencies to manage the suit property on its behalf, the 1st respondent and his agents had continued to interfere HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 22 with the Official Receiver’s exercise of powers over the suit property. … The respondents further deny any interference with The Alma. They maintain that neither has collected rent, managed, or otherwise dealt with the property contrary to the Court’s orders. They emphasize that Alma Management Company Ltd, duly constituted by the 306 homeowners pursuant to their sub-leases, remains the lawful management entity, and no order has displaced its role. They add that the 1st respondent is merely a homeowner with no involvement in management, and that the residents themselves have raised concerns about accountability following the appointment of Muigai Commercial Agencies Limited.” HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 23 34. It was in that context that this Court found, for the sake of finality, that the communication issued by the homeowners' committee was inconsistent with the subsisting preservation and vesting orders and amounted to a calculated attempt to mislead residents into disregarding the Court's authority. This was not a novel question. The issue had already been settled by the Court of Appeal, which upheld this Court's position in Musembi & 7 Oothers V Official Receiver & 2 Others, [2025] KECA 1931 (KLR). The Court of Appeal stated as follows: “We agree that the issuance of preservation and vesting orders are aligned with the liquidator’s statutory duty to gather, manage and distribute the insolvent estate in a manner that ensures equitable treatment of all creditors. The management of assets necessarily requires that the liquidators take over the activities of the property in question so as to ensure that it is managed in the best interest of HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 24 all the creditors. We do not agree that the liquidator’s duty is to simply preserve the legal status of the property but that he cannot take over the management of the business being undertaken therein. To do so would mean that the assets under liquidation would not be fully under the control and management of the liquidator. This is in line with section 444 of the Act.” 35. It bears noting that the present difficulties of water and electricity supply at The Alma, regrettable and unfortunate as they undoubtedly are for the residents affected, cannot be elevated into a ground for recusal. The directions of 17th July 2026 expressly required the Official Receiver to ensure that management of The Alma continues in an efficient manner, in meaningful and ongoing consultation with both the homeowners and SBM Bank and for the Official Receiver to update the Court on the same. HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 25 36. With respect to the treatment of matters brought before the Court, namely the stay of the consent in HCCC No. E760 of 2024 as against the refusal to stay the separate consent between SBM Bank and the Official Receiver, as well as the ruling in Insolvency Notice E192 of 2025, these are, in substance, complaints as to the correctness of decisions that this Court has made. The decisions remain subject to challenge by way of appeal or review. I reiterate my position that disagreement with a judicial determination is not a ground for recusal. 37. Having weighed the totality of the evidence and submissions placed before me, and applying the test that governs an application of this nature, I return to the question that must, in the end, be asked: would a reasonable, objective and fully informed observer, one apprised not of fragments or impressions, but of the correct and complete facts, reasonably apprehend that this Court has failed, or will fail, to bring an impartial mind to the adjudication of this cause? Having subjected the record to that exacting standard, my answer is no. HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 26 A judicial officer does not lightly abandon a cause entrusted to them, nor does the law countenance recusal as a refuge from the ordinary rigours of litigation. Finding, as I do, no proper or principled basis upon which to recuse myself, I decline to do so and shall proceed with the conduct of this matter. Disposition 38. Accordingly, the Notice of Motion dated 17th July 2026 is dismissed with costs. DATED, SIGNED AND DELIVERED IN NAIROBI THIS 7 TH DAY OF AUGUST 2026. F. MUGAMBI JUDGE HCCOMM IP NO. E063 OF 2021 RECUSSAL RULING Page 27