https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6926

Thuku v Atlantis Finance Limited (Insolvency Cause E007 of 2023) [2026] KEHC 6926 (KLR) (Commercial and Tax) (21 May 2026) (Ruling) Neutral citation: [2026] KEHC 6926 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Insolvency Cause E007 of 2023 FG Mugambi, J May 21, 2026 Between Vincent Waweru Thuku Petitioner and Atlantis Finance Limited Respondent Ruling 1.On 29th November 2024, this Court, (B.M. Musyoki) entered judgment in favour of the applicant in the following terms:i.The respondent shall pay the petitioner a sum of Kshs 1,788,750.00 within ninety (90) days from the date of this judgment.ii.In default of payment of the aforesaid sum of Kshs 1,788,750.00 within the stipulated period, an order for liquidation of the respondent shall issue forthwith and automatically without further reference to this court.iii.The petitioner is awarded the costs of this cause.iv.The petitioner is at liberty to pursue the disputed balance of the claimed debt through the normal court processes after the above sum is paid.v.This matter shall be mentioned before the Deputy Registrar on a date to be given after this judgment to confirm payment and closure of the file or for further directions in the event the payment will not have been made. 2.The respondent failed to comply with the above orders, prompting the petitioner to file the application dated 11th July 2025, seeking the appointment of an Administrator over the assets of the respondent company. Before this application was determined, the intended interested party, Lydia Nahayo Mukhongo, also filed an application dated 15th May 2025 seeking to be enjoined in the present proceedings. At the time of writing this Ruling the said application had not been responded to by either of the parties. I shall therefore consider the application on its merits notwithstanding that it is unopposed. Analysis and Determination The Application dated 15th May 2025: 3.The law on joinder of interested parties is settled. In Trusted Society of Human Rights Alliance v Mumo Matemu & 5 Others, [2014] eKLR the Court defined an interested party as:“one who has a stake in the proceedings, though he or she was not a party to the cause ab initio. Such a person feels that his or her interest will not be well articulated unless he or she appears in the proceedings, and participates in the process.” 4.Further, in Francis Karioki Muruatetu & Another V Republic & 5 Others, [2016] eKLR the Court set out the threshold for joinder as follows:“(i)The personal interest or stake that the party has in the matter must be set out in the application. The interest must be clearly identifiable and must be proximate enough, to stand apart from anything that is merely peripheral.(ii)The prejudice to be suffered by the intended interested party in case of nonjoinder, must also be demonstrated to the satisfaction of the Court. It must also be clearly outlined and not something remote.(iii)Lastly, a party must, in its application, set out the case and/or submissions it intends to make before the Court, and demonstrate the relevance of those submissions. It should also demonstrate that these submissions are not merely a replication of what the other parties will be making before the Court.” 5.In the present case, the intended interested party has demonstrated that she filed suit against the respondent in 2022 in the Chief Magistrates Court at Nairobi, arising from a loan agreement. She contends that the insolvency of the respondent has affected her ability to pursue her claim. Although she has not produced evidence of a liquidation order, her pleadings establish a direct and proximate interest in the insolvency proceedings. I am satisfied that she meets the threshold for joinder. Accordingly, the application dated 15th May 2025 succeeds. The Application dated 11th July 2025: 6.The application is opposed by the respondent company through a Replying Affidavit sworn by Robert Ndwiga, its acting General Manager, on 29th October 2025. The main ground of objection is that the application had been brought under the wrong provisions of the law, having been premised on Sections 534, 537, 538 and 539 of the Insolvency Act. 7.While the respondent’s objection regarding the citation of the wrong provisions of the Insolvency Act is technically sound, it is important not to lose sight of the broader context and substance of these proceedings. I return to the judgment delivered on 29th November 2024. Order 2 of that judgment is of paramount importance. In it, this Court expressly determined that:“In default of payment of the aforesaid sum of Kshs 1,788,750.00 within the stipulated period, an order for liquidation of the respondent shall issue forthwith and automatically without further reference to this court.” 8.This order was self-executing as it did not require a fresh application, nor did it depend on further judicial intervention. Its effect was that the respondent’s failure to comply within the stipulated period triggered liquidation by operation of law and effluxion of time. I have not been presented with any evidence that the said amount has been paid, neither do I hear the respondent to be stating as such in its response. In these circumstances, the respondent’s reliance on procedural technicalities cannot undo or negate the substantive consequence of its default. For the avoidance of doubt, as at 28th February 2025, the respondent company stood effectively liquidated in accordance with Order 2 of the judgment. 9.From that point forward, the company could not lawfully be placed under administration pursuant to Section 528 of the Insolvency Act which provides that:“A person may not be appointed as administrator of a company that is in liquidation because of—(a)a resolution for voluntary liquidation; or(b)a liquidation order.” 10.The proper course is to proceed with liquidation in accordance with the law. Disposition 11.Accordingly, I make the following final orders:i.The application dated 15th May 2025 by the intended interested party is hereby allowed.ii.The application dated 11th July 2025 seeking appointment of an Administrator over the respondent company is hereby dismissed.iii.A declaratory order is hereby issued that pursuant to Order 2 of the judgment delivered on 29th November 2024, and by reason of the respondent’s failure to pay the sum of Kshs. 1,788,750.00 within ninety (90) days, the liquidation order took effect automatically on 27th February 2025. From that date, the respondent company stood liquidated by operation of law.iv.The petitioner/applicant and the interested party are at liberty to pursue their respective claims against the respondent in accordance with the Insolvency Act and the liquidation process.v.The applicant shall extract and serve these orders upon the Official Receiver, who is hereby appointed as the liquidator of the respondent company. The Official Receiver shall be at liberty to designate and engage a licensed insolvency practitioner to act in that capacity as may be necessary.vi.There shall be no orders as to costs. DATED, SIGNED AND DELIVERED IN NAIROBI THIS 21ST DAY OF MAY 2026.F. MUGAMBIJUDGEDelivered in presence of:Ms Salim for creditorMbugua for respondentCourt Assistants: Lillian & Gloria