[2012] KEHC 278 (KLR)

[2012] KEHC 278 (KLR)

The court held that winding up proceedings are statutory in nature and fall within the exclusive jurisdiction of the High Court as provided by the Companies Act. An arbitration clause in the articles of association cannot override statutory provisions or oust the court's jurisdiction in such matters. Clause 28 of the company's articles, while providing for arbitration of certain disputes, does not extend to winding up petitions, which are not arbitrable. The court found that the arbitration clause was intended to protect the interests of the company as against those of members, not to resolve disputes between members inter se or to cover statutory winding up proceedings. As such, the...

Citation
[2012] KEHC 278 (KLR)
Parties
Applicant: Kangawana Investments Company Limited; Petitioner: Cecilia Wacuka Nganga
Court
High Court
Court Station
High Court at Nairobi (Milimani Law Courts)
Jurisdiction
Kenya
Judgment Date
30 November 2012
Case Number
Winding Up Cause 18 of 2009
Procedural Posture
Winding Up Cause / Ruling on Application for Stay of Proceedings Pending Arbitration
Outcome
application dismissed with costs
Judges
GV Odunga
Legal Topics
Winding Up Petitions, Arbitration Clauses, Company Articles of Association, Jurisdiction of High Court
Source Language
English
Commercial and Corporate Civil Procedure Winding Up Petitions Arbitration Clauses Company Articles of Association Jurisdiction of High Court

Case Brief

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Parties

Kangawana Investments Company Limited

Applicant

Cecilia Wacuka Nganga

Petitioner

Procedural Posture

Winding Up Cause / Ruling on Application for Stay of Proceedings Pending Arbitration

Legal Issues

  1. 1 Whether winding up proceedings can be stayed in favour of arbitration under an arbitration clause in the company's articles of association.
  2. 2 Whether clause 28 of the articles of association applies to winding up petitions.
  3. 3 Whether the High Court's jurisdiction over winding up proceedings can be ousted by an arbitration agreement.

Ratio Decidendi

The court held that winding up proceedings are statutory in nature and fall within the exclusive jurisdiction of the High Court as provided by the Companies Act. An arbitration clause in the articles of association cannot override statutory provisions or oust the court's jurisdiction in such matters. Clause 28 of the company's articles, while providing for arbitration of certain disputes, does not extend to winding up petitions, which are not arbitrable. The court found that the arbitration clause was intended to protect the interests of the company as against those of members, not to resolve disputes between members inter se or to cover statutory winding up proceedings. As such, the...

Court Disposition

application dismissed with costs

Orders

  • The application dated 25th February 2011 is dismissed with costs to the petitioner.