[2022] KEHC 161 (KLR)
The court found that, given the interlocutory nature of the application and the objectives of the Insolvency Act, 2015, it was appropriate to preserve the subject property by granting an injunction. This would allow the company an opportunity to remain a going concern and ensure that the interests of all creditors,...
Source-derived case information.
- Citation
- [2022] KEHC 161 (KLR)
- Parties
- Applicant: Tustker Mattresses Limited; Respondent: Equity Bank Kenya Limited; Respondent: Antique Auctions Agencies
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Insolvency Petition E018 of 2020
- Procedural Posture
- Insolvency Petition / Interlocutory Application for Injunction
- Outcome
- Injunction granted; sale of property restrained pending further orders.
- Judges
- DAS Majanja
- Legal Topics
- Insolvency Proceedings, Statutory Power of Sale, Interlocutory Injunctions
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Tustker Mattresses Limited
Applicant
Equity Bank Kenya Limited
Respondent
Antique Auctions Agencies
Respondent
Procedural Posture
Insolvency Petition / Interlocutory Application for Injunction
Legal Issues
- 1 Whether an injunction should issue to restrain the sale of the applicant's property by the respondent bank pending determination of the insolvency proceedings.
- 2 How to balance the interests of the company and its creditors under the Insolvency Act, 2015.
Ratio Decidendi
The court found that, given the interlocutory nature of the application and the objectives of the Insolvency Act, 2015, it was appropriate to preserve the subject property by granting an injunction. This would allow the company an opportunity to remain a going concern and ensure that the interests of all creditors, not just the secured creditor, were considered. The court emphasized the need to maintain a fair balance between the interests of the company and its creditors, and that allowing the sale to proceed at this stage could undermine the efficient and optimal administration of the company's assets. The preservation of the property was deemed necessary to enable the parties to...
Court Disposition
Injunction granted; sale of property restrained pending further orders.
Orders
- An injunction is issued restraining Equity Bank Kenya Limited from selling or otherwise disposing of the property known as LR No. 209/11392 (IR No. 54287) in exercise of its statutory power of sale pending the hearing and determination of the application or further orders of the court.
- The parties are invited to take directions for expeditious disposal of the application.
Full Case Text
Judgment text and source record
22 paragraphs
Tustker Mattresses Limited v Equity Bank Kenya Limited & another (Insolvency Petition E018 of 2020) [2022] KEHC 161 (KLR) (Commercial and Tax) (2 March 2022) (Ruling)
Neutral citation number: [2022] KEHC 161 (KLR)
Republic of Kenya
In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)
Insolvency Petition E018 of 2020
DAS Majanja, J
March 2, 2022
IN THE MATTER OF THE INSOLVENCY ACT AND IN THE MATTER OF TUSKER MATTRESSES LIMITED
Between
Tustker Mattresses Limited
Applicant
and
Equity Bank Kenya Limited
1st Respondent
Antique Auctions Agencies
2nd Respondent
Ruling
1. The Applicant Company (“the Company”) herein is subject to Insolvency proceedings. One of its properties; LR No. 209/11392 (IR No. 54287) is scheduled for sale by public action today, 2nd March 2022 by the Chargee, Equity Bank (“the Bank”).
2. I have heard the arguments on both sides and I take the following view of the matter. The issues raised by the parties are quite substantial but in deciding whether to grant the injunction I am guided by the objectives of the Insolvency Act, 2015. The court is to ensure that the Company has an opportunity to remain a going concern in order to pay off creditors including the Bank and to achieve a better outcome for the Company’s creditor’s as a whole than would likely be the case if the Company were liquidated. Further, that the court is required to weigh and maintain a fair balance between the interests of the Company and those of its creditors for the efficient and optimal administration and distribution of the Company’s assets for the benefit of its creditors.
3. As the matter is merely interlocutory in nature, the court would rather act with caution to preserve the subject property in order to enable parties resolve the issues at hand rather than allow the sale to proceed.
4. In the interests of justice, I therefore make the following orders:(a)An injunction be and is hereby issued restraining Equity Bank Kenya Limited from selling or otherwise disposing of the property known as LR No. 209/11392 (IR No. 54287) in exercise of its statutory power of sale pending the hearing and determination of the application or further orders of the court. **(b)The parties are now invited to take directions for expeditious disposal of the application**.
DATED AND DELIVERED AT NAIROBI THIS 2ND DAY OF MARCH 2022D. S. MAJANJAJUDGEMr Ogola instructed by O & M Law LLP Advocates for the Applicant.Mr Kimani, SC instructed by Hamilton, Harrison and Mathews Advocates for the Respondents.