https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12168

 **REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT KAKAMEGA** **CIVIL APPEAL NO. E001 OF 2026** **KENNEDY SHIMANYULA ..……………………………………….. APPELLANT/APPLICANT** **VERSUS** **INVESCO INSURANCE COMPANY ……………………………………… 1ST REPONDENT** **ESTHER AVISA BETI ……………..…………………………………….…... 2ND RESPONDENT** **RULING** 1. The Applicant filed a notice of motion application dated 23rd December 2025 where she sought the following orders; 2. *Spent.* 3. *Spent.* 4. *THAT pending the hearing and determination of this appeal, this Honourable Court be pleased to set aside, vary, vacate and/or stay the ruling of HON. P. MUTUA- CM delivered in KAKAMEGA CMC CIVIL CASE NO E004 of 2022 on 16th December 2022.* 5. The application is premised on the grounds set out on its face and on the supporting affidavit sworn on the same day by the Applicant, where he avers that he had initiated a suit, Kakamega CMC Civil Case No E004 of 2022, against the Respondents, where he sought declaratory prayers directing the 1st Respondent to settle the decree in Kakamega CMC Civil Suit No. 179 of 2015. 6. He claims that the decision by the trial court delivered on 16th December 2025 prejudiced him as the 2nd Respondent proceeded to recover the decretal sum from him although at the time of the accident, his motor vehicle registration number KBK 831 F was insured by the 1st Respondent and as such, they are obligated by law to settle the decretal sum since had paid their premiums. 7. He states that his case has a high chance of success and that he is apprehensive that the 2nd Respondent could execute if the orders sought are not granted. 8. In opposition to the application, the 1st Respondent filed a notice of preliminary objection dated 15th January 2026 contending that the whole appeal is fatally defective for want of substance and compliance with the relevant rules of procedure and should be dismissed with costs. 9. They aver that the appeal and the application dated 23rd December 2025 offended the mandatory provisions of Section 432 (2) of the Insolvency Act CAP 53 Laws of Kenya in orders made on 31st July 2025 in **Milimani HCCOMMP/E087 of 2024, The Commissioner of Insurance vs. Policy Holders Compensation Fund**. 10. The 1st Respondent opines that the suit be struck out for failure to seek leave of court to institute the proceedings after the appointment of the interim liquidator for Invesco Assurance Company Limited. 11. They referred to Section 432 (2) of the Insolvency Act, 2015, which provides that where a moratorium is placed over all legal proceedings against the company, a party who wishes to institute or continue with legal proceedings against the company under liquidation, ought to seek approval of the Insolvency Court. 12. They pray that the application and appeal be struck out as it is incurably defective. 13. The application was canvassed by way of written submissions. However, at the time of writing the ruling, the 1st Respondent was the only party that had filed their submissions. **Analysis and Determination** 1. I have carefully considered the application, the notice of preliminary objection by the 1st Respondent, and their written submissions. 2. Although the Applicant has filed an application seeking stay orders, the 1st Respondent has raised a preliminary objection (PO) where they have challenged both the application and the appeal by the Applicant. They have equally challenged the jurisdiction of this court to hear the application since the Applicant failed to seek leave of the court as required under Section 432(2) of the Insolvency Act, 2015. 3. A preliminary objection raises only issues of law as stated in the famous case in ***Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696,*** where it was stated that: - ***"A preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit."*** 1. The 1st Respondent raised concerns under section 432 (2) of the Insolvency Act, which falls squarely under the point of law as envisaged in the Mukhisa biscuit case. 2. The jurisdiction of courts is conferred by the Constitution or statutes and not conferred by the parties, as was stated in the Supreme Court decision in ***Samuel Kamau Macharia & another v Kenya Commercial Bank Ltd & 2 Others [2012] eKLR***, which stated 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."*** 1. The same sentiments had also been raised by the Court of Appeal in the classic case of ***Owners of the Motor Vessel "Lillian S" v Caltex Oil (Kenya) Ltd [1989] KLR 1,*** which held that:-***“Jurisdiction is everything. Without it, a court has no power to make one more step."*** 2. Where a party has raised an objection on grounds of claims of want of jurisdiction, the court has to first determine if it has the power or jurisdiction to handle the case before dealing with the substantive application. 3. The notice of preliminary objection by the 1st Respondent is based on the decision and orders that were made on 31st July 2025 in ***Milimani HCCOMMP/E087 of 2024, Commissioner of Insurance v Policyholders Compensation Fund***, where they aver that a statutory moratorium came into effect prohibiting the institution or continuation of any lega proceedings against the company under liquidation until leave of the court is obtained in the insolvency court. 4. Section 432(2) of the Insolvency Act provides that: ***"When a liquidation order has been made, or a provisional liquidator has been appointed, no person may commence or continue legal proceedings against the company or in relation to its property except with the approval of the Court and subject to such conditions as the Court considers appropriate."*** 5. From the wording of the above statute, the intention of the drafters was very clear when they stated that "*no person may commence or continue legal proceedings*" except with the approval of the court. Once an insolvency proceeding has reached the stage stated by the section, a moratorium is placed on the assets of the company for distribution to the various creditors and prevent multiple proceedings in different courts. 6. I have perused both the appeal and the application and note that the application was filed on 23rd December 2025. This was after a liquidator had already been appointed and a moratorium placed upon the 1st Respondent. The applicant has not pleaded or demonstrated that he secured leave before instituting the current proceedings. 7. The law is clear. Leave has to be sought and the Applicant cannot claim that his appeal has merit and he will suffer prejudice if the proceedings are not heard. He cannot invoke Article 159 (2)(d) of the Constitution to try and circumvent an express statutory requirement. The Supreme Court in ***Raila Odinga & 5 others vs Independent Electoral and Boundaries Commission & 3 others (2013)*** cautioned that Article 159 was never intended to overthrow clear procedural and substantive requirements enacted by Parliament. Likewise, the Court of Appeal in ***Nicholas Kiptoo Arap Korir Salat v IEBC & 7 Others [2014] eKLR*** reiterated that Article 159 is not a panacea for all procedural deficiencies and cannot be invoked to cure fundamental defects affecting jurisdiction. 8. Having found that the Applicant had not sought leave to institute the proceedings, it would not be prudent to consider if they had met the criteria to stay the execution under Order 42 Rule 6 of the Civil Procedure Rules. 9. Consequently, I do find that the appeal and the application dated 23rd December 2025 are fatally defective for want of compliance with Section 432(2) of the Insolvency Act. The Preliminary Objection dated 15th January 2026 is hereby upheld and the appeal and the application struck out. 10. Costs are awarded to the 1st Respondent. Dated, signed, and delivered at Kakamega, this 30th day of July 2026. **A. C. BETT** **JUDGE** **In the presence of:** No appearance for Mr. Wafula for the Appellant Mr. Warutomo for the 1st Respondent No appearance for the 2nd Respondent Court Assistant: Polycap