[2023] KEHC 26754 (KLR)
The court held that while liquidation petitions are not to be used as instruments to pressure debtors into payment, the public interest in this case justified lifting the liquidation order. The court emphasized that once a petitioner seeks liquidation, it is not appropriate to halt the process simply because payment...
Source-derived case information.
- Citation
- [2023] KEHC 26754 (KLR)
- Parties
- Applicant: Salesio Kinyanjui Njagi; Applicant: Gregory Mwaniki Karunga; Applicant: Alisa Njeri; Applicant: Jackleah Wangari; Applicant: Nyaga Nthia; Applicant: Alice Kageni Ndwiga; Applicant: Emmaculate Wanjiru Marigu; Applicant: Juliet Muthoni Nthiga; Applicant: Vanessa Kambi; Applicant: Nancy Muthoni Kinyua; Respondent: Invesco Assurance Company Limited
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Insolvency Petition E015 of 2019
- Procedural Posture
- Insolvency Petition / Ruling on Application to Set Aside Liquidation Order
- Outcome
- Liquidation order lifted; Official Receiver discharged; matter settled and file closed.
- Judges
- A Mabeya
- Legal Topics
- Company Liquidation, Consent Orders, Public Interest in Liquidation, Insolvency Procedure
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Salesio Kinyanjui Njagi
Applicant
Gregory Mwaniki Karunga
Applicant
Alisa Njeri
Applicant
Jackleah Wangari
Applicant
Nyaga Nthia
Applicant
Alice Kageni Ndwiga
Applicant
Emmaculate Wanjiru Marigu
Applicant
Juliet Muthoni Nthiga
Applicant
Vanessa Kambi
Applicant
Nancy Muthoni Kinyua
Applicant
Invesco Assurance Company Limited
Respondent
Procedural Posture
Insolvency Petition / Ruling on Application to Set Aside Liquidation Order
Legal Issues
- 1 Whether the liquidation order against the respondent company should be set aside following a consent between the parties.
- 2 Whether liquidation petitions may be used as leverage to compel payment from debtor companies.
- 3 Whether public interest considerations justify lifting the liquidation order.
Ratio Decidendi
The court held that while liquidation petitions are not to be used as instruments to pressure debtors into payment, the public interest in this case justified lifting the liquidation order. The court emphasized that once a petitioner seeks liquidation, it is not appropriate to halt the process simply because payment has been received. However, considering the circumstances, including the settlement between the parties and the company's compliance with payment arrangements, the court found it appropriate to reverse the liquidation order. The Official Receiver was discharged as liquidator, and the company's premises were to be returned to its directors. The matter was marked as settled and...
Court Disposition
Liquidation order lifted; Official Receiver discharged; matter settled and file closed.
Orders
- The liquidation order of 18/10/2023 is lifted.
- The Official Receiver is discharged from duties as liquidator of the company forthwith.
Full Case Text
Judgment text and source record
40 paragraphs
Njagi & 9 others v Invesco Assurance Company Limited (Insolvency Petition E015 of 2019) [2023] KEHC 26754 (KLR) (Commercial and Tax) (21 December 2023) (Ruling)
Neutral citation: [2023] KEHC 26754 (KLR)
Republic of Kenya
In the High Court at Nairobi (Milimani Commercial Courts)
Commercial and Tax
Insolvency Petition E015 of 2019
A Mabeya, J
December 21, 2023
Between
Salesio Kinyanjui Njagi
1st Petitioner
Gregory Mwaniki Karunga
2nd Petitioner
Alisa Njeri
3rd Petitioner
Jackleah Wangari
4th Petitioner
Nyaga Nthia
5th Petitioner
Alice Kageni Ndwiga
6th Petitioner
Emmaculate Wanjiru Marigu
7th Petitioner
Juliet Muthoni Nthiga
8th Petitioner
Vanessa Kambi
9th Petitioner
Nancy Muthoni Kinyua
10th Petitioner
and
Invesco Assurance Company Limited
Respondent
Ruling
1. Before me is a Consent dated 11/12/2023 by the parties. They seek to set aside the Liquidation Order made on 18/10/2023 that took effect on or about 31/10/2023 when the Company defaulted on a Consent Order of 18/10/2023.
2. The grounds for that Consent is that the Company has since paid the instalments ordered and has entered into an arrangement with the petitioner on how to settle the debt. It was submitted that the parties had entered into a similar consent before the Malindi Court thereby lifting another Liquidation Order made by that Court.
3. I have considered the consent and the representations by Learned Counsel. I point out here that liquidation petitions are not to be used to arm twist debtors to pay or settle. Once a petitioner has decided that a debtor Company should be liquidated, it is insensitive for such a petitioner to turn back and say “oh wait a minute, I have received my money back. Hold the process.” That is not available.
4. A Liquidation Petition as is Liquidation Order is serious business. Advertising any of the same has serious consequences to the debtor Company. In public interest, a company that should go under in all fairness it should be left to go rather than be left to sink deeper into debt.
5. In the present case, I have considered that it is in the public interest that I reverse the Liquidation Order. However, the same will not be in terms of the consent. I hereby lift the Liquidation order of 18/10/2023. I discharge the Official Receiver from his duties as a liquidator of the Company forthwith and require him to surrender back the premises of the Company to its directors.
6. The matter is marked as settled and file closed.It is so ordered.
DATED AND DELIVERED AT NAIROBI THIS 21ST DAY OF DECEMBER, 2023. A. MABEYA, FCI ArbJUDGE