https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6996

Obuyaff v Invesco Assurance Company Limited (Under Statutory Management) & 3 others (Miscellaneous Civil Application E041 of 2025) [2026] KEHC 6996 (KLR) (22 May 2026) (Ruling) Neutral citation: [2026] KEHC 6996 (KLR) Republic of Kenya In the High Court at Siaya Miscellaneous Civil Application E041 of 2025 DK Kemei, J May 22, 2026 Between Rose Ambiyo Obuyaff Applicant and Invesco Assurance Company Limited (Under Statutory Management) 1st Respondent Policyholders Compensation Funds (Statutory Manager of Invesco Assurance Company Limited) 2nd Respondent Insurance Regulatory Authority 3rd Respondent Diana Nduku Mumo (Interim Liquidator) 4th Respondent Ruling 1.The Applicant herein filed an amended application dated 25/2/2026 seeking for the following reliefs:i)That leave be and is hereby granted to the Applicant to continue with the proceedings in Bondo SRMCC No. E040 of 2025- Rose Ambiyo Obuyaf Vs Invesco Assurance Company Ltd (under statutory management of the Policyholders Compensation Fund), notwithstanding that the 1st Respondent was under statutory management at the time of filing.ii)That the suit filed on 28/7/2025 be deemed as properly instituted with leave of this Honourable court.iii)That all further pleadings and processes in the said suit be served upon the 4th Respondent being the duly appointed statutory manager of the 1st Respondent pursuant to the Public Notice dated 14/8/2024 issued by the 3rd Respondent and the ruling dated 3/7/2025 in Invesco Assurance Company Limited (Under Statutory Management) (Insolvency Petition E115 of 2019 & E087 of 2024 (Consolidated) (2025) KEHC 12659 (KLR) Commercial & Tax) (31st July 2025).iv)That the costs of the application be in the cause. 2.The application is supported by the grounds set out thereunder and the supporting affidavit of the Applicant sworn on even date. The Applicant’s gravamen is inter alia; that under section 67C (10) of the Insurance Act, no legal proceedings shall be commenced or continued against an insurer under statutory management except with the leave of the court; that the Applicant filed in Bondo SRMCC No. E040 of 2025 seeking declaratory relief under section 10 of the Insurance (Motor Vehicles Third Party Risks) Act, cap 405 to compel indemnity in Bondo PMCC No. 20 of 2018 - Rose Ambiyo Obunaff Vs Kyaka Sonye; that at the time of filing, the Applicant was unaware that the 1st Respondent had been placed under statutory management by the 3rd Respondent on 14/8/2024 and that the 2nd Respondent had been appointed statutory manager; that the Applicant became aware of the statutory management on 1/9/2025 when the 1st Respondent’s representative availed to the process server a copy of the said Public Notice dated 14/8/2024 during service of summons in the Bondo suit; that the failure to seek leave prior to filing of the Bondo suit was inadvertent and occasioned solely by the lack of knowledge of the insurer’s status; that no prejudice will be occasioned to the Respondents if this court grants leave whereas refusal would defeat the Applicant’s statutory right to indemnity; that it is in the interest of justice, fairness and overriding objectives of this court that the orders be granted. 3.The 3rd Respondent herein filed a notice of preliminary objection dated 10/3/2026 seeking the following orders:1.That this Honourable Court is divested of jurisdiction under the law to entertain, interrogate and/or determine this suit as the same is statutorily barred, the substratum thereof having been filed absent the approval anticipated by Section 432(2) of the Insolvency Act Cap 53 of the Laws of Kenya following the issuance of an interim liquidation order issued in HCCOMMIP/E087/2024- In the matter of Invesco Assurance Company Limited (1st Respondent) (Interim Liquidation orders issued 31st July 2025).2.That the prayers sought by the Petitioner seek to disparage the liquidation processes being undertaken by the Court appointed Interim Liquidator as provided for under Section 432 (3) of the Insolvency Act that provides thus:"An order for liquidating a company operates in favour of all the creditors and of all contributories of the company as if made on the joint application of all of them."3.That the prayers sought by the Applicant undermine the order of hierarchy of payment of creditors of a Company placed under liquidation as provided for under Schedule 2 of the Insolvency Act, Cap 53 of the Laws of Kenya.4.That the Application offends the doctrine of privity of contract as the issues raised therein arise from private insurance contracts where the 3rd Respondent is neither a party to nor was it privy to the agreements between the parties to the insurance contract.5.The Application offends the doctrine of exhaustion of dispute resolution mechanisms against the 1st Respondent espoused in Section 204A of the Insurance Act and Section 9(2) of the Fair Administrative Actions Act as the Application did not explore the administrative intervention and dispute resolution powers of the 3rd Respondent by lodging a complaint against the 1st Respondent. This Honourable Court therefore lacks jurisdiction to hear the case against the 3rd Respondent in view of the doctrine of exhaustion of dispute resolution mechanisms.6.That the Applicant has failed to specifically outline and demonstrate its claim against the 3rd Respondent and therefore failed to meet the threshold for specificity in drafting as elucidated by the principles in the case of Anarita Karimi Njeru v Republic (1979) 1KLR 154 reiterated in the Court of Appeal in the case of Mumo Matemu v Trusted Society of Human Rights Alliance, Civil Appeal No. 290 of 2012 in the following manner:i.The Application fails to plead with specificity the manner in which the alleged actions or omissions of the 3rd Respondent have infringed on the rights of the Petitioner.ii.The Applicant in its Application fails to take into consideration the provisions of the Insurance Act CAP 487 of the Laws of Kenya which provide for enforcement thereby calling this Honourable Court to undertake an academic exercise.iii.The allegations raised by the Petitioner in its Petition imply that there was an alleged failure in the 3rd Respondent’s regulatory duties without providing evidence of probative value.7.That further to the foregoing, the Application has failed to meet the basic requirements as to form as set out in Rule 10 and 11(2) of the Mutunga Rules Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules, 2013.8.The suit is therefore bad in law and an abuse of the process of court and therefore a proper candidate for striking out and/or dismissal forthwith, even suo moto. 4.The said preliminary objection was canvassed by way of written submissions. Both parties duly complied. 5.It was submitted by learned counsel for the 3rd Respondent that the Applicant's position that the insurer failed to settle the decretal amount and she filed a declaratory suit in Bondo SRMCC No.40 of 2025 - Rose Ambiyo Ombuyaf -vs- Invesco Assurance Company Limited (Under Interim Liquidation) and therefore now seeks to have the 1st Respondent (who is no longer under Statutory Management and has since been placed under interim liquidation) be compelled to settle the decree is misplaced in many respects.Noteworthy, the Honourable Justice Gikonyo in Milimani Insolvency Petition No. E087 of 2024 - Commissioner of Insurance -vs- Invesco Assurance Respondent is already before Milimani Insolvency Petition No. E087 of 2024 - Commissioner of Insurance -vs- Invesco Assurance Company Limited which as a matter of procedure, is best placed to determine whether or not to grant the sought. IT was the view of counsel that the Applicant should have lodged her application in Milimani court where the other matter has been filed. That the reason for the foregoing is that the Court in Milimani Insolvency Petition No. E087 of 2024 - Commissioner of Insurance -vs- Invesco Assurance Company Limited has had the opportunity to interact with the Petition and the realities faced by the 1st Respondent and it therefore appreciates the status of the 1st Respondent. That even though this Honourable Court enjoys the same status as the Court in Milimani Insolvency Petition No. E087 of 2024 - Commissioner of Insurance -vs- Invesco Assurance Company Limited, it is the 3rd Respondent's submission that the interests of the Applicant shall be best secured before the Court seized with the insolvency Petition. That to give the foregoing position a better perspective, Honourable Justice Moses Ado in Milimani Insolvency Petition No. E083 of 2024 - Commissioner of Insurance -vs- Xplico Insurance Company Limited pronounced himself on 19th March, 2026 and issued final liquidation orders against Xplico Insurance Company Limited (in liquidation). Notably, various policyholders and third parties made similar numerous Notices of Motion Application before the said Court. It was thus the 3rd Respondent's submission that the instant Notice of Motion Application has not been filed before the proper forum and that the same ought to be dismissed. It was finally submitted that in any event, the sole goal of seeking leave is to enable the Applicant to proceed with the matter to protect its interests. It is therefore only prudent to file the said Notice of Motion Application before the proper forum to give the Applicant an opportunity to secure justice within the shortest time. Hence, it was submitted that on this ground alone, the instant Amended Notice of Motion Application deserves to be dismissed in the first instance. 6.As regards the issue of privity of contract, the 3rd Respondent submits that the Amended Notice of Motion Application offends the well-established doctrine of privity of contract. That the Applicant has not disclosed any cause of action that would warrant the participation of the 3rd Respondent in these proceedings since the 3rd Respondent was neither a party to the insurance contract, nor has its regulatory mandate been challenged. That the reliefs sought in the instant Application would still be sought even without the participation of the 3rd Respondent. It was contended that the doctrine of privity of contract dictates that only parties that actually negotiated a contract (who are privy to it) are entitled to enforce its terms. That the 3rd Respondent only discharged its mandate under Section 67C(2)(i) of the Insurance Act by placing the 1st Respondent under Statutory Management which has not been challenged. Learned counsel finally urged that the Amended Notice of Motion Application be struck out and the 3rd Respondent's Notice of Preliminary Objection be upheld. 7.Learned counsel for the Applicant submitted on all the grounds of the preliminary objection raised by the 3rd Respondent. 8.As regards the 3rd Respondent’s objection that the court is divested of jurisdiction by dint of section 432 (2) of the Insolvency Act. It was contended that the objection as framed does not meet the threshold of a proper preliminary objection and is therefore incompetent. That it is settled law that a preliminary objection must raise a pure point of law, argued on the assumption that all pleaded facts are correct, and must not invite the Court to ascertain facts or exercise discretion. This principle was authoritatively stated in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696 and reaffirmed in Oraro v Mbaja [2005] eKLR. That in the present matter, the issue raised by the 3rd Respondent-whether leave of the Court was obtained, whether such leave was required in the circumstances, and whether the proceedings can be regularized- necessarily calls for factual inquiry and the exercise of judicial discretion which are not pure points of law capable of disposal at the preliminary stage and hence, on this ground alone, the objection is incompetent.Further, on the issue of jurisdiction, it was submitted that the 3rd Respondent's contention on jurisdiction is equally unsustainable in that while it is trite that jurisdiction is everything, as stated in Owners of the Motor Vessel "Lillian S" v Caltex Oil (Kenya) Ltd [1989] KLR 1, the issue before this Court must be whether the objection truly raises a question of jurisdiction. It was submitted that the 3rd Respondent has fundamentally mischaracterized the nature and effect of Section 432(2) of the Insolvency Act yet the said provision does not oust or divest the jurisdiction of this Honourable Court but rather, it expressly provides that:"legal proceedings against the company may be begun or continued only with the approval of the Court and subject to such conditions as the Court may impose."It was submitted that this provision does not take away jurisdiction-it affirms it as it vests the Court with supervisory authority over proceedings involving a company under liquidation and grants the Court discretion to allow such proceedings to continue. Further, this Honourable Court is constitutionally vested with original jurisdiction under Article 165(3)(a) of the Constitution, which jurisdiction cannot be ousted except by express statutory provision. As affirmed by the Supreme Court in Samuel Kamau Macharia & another v Kenya Commercial Bank & 2 Others, jurisdiction flows from the Constitution and statute and cannot be limited by implication. That in the present case, there is no statutory provision that divests this Court of jurisdiction to hear an application for leave. On the contrary, the statutory framework expressly requires that such leave be sought from this Court and that it is precisely for this reason that the Applicant has approached this Honourable Court under Section 67C(10) of the Insurance Act Cap 487 Laws Of Kenya, seeking leave to continue with proceedings in Bondo SRMCC No. E040 of 2025 and hence the application is therefore properly before this Court.Further, this Honourable Court is the most appropriate forum within its territorial jurisdiction to determine the application, considering that the underlying suit and declaratory proceedings are both situated within Bondo and fall under this Court's supervisory jurisdiction.It is submitted that the 3rd Respondent has fundamentally mischaracterized the nature and effect of Section 432(2) of the Insolvency Act. The said provision does not oust or divest the jurisdiction of this Honourable Court. Rather, it expressly provides that:“legal proceedings against the company may be begun or continued only with the approval of the Court and subject to such conditions as the Court may impose."This provision does not take away jurisdiction-it affirms it. It vests the Court with supervisory authority over proceedings involving a company under liquidation and grants the Court discretion to allow such proceedings to continue.Further, this Honourable Court is constitutionally vested with original jurisdiction under Article 165(3)(a) of the Constitution, which jurisdiction cannot be ousted except by express statutory provision. As affirmed by the Supreme Court in Samuel Kamau Macharia & another v Kenya Commercial Bank & 2 Others, jurisdiction flows from the Constitution and statute and cannot be limited by implication.In the present case, there is no statutory provision that divests this Court of jurisdiction to hear an application for leave. On the contrary, the statutory framework expressly requires that such leave be sought from this Court.It is precisely for this reason that the Applicant has approached this Honourable Court under Section 67C (10) of the Insurance Act Cap 487 Laws of Kenya, seeking leave to continue with proceedings in Bondo SRMCC No. E040 of 2025. The application is therefore properly before this Court.Further, this Honourable Court is the most appropriate forum within its territorial jurisdiction to determine the application, considering that the underlying suit and declaratory proceedings are both situated within Bondo and fall under this Court's supervisory jurisdiction.Additionally, the existence of interim liquidation proceedings before the High Court at Nairobi does not oust the jurisdiction of this Court. It merely necessitates compliance with the statutory requirement of leave, which is precisely what the Applicant seeks.Finally, it bears emphasizing that the Applicant is already before this Honourable Court seeking leave. The objection that leave has not been obtained is therefore premature and self-defeating, as it seeks to defeat an application whose very purpose is to obtain such leave.Accordingly, paragraph 1 of the Preliminary Objection is misconceived, incompetent, and ought to be rejected. 9.As regards the 3rd Respondent’s objection that no proceedings can be instituted or continued following interim liquidation orders without the approval of the Court, it is contended that the Applicant does not dispute that leave of the Court is required under the applicable statutory framework as that is the very basis upon which the present application is brought. That the Applicant instituted Bondo SRMCC No. E040 of 2025 seeking declaratory relief under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act to compel indemnity arising from Bondo PMCC No. 20 of 2018. That at the time of filing, the Applicant was not aware that the 1st Respondent had been placed under statutory management and that upon becoming aware of that fact, the Applicant promptly approached this Honourable Court to seek leave and to regularize the proceedings and thus the application has been brought in good faith and in full recognition of the statutory framework governing proceedings against an insurer under statutory management. Indeed, section 432(2) of the Insolvency Act does not render proceedings instituted without prior leave a nullity but rather, it subjects such proceedings to the control of the Court, which retains discretion to grant leave and impose such conditions as it deems appropriate. The existence of this discretion demonstrates that the omission to obtain leave at the time of filing is not fatal, but curable. This position accords with the well-established principle that procedural lapses should not defeat substantive justice where they are capable of being cured, as held in Microsoft Corporation v Mitsumi Computer Garage Ltd [2001] eKLR. Further, the remedy sought by the 3rd Respondent-namely, the striking out of the 3rd Respondent from the proceedings, is legally untenable as section 432(2) regulates the continuation of proceedings against a company under liquidation but does not govern the propriety of joinder of parties. If applicable, it would affect the proceedings as a whole and not selectively as against one respondent. It is also important to emphasize that the present application does not seek to execute any decree or enforce payment against the 1st Respondent. It merely seeks leave for the hearing and determination of the declaratory suit. It is also important to emphasize that the present application does not seek to execute any decree or enforce payment against the 1st Respondent but merely seeks leave for the hearing and determination of the declaratory suit. It is noted that at this stage, no executable decree exists against the 1st Respondent, and the Applicant's claim has not crystallized into a form capable of enforcement and hence the question of creditor status and its implications will be addressed once the Applicant obtains the declaratory order and presents it to the requisite Respondent for consideration and hence at the moment, the Applicant is merely seeking an opportunity to establish liability, and not to enforce or recover any sum in a manner that would prejudice the insolvency process. Further, there is no legal impediment to the 1st Respondent participating in the proceedings through the appointed Interim Liquidator as the appointment of an interim liquidator facilitates, rather than extinguishes, the handling of claims against the company. This position is supported by the decision in George Ngure Kariuki v Charles Osoro Makone & another [2014] eKLR, where the Court allowed proceedings to be instituted notwithstanding statutory management, noting that judicial determination of such issues does not prejudice the statutory management process.Again, this Court is enjoined under Article 159(2)(d) of the Constitution, as well as Sections 1A and 1B of the Civil Procedure Act, to administer justice without undue regard to procedural technicalities and to facilitate the just and expeditious determination of disputes. 10.As regards the 3rd Respondent’s contention that the Applicant's prayers seek to disparage the liquidation process and the role of the interim liquidator under Section 432(3) of the Insolvency Act, which provides that liquidation is undertaken for the benefit of creditors as a whole, the Applicant maintains that she does not in any way challenge, interfere with, or undermine the liquidation or statutory management process. To the contrary, the Applicant expressly acknowledges the existence of statutory management and the appointment of the interim liquidator, and has approached this Court precisely in recognition of the statutory requirement that proceedings against the insurer be undertaken with leave of the Court and hence the present application is therefore not an attack on the insolvency regime, but a lawful invocation of this Court's supervisory jurisdiction within that framework. It was contended that section 432(3) of the Insolvency Act does not operate as a bar to the institution or continuation of proceedings, but rather, it underscores the need for orderly administration of claims under the supervision of the Court and that the statutory scheme expressly contemplates those proceedings may be commenced or continued with leave of the Court.The Applicant's application is confined to seeking such leave and to regularizing the proceedings already instituted. It does not seek to interfere with the liquidation process, nor does it purport to assert any entitlement to distribution of assets at this stage. 11.As regards the 3rd Respondent’s claim that the Applicant's prayers undermine the order of priority of creditors as set out under Schedule 2 of the Insolvency Act, it is noted that that the present application does not concern the distribution of assets, the ranking of claims, or the enforcement of payment but merely seeks leave to continue proceedings and to validate the institution of the suit. The issue of creditor priority arises only at the stage of distribution in insolvency proceedings, after claims have been established and admitted. It does not arise at the stage where a party is seeking to establish liability. It seems the 3rd Respondent's argument proceeds on an incorrect assumption that the Applicant is already a creditor within the meaning of insolvency law. Under the Insolvency Act, a creditor is a person to whom a debt is presently due and payable, or whose claim has crystallized into a legally enforceable obligation capable of proof in insolvency proceedings. In the present case, the Applicant does not hold a decree capable of being executed against the 1st Respondent. The Applicant's claim against the insurer is contingent upon the determination of the declaratory suit in Bondo SRMCC No. E040 of 2025, which seeks to establish liability under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act. Until such declaratory relief is obtained, the Applicant's claim remains inchoate, contingent, and unliquidated. It does not constitute a debt presently due, nor is it a claim provable in insolvency proceedings. The Applicant is therefore not yet a creditor participating in the distribution of the insurer's assets. It follows that the present application does not engage, let alone undermine, the statutory hierarchy of creditors under Schedule 2 of the Insolvency Act. The question of priority only arises after liability has been established and a claim has crystallized into a provable debt. 12.As regards the 3rd Respondent’s contention that the application offends the doctrine of privity of contract on the basis that the 3rd Respondent is not a party to the insurance contract, it is clear that the Applicant's claim is not grounded in privity of contract as against the 3rd Respondent. The 3rd Respondent, being the Insurance Regulatory Authority established under the Insurance Act, is joined in these proceedings not as a contracting party, but in its statutory and regulatory capacity. Its role in placing the 1st Respondent under statutory management, and its oversight mandate over insurers, places it squarely within the factual and legal framework of the present dispute. The joinder of the 3rd Respondent is therefore not predicated on contractual relations, but on statutory responsibility and the need for effective and complete adjudication of the issues before this Honourable Court. Again, the Applicant's underlying claim arises under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act, which creates a statutory right of indemnity in favour of third parties. That right exists independently of the doctrine of privity of contract and imposes obligations on the insurer that are enforceable by third parties who were not privy to the insurance contract. Hence, the attempt by the 3rd Respondent to invoke the doctrine of privity in this context is therefore legally untenable, as it seeks to defeat a claim grounded in statute rather than contract. The issue of whether a party is properly joined to proceedings is not a pure point of law capable of determination as a preliminary objection. It requires the Court to consider the pleadings, the role of the party, and the necessity of that party for the effective determination of the dispute. As such, it falls squarely outside the scope of a proper preliminary objection as defined in Mukisa Biscuit ManufacturingCo. Ltd v West End Distributors Ltd (1969) EA 696. 13.As regards the 3rd Respondent’s contention that the application offends the doctrine of exhaustion of administrative remedies under Section 204A of the Insurance Act and Section 9(2) of the Fair Administrative Action Act, and that this Honourable Court therefore lacks jurisdiction, it is noted that the doctrine of exhaustion applies in circumstances where a dispute falls within a statutory framework that provides a specific administrative mechanism for resolution, which must be invoked before recourse to the courts. However, that doctrine is only applicable where inter alia; there exists a clear and adequate alternative forum; and that the dispute falls within the mandate of that forum. In the present case, neither condition is satisfied as the Applicant does not seek to challenge any administrative decision of the 3rd Respondent, nor does the Applicant seek regulatory intervention or administrative relief. The application before this Court is for leave to continue judicial proceedings already instituted in a court of competent jurisdiction and that the relief sought is purely judicial in nature. Further, there is no statutory mechanism under the Insurance Act or otherwise that provides an alternative forum for the determination of declaratory claims under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act. Such claims are exclusively within the jurisdiction of the courts. Further, even where the doctrine is potentially applicable, Section 9(4) of the Fair Administrative Action Act expressly empowers the Court to exempt a party from exhausting alternative remedies where the interests of justice so require. The present case, involving a pending declaratory suit and the need to regularize proceedings, would in any event fall within such an exception. Hence, the invocation of the exhaustion doctrine in the present circumstances is therefore misplaced and cannot operate to oust the jurisdiction of this Court. 14.As regards the 3rd Respondent’s contention that the application fails to meet the threshold of specificity as articulated in Anarita Karimi Njeru v Republic (1979) KLR 154 and Mumo Matemu v Trusted Society of Human Rights Alliance, and further that it does not comply with the requirements as to form under Rules 10 and 11(2) of the Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules, 2013 (the Mutunga Rules), it is noted that the application herein does not seek for remedies on grounds of constitutional violation of certain rights due to the Applicant. The principles in Anarita Karimi Njeru and Mumo Matemu, as well as the provisions of the Mutunga Rules, apply specifically to constitutional petitions brought under Articles 22 and 23 of the Constitution. They govern the manner in which alleged violations of constitutional rights are to be pleaded, including the requirement that such violations be set out with precision. However, the present matter is not a constitutional petition but is a statutory application brought under Section 67C (10) of the Insurance Act, seeking leave of the Court to continue proceedings against an insurer under statutory management. The procedural framework applicable to this application is that governing civil proceedings under the Civil Procedure Act and Rules, and not the Mutunga Rules. The Applicant has clearly set out the reliefs sought and description of the issues inter alia; the statutory basis of the application; the factual background leading to the filing of the suit; the existence of statutory management; the relief sought from this Court. The application is therefore sufficiently pleaded and meets the threshold required for such proceedings. Further, the question of whether pleadings meet a particular standard of specificity is not a pure point of law, but one that requires the Court to examine the pleadings and supporting material. It is therefore not a proper ground for a preliminary objection within the meaning of Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696. In any event, and without prejudice to the foregoing, any alleged defect in form or pleading, if at all, would be procedural in nature and curable. Such defects cannot justify the striking out of proceedings, particularly where no prejudice has been demonstrated.This position is reinforced by Article 159(2)(d) of the Constitution, as well as Sections 1A, 1B and 3A of the Civil Procedure Act, which enjoin this Honourable Court to administer justice without undue regard to procedural technicalities and to make such orders as may be necessary for the ends of justice. 15.Finally, it is contended that the 3rd Respondent's Preliminary Objection is fundamentally flawed in both form and substance. At the threshold, the objection fails to meet the test set out in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696, as it raises issues that require factual inquiry and the exercise of judicial discretion. On that basis alone, the objection is incompetent and ought to be dismissed. Without prejudice to the foregoing, the objection is equally unsustainable on the merits. The 3rd Respondent has mischaracterized the effect of Section 432(2) of the Insolvency Act, which does not oust the jurisdiction of this Honourable Court but rather affirms its supervisory role in granting leave. The Applicant has properly invoked that jurisdiction by approaching this Court under Section 67C(10) of the Insurance Act.Further, the Preliminary Objection is premised on a fundamental misconception that the Applicant is already a creditor within the insolvency framework. As demonstrated, the Applicant does not hold an executable decree against the 1st Respondent, and the declaratory proceedings are intended to establish liability. The question of creditor status, priority, and participation in insolvency proceedings does not arise at this stage.The 3rd Respondent has therefore conflated the process of establishing liability with that of enforcing a debt, and in so doing, has advanced arguments that are premature, misplaced, and legally untenable. The additional grounds raised-relating to privity of contract, exhaustion of administrative remedies, constitutional pleading standards, and procedural form-are equally inapplicable and fail to raise any proper point of law capable of sustaining a preliminary objection.The Applicant has approached this Honourable Court in good faith, candidly disclosed all relevant facts, and seeks only to regularize proceedings in compliance with the law. The application represents a proper invocation of the Court's jurisdiction and does not in any way prejudice the insolvency process.In line with Article 159(2)(d) of the Constitution, as well as Sections 1A, 1B and 3A of the Civil Procedure Act, this Honourable Court is enjoined to administer justice without undue regard to procedural technicalities and to facilitate the just, expeditious, and proportionate determination of disputes.In the premises, the Preliminary Objection is premature, misconceived, and devoid of merit, and this Honourable Court is urged to dismiss it with costs. 16.I have given due consideration to the Notice of Preliminary Objection and the rival submissions. I find the issue for determination is whether the Preliminary Objection has merit. 17.As regards the 3rd Respondent’s objection that the court is divested of jurisdiction by dint of section 432 (2) of the Insolvency Act. It was contended that the objection as framed does not meet the threshold of a proper preliminary objection and is therefore incompetent. That it is settled law that a preliminary objection must raise a pure point of law, argued on the assumption that all pleaded facts are correct, and must not invite the Court to ascertain facts or exercise discretion. This principle was authoritatively stated in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696 and reaffirmed in Oraro v Mbaja [2005] eKLR. That in the present matter, the issue raised by the 3rd Respondent-whether leave of the Court was obtained, whether such leave was required in the circumstances, and whether the proceedings can be regularized- necessarily calls for factual inquiry and the exercise of judicial discretion which are not pure points of law capable of disposal at the preliminary stage and hence, on this ground alone, the objection is incompetent.Further, on the issue of jurisdiction, it would appear that the 3rd Respondent's contention on jurisdiction is equally unsustainable in that while it is trite that jurisdiction is everything, as stated in Owners of the Motor Vessel "Lillian S" v Caltex Oil (Kenya) Ltd [1989] KLR 1, the issue before this Court must be whether the objection truly raises a question of jurisdiction. It appears that the 3rd Respondent has fundamentally mischaracterized the nature and effect of Section 432(2) of the Insolvency Act yet the said provision does not oust or divest the jurisdiction of this Honourable Court but rather, it expressly provides that:"legal proceedings against the company may be begun or continued only with the approval of the Court and subject to such conditions as the Court may impose."The foregoing provision does not take away jurisdiction-it affirms it as it vests the Court with supervisory authority over proceedings involving a company under liquidation and grants the Court discretion to allow such proceedings to continue. Further, this Honourable Court is constitutionally vested with original jurisdiction under Article 165(3)(a) of the Constitution, which jurisdiction cannot be ousted except by express statutory provision. As affirmed by the Supreme Court in Samuel Kamau Macharia & another v Kenya Commercial Bank & 2 Others, jurisdiction flows from the Constitution and statute and cannot be limited by implication. The present case does not disclose any statutory provision that divests this Court of jurisdiction to hear an application for leave. On the contrary, the statutory framework expressly requires that such leave be sought from this Court and that it is precisely for this reason that the Applicant has approached this Honourable Court under Section 67C(10) of the Insurance Act Cap 487 Laws Of Kenya, seeking leave to continue with proceedings in Bondo SRMCC No. E040 of 2025 and hence the application is therefore properly before this Court.Further, this Honourable Court is the most appropriate forum within its territorial jurisdiction to determine the application, considering that the underlying suit and declaratory proceedings are both situated within Bondoand which fall under this Court's supervisory jurisdiction. Section 432(2) of the Insolvency Act does not oust or divest the jurisdiction of this Honourable Court but rather, it expressly provides that:“legal proceedings against the company may be begun or continued only with the approval of the Court and subject to such conditions as the Court may impose."This provision does not take away jurisdiction-it affirms it. It vests the Court with supervisory authority over proceedings involving a company under liquidation and grants the Court discretion to allow such proceedings to continue.Further, this Honourable Court is constitutionally vested with original jurisdiction under Article 165(3)(a) of the Constitution, which jurisdiction cannot be ousted except by express statutory provision. As affirmed by the Supreme Court in Samuel Kamau Macharia & another v Kenya Commercial Bank & 2 Others, jurisdiction flows from the Constitution and statute and cannot be limited by implication.In the present case, there is no statutory provision that divests this Court of jurisdiction to hear an application for leave. On the contrary, the statutory framework expressly requires that such leave be sought from this Court.It is precisely for this reason that the Applicant has approached this Honourable Court under Section 67C (10) of the Insurance Act Cap 487 Laws of Kenya, seeking leave to continue with proceedings in Bondo SRMCC No. E040 of 2025. The application is therefore properly before this Court.Further, this Honourable Court is the most appropriate forum within its territorial jurisdiction to determine the application, considering that the underlying suit and declaratory proceedings are both situated within Bondo and fall under this Court's supervisory jurisdiction. Even though the 3rd Respondent has proposed that the application should have been lodged in Milimani Nairobi where there is already a case filed, it is my considered view that this court has the requisite jurisdiction to consider the issue of leave as sought by the Applicant and that after the conclusion of the declaratory suit, the Applicant could then approach the statutory manager to have his decree considered. Additionally, the existence of interim liquidation proceedings before the High Court at Nairobi does not oust the jurisdiction of this Court. It merely necessitates compliance with the statutory requirement of leave, which is precisely what the Applicant seeks.Finally, it bears emphasizing that the Applicant is already before this Honourable Court seeking leave. The objection that leave has not been obtained is therefore premature and self-defeating, as it seeks to defeat an application whose very purpose is to obtain such leave. 18.As regards the 3rd Respondent’s objection that no proceedings can be instituted or continued following interim liquidation orders without the approval of the Court, it is contended that the Applicant does not dispute that leave of the Court is required under the applicable statutory framework as that is the very basis upon which the present application is brought. That the Applicant instituted Bondo SRMCC No. E040 of 2025 seeking declaratory relief under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act to compel indemnity arising from Bondo PMCC No. 20 of 2018. That at the time of filing, the Applicant was not aware that the 1st Respondent had been placed under statutory management and that upon becoming aware of that fact, the Applicant promptly approached this Honourable Court to seek leave and to regularize the proceedings and thus the application has been brought in good faith and in full recognition of the statutory framework governing proceedings against an insurer under statutory management. Indeed, section 432(2) of the Insolvency Act does not render proceedings instituted without prior leave a nullity but rather, it subjects such proceedings to the control of the Court, which retains discretion to grant leave and impose such conditions as it deems appropriate. The existence of this discretion demonstrates that the omission to obtain leave at the time of filing is not fatal, but curable. This position accords with the well-established principle that procedural lapses should not defeat substantive justice where they are capable of being cured, as held in Microsoft Corporation v Mitsumi Computer Garage Ltd [2001] eKLR. Further, the remedy sought by the 3rd Respondent-namely, the striking out of the 3rd Respondent from the proceedings, is legally untenable as section 432(2) regulates the continuation of proceedings against a company under liquidation but does not govern the propriety of joinder of parties. If applicable, it would affect the proceedings as a whole and not selectively as against one respondent. It is also important to emphasize that the present application does not seek to execute any decree or enforce payment against the 1st Respondent. It merely seeks leave for the hearing and determination of the declaratory suit. It is also important to emphasize that the present application does not seek to execute any decree or enforce payment against the 1st Respondent but merely seeks leave for the hearing and determination of the declaratory suit. It is noted that at this stage, no executable decree exists against the 1st Respondent, and the Applicant's claim has not crystallized into a form capable of enforcement and hence the question of creditor status and its implications will be addressed once the Applicant obtains the declaratory order and presents it to the requisite Respondent for consideration and hence at the moment, the Applicant is merely seeking an opportunity to establish liability, and not to enforce or recover any sum in a manner that would prejudice the insolvency process. Further, there is no legal impediment to the 1st Respondent participating in the proceedings through the appointed Interim Liquidator as the appointment of an interim liquidator facilitates, rather than extinguishes, the handling of claims against the company. This position is supported by the decision in George Ngure Kariuki v Charles Osoro Makone & another [2014] eKLR, where the Court allowed proceedings to be instituted notwithstanding statutory management, noting that judicial determination of such issues does not prejudice the statutory management process.Again, this Court is enjoined under Article 159(2)(d) of the Constitution, as well as Sections 1A and 1B of the Civil Procedure Act, to administer justice without undue regard to procedural technicalities and to facilitate the just and expeditious determination of disputes. 19.As regards the 3rd Respondent’s contention that the Applicant's prayers seek to disparage the liquidation process and the role of the interim liquidator under Section 432(3) of the Insolvency Act, which provides that liquidation is undertaken for the benefit of creditors as a whole, the Applicant maintains that she does not in any way challenge, interfere with, or undermine the liquidation or statutory management process. To the contrary, the Applicant expressly acknowledges the existence of statutory management and the appointment of the interim liquidator, and has approached this Court precisely in recognition of the statutory requirement that proceedings against the insurer be undertaken with leave of the Court and hence the present application is therefore not an attack on the insolvency regime, but a lawful invocation of this Court's supervisory jurisdiction within that framework. It was contended that section 432(3) of the Insolvency Act does not operate as a bar to the institution or continuation of proceedings, but rather, it underscores the need for orderly administration of claims under the supervision of the Court and that the statutory scheme expressly contemplates those proceedings may be commenced or continued with leave of the Court.The Applicant's application is confined to seeking such leave and to regularizing the proceedings already instituted. It does not seek to interfere with the liquidation process, nor does it purport to assert any entitlement to distribution of assets at this stage. 20.As regards the 3rd Respondent’s claim that the Applicant's prayers undermine the order of priority of creditors as set out under Schedule 2 of the Insolvency Act, it is noted that that the present application does not concern the distribution of assets, the ranking of claims, or the enforcement of payment but merely seeks leave to continue proceedings and to validate the institution of the suit. The issue of creditor priority arises only at the stage of distribution in insolvency proceedings, after claims have been established and admitted. It does not arise at the stage where a party is seeking to establish liability. It seems the 3rd Respondent's argument proceeds on an incorrect assumption that the Applicant is already a creditor within the meaning of insolvency law. Under the Insolvency Act, a creditor is a person to whom a debt is presently due and payable, or whose claim has crystallized into a legally enforceable obligation capable of proof in insolvency proceedings. In the present case, the Applicant does not hold a decree capable of being executed against the 1st Respondent. The Applicant's claim against the insurer is contingent upon the determination of the declaratory suit in Bondo SRMCC No. E040 of 2025, which seeks to establish liability under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act. Until such declaratory relief is obtained, the Applicant's claim remains inchoate, contingent, and unliquidated. It does not constitute a debt presently due, nor is it a claim provable in insolvency proceedings. The Applicant is therefore not yet a creditor participating in the distribution of the insurer's assets. It follows that the present application does not engage, let alone undermine, the statutory hierarchy of creditors under Schedule 2 of the Insolvency Act. The question of priority only arises after liability has been established and a claim has crystallized into a provable debt. 21.As regards the 3rd Respondent’s contention that the application offends the doctrine of privity of contract on the basis that the 3rd Respondent is not a party to the insurance contract, it is clear that the Applicant's claim is not grounded in privity of contract as against the 3rd Respondent. The 3rd Respondent, being the Insurance Regulatory Authority established under the Insurance Act, is joined in these proceedings not as a contracting party, but in its statutory and regulatory capacity. Its role in placing the 1st Respondent under statutory management, and its oversight mandate over insurers, places it squarely within the factual and legal framework of the present dispute. The joinder of the 3rd Respondent is therefore not predicated on contractual relations, but on statutory responsibility and the need for effective and complete adjudication of the issues before this Honourable Court. Again, the Applicant's underlying claim arises under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act, which creates a statutory right of indemnity in favour of third parties. That right exists independently of the doctrine of privity of contract and imposes obligations on the insurer that are enforceable by third parties who were not privy to the insurance contract. Hence, the attempt by the 3rd Respondent to invoke the doctrine of privity in this context is therefore legally untenable, as it seeks to defeat a claim grounded in statute rather than contract. The issue of whether a party is properly joined to proceedings is not a pure point of law capable of determination as a preliminary objection. It requires the Court to consider the pleadings, the role of the party, and the necessity of that party for the effective determination of the dispute. As such, it falls squarely outside the scope of a proper preliminary objection as defined in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696. 22.As regards the 3rd Respondent’s contention that the application offends the doctrine of exhaustion of administrative remedies under Section 204A of the Insurance Act and Section 9(2) of the Fair Administrative Action Act, and that this Honourable Court therefore lacks jurisdiction, it is noted that the doctrine of exhaustion applies in circumstances where a dispute falls within a statutory framework that provides a specific administrative mechanism for resolution, which must be invoked before recourse to the courts. However, that doctrine is only applicable where inter alia; there exists a clear and adequate alternative forum; and that the dispute falls within the mandate of that forum. In the present case, neither condition is satisfied as the Applicant does not seek to challenge any administrative decision of the 3rd Respondent, nor does the Applicant seek regulatory intervention or administrative relief. The application before this Court is for leave to continue judicial proceedings already instituted in a court of competent jurisdiction and that the relief sought is purely judicial in nature. Further, there is no statutory mechanism under the Insurance Act or otherwise that provides an alternative forum for the determination of declaratory claims under Section 10 of the Insurance (Motor Vehicles Third Party Risks) Act. Such claims are exclusively within the jurisdiction of the courts. Further, even where the doctrine is potentially applicable, Section 9(4) of the Fair Administrative Action Act expressly empowers the Court to exempt a party from exhausting alternative remedies where the interests of justice so require. The present case, involving a pending declaratory suit and the need to regularize proceedings, would in any event fall within such an exception. Hence, the invocation of the exhaustion doctrine in the present circumstances is therefore misplaced and cannot operate to oust the jurisdiction of this Court. 23.As regards the 3rd Respondent’s contention that the application fails to meet the threshold of specificity as articulated in Anarita Karimi Njeru v Republic (1979) KLR 154 and Mumo Matemu v Trusted Society of Human Rights Alliance, and further that it does not comply with the requirements as to form under Rules 10 and 11(2) of the Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules, 2013 (the Mutunga Rules), it is noted that the application herein does not seek for remedies on grounds of constitutional violation of certain rights due to the Applicant. The principles in Anarita Karimi Njeru and Mumo Matemu, as well as the provisions of the Mutunga Rules, apply specifically to constitutional petitions brought under Articles 22 and 23 of the Constitution. They govern the manner in which alleged violations of constitutional rights are to be pleaded, including the requirement that such violations be set out with precision. However, the present matter is not a constitutional petition but is a statutory application brought under Section 67C(10) of the Insurance Act, seeking leave of the Court to continue proceedings against an insurer under statutory management. The procedural framework applicable to this application is that governing civil proceedings under the Civil Procedure Act and Rules, and not the Mutunga Rules. The Applicant has clearly set out the reliefs sought and description of the issues inter alia; the statutory basis of the application; the factual background leading to the filing of the suit; the existence of statutory management; the relief sought from this Court. The application is therefore sufficiently pleaded and meets the threshold required for such proceedings. Further, the question of whether pleadings meet a particular standard of specificity is not a pure point of law, but one that requires the Court to examine the pleadings and supporting material. It is therefore not a proper ground for a preliminary objection within the meaning of Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696. In any event, and without prejudice to the foregoing, any alleged defect in form or pleading, if at all, would be procedural in nature and curable. Such defects cannot justify the striking out of proceedings, particularly where no prejudice has been demonstrated.This position is reinforced by Article 159(2)(d) of the Constitution, as well as Sections 1A, 1B and 3A of the Civil Procedure Act, which enjoin this Honourable Court to administer justice without undue regard to procedural technicalities and to make such orders as may be necessary for the ends of justice. 24.Finally, it is contended that the 3rd Respondent's Preliminary Objection is fundamentally flawed in both form and substance. At the threshold, the objection fails to meet the test set out in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696, as it raises issues that require factual inquiry and the exercise of judicial discretion. On that basis alone, the objection is incompetent and ought to be dismissed. Without prejudice to the foregoing, the objection is equally unsustainable on the merits. The 3rd Respondent has mischaracterized the effect of Section 432(2) of the Insolvency Act, which does not oust the jurisdiction of this Honourable Court but rather affirms its supervisory role in granting leave. The Applicant has properly invoked that jurisdiction by approaching this Court under Section 67C (10) of the Insurance Act.Further, the Preliminary Objection is premised on a fundamental misconception that the Applicant is already a creditor within the insolvency framework. As demonstrated, the Applicant does not hold an executable decree against the 1st Respondent, and the declaratory proceedings are intended to establish liability. The question of creditor status, priority, and participation in insolvency proceedings does not arise at this stage.The 3rd Respondent has therefore conflated the process of establishing liability with that of enforcing a debt, and in so doing, has advanced arguments that are premature, misplaced, and legally untenable. The additional grounds raised-relating to privity of contract, exhaustion of administrative remedies, constitutional pleading standards, and procedural form-are equally inapplicable and fail to raise any proper point of law capable of sustaining a preliminary objection.The Applicant has approached this Honourable Court in good faith, candidly disclosed all relevant facts, and seeks only to regularize proceedings in compliance with the law. The application represents a proper invocation of the Court's jurisdiction and does not in any way prejudice the insolvency process.In line with Article 159(2)(d) of the Constitution, as well as Sections 1A, 1B and 3A of the Civil Procedure Act, this Honourable Court is enjoined to administer justice without undue regard to procedural technicalities and to facilitate the just, expeditious, and proportionate determination of disputes. In the premises, it is clear that the Preliminary Objection is premature, misconceived, and devoid of merit. The Respondents should allow the Applicant pursue his claim until he obtains the requisite decree for consideration by the Statutory manager. I find that no prejudice will be suffered by the Respondents if the Applicant is allowed to ventilate her application before this court. It would be inconvenient for the Applicant to lodge an application seeking leave all the way in Nairobi yet his claim is pending before a court which is supervised by this court. It is believed that once the Applicant secures the requisite decree, she will then present it to the statutory manager and or the interim liquidator for consideration. 25.Having found that the Applicant is entitled to approach this Court for leave to continue with the pending declatory suit at Bondo Law Courts, it is my view that setting down the Applicant’s application dated 25th February, 2026 for hearing would not serve any useful purpose in view of my finding that the 3rd Respondent’s preliminary objection lacks merit. consequently, I find that the said application should be allowed forthwith so that the Applicant can proceed with the declatory suit and thereafter obtain the requisite decree for consideration by the statutory manager. 25.In view of the foregoing observations, it is my finding that the 3rd Respondent’s preliminary objection dated 10/3/2026 lacks merit. The same is dismissed with no order as to costs. The Applicant’s application dated 25th February, 2026 is allowed as prayed. DATED AND DELIVERED AT SIAYA, THIS 22ND DAY OF MAY 2026.D. KEMEIJUDGEIn the presence of:Adeka for M/s Wafula..............for ApplicantM/s Kibiego................for 3rd RespondentN/A.........................1st RespondentN/A.......................2nd RespondentN/A...............................4th RespondentM/s Mourine.............................Court Assistant