Iko Metals Europe N.V v Metrotile Roofing Systems Kenya Ltd (Insolvency Petition E002 of 2025) [2026] KEHC 9489 (KLR) (25 June 2026) (Judgment)

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI COMMERCIAL & TAX DIVISION** **INSOLVENCY PETITION NO. E002 OF 2025** **IN THE MATTER OF METROTILE ROOFING SYSTEMS KENYA LIMITED** **AND** **IN THE MATTER OF THE INSOLVENCY ACT, NO. 18 OF 2015** **BETWEEN** **IKO METALS EUROPE N.V.....................................PETITIONER/CREDITOR** **VERSUS** **METROTILE ROOFING SYSTEMS KENYA LTD…..RESPONDENT/DEBTOR** **JUDGMENT** **Introduction** 1. This Judgment is in respect of a liquidation petition dated 4 October 2024, but filed on 14 January 2025 by **IKO Metals Europe N.V.** (“the Petitioner”) against **Metrotile Roofing Systems Kenya Limited** (“the Respondent”) under Sections 384 and 425 of the Insolvency Act, 2015; and Rule 77B of the Insolvency Regulations. 2. The Petitioner seeks an order liquidating the Respondent on the ground that it is unable to pay its debts. It contends that the Respondent is indebted to it in the sum of **EUR 1,267,977.45** arising from unpaid invoices relating to supplies made between 22 June 2012 and 28 March 2015. 3. The Petition is supported by the Verifying Affidavit sworn by **Michel Petitjean** on 4 October 2024. The Petitioner contended that it served a statutory demand upon the Respondent on 20th November 2023 and that the Respondent failed to satisfy the demand, secure the debt, or otherwise compound for it. 4. The Petitioner therefore asserts that the Respondent is unable to pay its debts within the meaning of section 384 of the Insolvency Act. 5. The Respondent opposed the petition through a Preliminary Objection dated 3rd March 2025, a Replying Affidavit sworn by **Anderson Mucangi Njiru** on 26 May 2025, and a Further Affidavit sworn by the same Anderson on 20 April 2026. 6. In its response, the Respondent raised three principal objections. First, that the Petition is statute-barred under section 4(1)(a) of the Limitation of Actions Act. Second, that the alleged debt is genuinely and substantially disputed. Third, that the Petition constitutes an abuse of the insolvency process. 7. The Respondent contended that the Petition is predicated on invoices allegedly issued between 22nd June 2012 and 28th March 2015, yet the present Petition was filed on 14th January 2025, long after the six-year limitation period under section 4 (1) (a) of the Limitation of Actions Act (Cap 22). 8. It is further contended by the Respondent that during the period between 22 June 2012 and 28 March 2015, it remitted a total sum of **EUR 1,431,000** to the Petitioner through cheque, RTGS, and SWIFT transfers and has exhibited in the affidavits, payment confirmations, remittance forms, and transaction records in support thereof. 9. The Petition was canvassed by way of written submissions. The Respondent/Debtor filed submissions dated 7 October 2025, whilst no submissions were filed on behalf of the Petitioner. **Analysis and Determination** 1. Having considered the pleadings, affidavits, and submissions on record, the Court is of the view that the sole issue for determination is whether the Petition is merited. 2. The Respondent, as a preliminary issue, submitted that the Petition is founded upon invoices that fell due between 22nd June 2012 and 28th March 2015 and that the Petition, having been filed on 14th January 2025, is caught by the six-year limitation period prescribed by section 4(1)(a) of the Limitation of Actions Act. 3. The Petition and Verifying Affidavit indeed identify the debt as arising from invoices due between 22nd June 2012 and 28th March 2015. 4. However, the Petitioner relies on documents exhibited in the Supplementary Affidavit to demonstrate continuing acknowledgements of indebtedness. Those documents include minutes of a meeting held on 6th October 2016, minutes of a meeting held on 25th September 2018, and an email dated 5th September 2019 authored by Anderson Njiru. 5. From the record, it is evident that the minutes of 25th September 2018 record an outstanding indebtedness by Metrotile Roofing Systems Kenya Limited of EUR 1,261,644.12 and contain an undertaking that old debts would be paid as soon as financial resources became available. The minutes further bear signatures attributed to Anderson Njiru and John Njenga. 6. Further, the email dated 5th September 2019 states, inter alia: “Hope you are well. Find attached the two properties we want to take care of the debt as discussed. Another Title will be following after the process is over...” 1. Whether these documents ultimately satisfy the requirements of sections 23 and 24 of the Limitation of Actions Act is a matter that would require substantive evaluation of evidence. The Court is unable, at this stage, to conclude that the limitation issue is so plain and obvious as to dispose of the entire petition as a pure point of law. 2. Accordingly, I am not persuaded that the Preliminary Objection succeeds on limitation alone. 3. The second question that is germane is whether the Debt is genuinely and substantially disputed. 4. The applicable principle is settled. Insolvency proceedings are not intended to determine genuinely disputed debts. Where a debt is disputed on substantial and bona fide grounds, the insolvency jurisdiction ought not to be invoked as a substitute for ordinary civil proceedings. 5. In **Universal Hardware Limited v African Safari Club Limited [2013]** **eKLR,** the Court of Appeal held that where a debt is bona fide disputed on substantial grounds, winding-up proceedings are inappropriate and the creditor should pursue the claim through ordinary civil proceedings. 6. Similarly, in **Re Kenya Bus Services Ltd [2006] eKLR**, the High Court emphasized that insolvency proceedings are not a substitute for ordinary civil litigation where complex disputes of fact arise. 7. The test for “genuine and substantial dispute” was discussed in **Flower City Limited v Polytanks & Containers Kenya Limited [2021] KEHC 34 (KLR),** where the Court held that a dispute is genuine when it is raised honestly and in good faith, and substantial when it has real merit and is not frivolous, fanciful, or merely intended to delay payment. 8. The Court in the *Flower City* case (supra) was clear debtor need not prove that it will ultimately succeed, but it must demonstrate a credible basis for disputing the debt. 9. In the present Petition, the debt pleaded is for EUR 1,267,977.45 arising from invoices due between 22nd June 2012 and 28th March 2015. In response, the Respondent exhibited payments amounting to **EUR 1,431,000** remitted to accounts operated by the Petitioner and has provided supporting payment records, SWIFT transfers, RTGS confirmations, and remittance documents. 10. The Court notes that in the Supplementary Affidavit, the Petitioner does not deny that the invoices relied upon by the Respondent were paid. Instead, it expressly states that those invoices have been settled but asserts that they are not the invoices constituting the petition debt. 11. Additionally, as correctly pointed out on the Debtor’s Further Affidavit, the Petitioner’s case is further complicated by the fact that the debt subsequently described in the Supplementary Affidavit does not correspond precisely with the debt pleaded in the Petition and Verifying Affidavit. 12. Whereas the Petition refers to invoices due between 2012 and 2015 and a debt of EUR 1,267,977.45, the schedule introduced in the Supplementary Affidavit includes entries dating back to November 2011 and extending into 2018 and reflects a figure of EUR 1,261,642.12. 13. From the above, it therefore follows that several questions remain unresolved, including: which specific invoices comprise the petition debt; whether the payments exhibited by the Respondent were appropriated towards those invoices; whether any balance remains outstanding; and if so, the exact amount outstanding. 14. These are not matters that can properly be resolved within liquidation proceedings. They require a detailed examination of accounts, invoices, appropriations of payments, and commercial dealings spanning several years. 15. Consequently, in the Court's view, the material on record demonstrates the existence of a serious and bona fide dispute regarding both liability and quantum. 16. A liquidation petition is not a debt collection mechanism. The insolvency jurisdiction is available only where the debt relied upon is clear, due, payable and substantially undisputed. 17. The Court of Appeal in **Matic General Contractors Ltd v Kenya Power & Lighting Co Ltd [2001] eKLR,** cautioned against the use of insolvency proceedings as a means of coercing payment of disputed claims. Makhandia JA in [Universal Hardware Limited v African Safari Club Limited [2013] KECA 507 (KLR)](https://new.kenyalaw.org/akn/ke/judgment/keca/2013/507/eng%402013-06-19), stressing that a winding-up procedure ought not to be used a means of debt collection where a debt is disputed stated as follows: “I have looked at the respondent’s authorities in support of his submissions that the statutory notice and petition were incompetent on account of improper service. Those cases are ***Kenya Cashewnuts Ltd v National Cereals & Produce Board*** (2002) I KLR 652, ***Re Standard*** (2002) 2 EA. 617, ***Matic General Contractors Ltd v Kenya Power & Lighting Company Ltd*** (2001) 2 E.A. 440 and ***Cruisair Ltd v CMCC Aviation Ltd (No.2)*** (1978) KLR 131. What emerges is that those cases are clearly distinguishable from the instant case. In ***Kenya Cashewnuts***, the issue at hand was defects in the content of the statutory demand and failure to effect any service whatsoever. In the ***Re-standard***, the issue before the Judge concerned the validity of the petition as it did not bear the seal of the company and secondly, the verifying affidavit failed to disclose whether the deponent was an officer of the company or had the capacity or authority to swear the same. In ***Matic General Contractors Ltd*** as well as ***Cruisair*** the Court of Appeal dealt with the question of the use of the winding-up procedure as a means of enforcing payment in circumstances where there was already a civil suit between the parties….” 1. Although decided before the enactment of the Insolvency Act, 2015, the principles expressed therein remain relevant and applicable in the present Petition. 2. Further, this Court recalls its decision in [Equity Bank (Kenya) Limited v Neptune Credit Management Ltd [2026] KEHC 3010 (KLR)](https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/3010/eng%402026-02-26), where, while dealing with a substantially similar dispute stated as follows: “Under the [*Companies Act*](https://new.kenyalaw.org/akn/ke/act/2015/17), a winding-up petition is an inappropriate tool for debt collection if the debt is "substantially disputed". The evidence shows a sharp disagreement over the timing of the property sales and whether they fell within the Defendant's mandate.” 1. The evidentiary record before the Court in the present case reveals substantial factual controversies which cannot fairly be resolved summarily within insolvency proceedings. I am, therefore, not satisfied that the Petition debt is sufficiently established for purposes of invoking the drastic remedy of liquidation. 2. The appropriate course is for the parties to ventilate their dispute in ordinary civil proceedings where the issues can be fully tried and determined. 3. Accordingly, the Court finds the present Petition to be unmeritorious. The same is therefore dismissed with costs. The Court therefore issues the following final orders: 4. The Petition dated 4th October 2024 and filed on 14th January 2025 is hereby dismissed. 5. The statutory demand founded upon the disputed debt is set aside. 6. The Petitioner shall be at liberty to pursue any claim it may have through the appropriate civil process. 7. The Petitioner shall bear the costs of the Petition and the Preliminary Objection. 8. It is so ordered. **DATED, SIGNED, AND DELIVERED AT NAIROBI THIS 25TH DAY OF JUNE 2026** **** **HON. MR. JUSTICE MOSES ADO *Judge of the High Court*** **In the Presence of:** *Moses C/A* *.………………for the Petitioner/Creditor* *……………for the Respondent/Debtor*