https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1716

Muthooko v General Plastic Ltd & another (Employment and Labour Relations Miscellaneous E281 of 2025) [2026] KEELRC 1716 (KLR) (23 June 2026) (Ruling) Neutral citation: [2026] KEELRC 1716 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nairobi Employment and Labour Relations Miscellaneous E281 of 2025 HS Wasilwa, J June 23, 2026 Between Januaries Maingi Muthooko Applicant and General Plastic Limited 1st Respondent Directorate Of Occupational Health And Safety Services 2nd Respondent Ruling 1.In opposition to the Applicant’s application dated 5th August 2025, the 1st Respondent filed a Notice of Preliminary Objection dated 9th October 2025 on grounds that:The Claimant’s continuation of legal proceedings especially the hearing of the application filed against the Respondent is hopelessly misconceived, totally devoid of merit and mala fides for the reason inter alia, that legal proceedings began or continued against the Respondent (being a Company under Administration per Gazette Notice No. 931 - extended by a Court Order) are prohibited under the provisions of the Insolvency Act, No. 18 of 2015 Laws of Kenya. 1st Respondent’s Submissions 2.The 1st Respondent's submitted that the Insolvency Act, 2015 prohibits the commencement or continuation of cases against a company under administration, and that this Court lacks jurisdiction to issue the orders sought, as the prayers contravene Section 560 of the Act. 3.The 1st Respondent submitted that Section 560(1)(d) of the Insolvency Act, 2015 provides that while a company is under administration, a person may begin or continue legal proceedings against the company or its property only with the consent of the administrator or with the approval of the Court. It was further submitted that Section 2 of the Insolvency Act, 2015 defines "the Court" to mean the High Court, and if there is an insolvency division of that Court, means that division. 4.The 1st Respondent argued that the Claimant has not exhausted the first option of seeking the consent of the administrator to proceed with the suit, and that no proof of any such request has been filed. It was submitted that despite this failure, and despite the filing of Grounds of Opposition, the Claimant proceeded to file the present application seeking the court's approval for continuation of the suit. 5.In support thereof, it relied on Lelopa Ole Parsaurei v County Land Registrar & 13 others [2019] eKLR, where Justice Christine Ochieng, dealing with whether the ELC Court had jurisdiction to entertain a suit against a company under receivership, held that: “I note that the Plaintiff had not sought leave to commence the suit against the 5th Defendant as envisaged by the provisions of the Insolvency Act and actually filed an application after the Preliminary Objection was raised by the 5th Defendant. I further note that the Insolvency Act refers to the Court as a High Court. From a reading of section 13 of the ELC Act that confers jurisdiction to the Environment and Land Court., I find that indeed the said Court does not have jurisdiction to grant leave to a party seeking to institute proceedings against a company in receivership. In associating myself with decision of Nyarangi JA in The Owners of Motor Vessel “Lillian S” vs. Caltex Oil Kenya Limited (1989) KLR 1, where he clearly established the law on jurisdiction and held as follows: “Jurisdiction is everything. Without it, a Court has no power to make one more step…. Further, in the case of Fredrick Okoth Owino V TSS Grain Millers (2017) eKLR, Onesmus Makau with approval cited the case of Samuel Kamau Macharia & Another Vs Kenya Commercial Bank Ltd & 2 others (2012) eKLR where it was held that:’ A court’s jurisdiction flows from either the Constitution or legislation or both. Thus a court of law can only exercise jurisdiction as conferred by the Constitution or other written law. It cannot arrogate to itself jurisdiction exceeding that which is conferred upon it by the law. “ 6.It is the 1st Respondent's submission that all matters of administration, including the subject matter of the present application, are purely within the jurisdiction of the High Court- Commercial Division, therefore, the Employment and Labour Relations Court does not have jurisdiction to grant the orders sought against a company under administration. 7.On the objectives of administration, the 1st Respondent submitted that the present application and suit negate the objectives of administration. It relied on In re Hi-Plast Limited [2020] eKLR , which cited AIB Capital Markets PLC & Anor vs Atlantic Computer Systems PLC & Others (1990) EWCA CIV 20:“The making of an administration order triggers the prohibition on proceedings being brought or continued against the Company… the owners of property, and of charges over property are disabled from exercising their proprietary rights unless the Administrator consents or court gives leave.……The Prohibition in Section 11(3) (c) & (d) is intended to assist the Company, under management of the administrator, to achieve the purpose for which administration was made…. The Court has to carry out a balancing exercise, balancing the legitimate interest of the lessor and the legitimate interest of other Creditors of the Company…..” 8.It was submitted that the administration should be allowed to achieve its purpose as provided by law, as the stay is only temporary. Applicant’s Submissions 9.The Applicant submitted that the preliminary objection does not address any specific provision of law that the suit contravenes, but merely avers in general terms that the suit is "hopelessly misconceived, totally devoid of merit and mala fides." The Applicant argued that the court has not been referred to any provision of law upon which the preliminary objection is anchored, and that the objection calls upon the court to interrogate evidence on whether the 1st Respondent is under administration, which are facts that can only be contested at full hearing. 10.The Applicant further submitted that the 1st Respondent has improperly attached a Gazette notice and a court order in Milimani HCCOMM MISC No. E003 of 2021 within the preliminary objection, yet filed no response in defence, only a memorandum of appearance. 11.It was submitted that it is trite law that documents can only be introduced in court through an affidavit or during examination in chief, and that the manner in which the 1st Respondent has introduced documents within a preliminary objection is foreign in law. The Applicant relied on Achiando v Domo & 2 others [2025] KEELC 798 (KLR), where the court observed that: “ A preliminary objection is a point of argument between parties that is grounded solely on the law…... Pleadings though a skeleton of a party’s case or defence form an important ingredient of his case. In their state they suffice for anyone to understand the genesis of a dispute. A Preliminary Objection therefore does not touch on any (other) facts at all than are pleaded, otherwise it would go to the merits of the dispute.” 12.On the test for a pure point of law, the Applicant relied on Mukhisa Biscuit Manufacturing Co Limited v West End Distributors Limited [1969] EA 696, and further on Susan Wairimu Ndiangui V Pauline W. Thuo & Another [2005] eKLR:“a preliminary objection should not be drawn in a manner that is vague and non-disclosing of the point of law or issue that is intended to be raised. It should clearly inform both the court and the other party or parties in sufficient details what to expect.” 13.It was further submitted that at this preliminary stage the court is unable to ascertain that the 1st Respondent is under administration within the meaning of the Insolvency Act, particularly since no defence was filed on behalf of the 1st Respondent. The Applicant relied on Kuria & 27 others v Mott & 12 others [2024] KEELC 4220 (KLR), where the court restated: “It is clear that a Preliminary Objection arises on a point of law only. The Court needs only to examine the pleadings and compare the issues raised therein with the law in issue and make a finding as to whether the failure to comply with what the law requires or provides is so fundamental that it goes to the root of the claim, defence, petition or plaint. This is what this Court will do in regard to the objection raised.” 14.The Applicant submitted that the preliminary objection does not meet the legal test as known in law, that no pure points of law have been raised, and urged the Court to dismiss the preliminary objection with costs. 15.I have considered the averments and submissions of the parties herein. The main argument by the applicant is that despite the knowledge by the claimants that the 1st respondent is undergoing insolvency proceedings they are progressing to argue the application dated 5th August 2025. 16.The applicants attached a gazette notice no 931 extended by a court order which shows that General Plastics Ltd are undergoing insolvency proceedings with effect from 14th January 2020. 17.The respondents claimants have not denied this fact only arguing that the respondents have not filed any responses to their application. 18.On relying on authorities cited and in Particular AIB Capital Markets PC & Another vs Atlantic Computer Systems Plc & Others (1990) EWCA CIV 20 which held that administrative procedures triggers the prohibition on proceedings being brought or continued against the company, I make a finding that this application cannot progress at this point. 19.This being the established principle in law, it is indeed true that the claimant applicants have no business continuing to execute against a company under receivership without following the law. I do find the preliminary objection merited, is allowed and an order issued staying these proceedings accordingly until further orders of this court. There shall be no order of costs. DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 23RD DAY OF JUNE, 2026.HELLEN WASILWAJUDGE