' 1. The applicants, Pan Wenyong and Chen Lei, filed a notice of motion dated 14/12/2022 seeking orders to strike out the insolvency petition against Yasian Investments Limited or in the alternative, to stay the proceedings pending determination of Nairobi HCC COM E047 of 2022, Pan Wenyong & Chen Lei v Cynthia Atieno Barasa.
2. They argued that the petition was filed to curtail the hearing of the said suit, which concerns the disputed shareholding in the company. They contended that the petitioner’s attempt to liquidate the company was unreasonable, and sought costs of the petition.
3. In his supporting affidavit, Pan Wenyong stated that he and Chen Lei incorporated Yasian Investments Limited in 2018, holding 800 and 200 shares respectively, with the intention of carrying out agribusiness. In 2019, they invited the petitioner, then his employee, to temporarily hold 800 shares as a nominee to facilitate acquisition of freehold land in Mai Mahiu.
4. He deponed that the petitioner later refused to transfer the shares unless paid Kshs 1,000,000, prompting him to file earlier proceedings, which were dismissed on technical grounds, before instituting Nairobi HCC COM E047 of 2022.
5. He averred that the petitioner contributed no capital to the company, that funds for the land acquisition came from his other company, Yasian Technologies Limited, and that the present petition was an attempt at unjust enrichment. He maintained that the dispute was already the subject of ongoing litigation and that liquidation was premature, unreasonable and an abuse of process, given that other remedies were available.
6. The petitioner, Cynthia Atieno Barasa, swore a replying affidavit opposing the instant application. She stated that she is the director and majority shareholder of Yasian Investments Limited and was therefore competent to respond. She averred that the application was misconceived, frivolous and an abuse of the court process.
7. She denied the allegations in the supporting affidavit, maintaining that the liquidation petition was well-founded under sections 424(1)(a)(g) and 425 of the Insolvency Act, as the company was no longer carrying on business and relations between the directors had become hostile.
8. The Petitioner further asserted that the dispute arose from irreconcilable differences with her co-directors, who had attempted to fraudulently and illegally remove her from the company in November 2020 using forged documents.
9. She further deponed that she contributed significantly towards acquisition of the company’s asset, Longonot/Kijabe Block 4/752, including appearing alone before the Land Control Board, and had to lodge a caution to prevent its illegal disposal by the applicants. She argued that the attempt to strike out or stay the petition was unjustified as the petition met the legal threshold for liquidation.
10. She described the application as mala fides, duplicative of a previous one filed in HCCCOMM MISC/E1306/2020 which had been struck out, and insisted that no other remedies were available given the breakdown of relations between directors. She concluded that liquidation was the only viable option to safeguard the stakeholders’ interests.
Analysis and determination.
11. The respondents filed written submissions dated 11/10/2024 while the petitioner filed submissions dated 17/6/2024. I have considered the same together with the pleadings filed in this matter.
12. Before me is an application seeking the dismissal of the liquidation petition filed herein or, in the alternative, an order staying these proceedings pending the determination of Nairobi HCCOM E047 of 2022, Pan Wenyong & Chen Lei v Cynthia Atieno Barasa.
13. The background is as follows. The respondents incorporated Yasian Investment Limited in 2018. They contend that in 2019 they approached the petitioner, then their employee, to hold 800 shares as a nominee for an investor who was to be identified at a later stage.
14. According to the respondents, sometime in October 2020, they requested the petitioner to sign transfer forms to facilitate the transfer of the shares to a Kenyan investor. The petitioner allegedly declined and instead demanded payment of Kshs. 1,000,000.
15. This dispute culminated in the filing of Nairobi HCCOM E047 of 2022, Pan Wenyong & Chen Lei v Cynthia Atieno Barasa, through a plaint dated 16th February 2022. The pleadings in that suit were annexed as “PW3” to the supporting affidavit of the 2nd respondent.
16. Subsequently, the petitioner filed the present insolvency cause through a petition dated 8th June 2022. She seeks the liquidation of Yasian Investment Limited on the basis that her relationship with the respondents has irretrievably broken down, thereby affecting the company’s business operations. She further alleged that the respondents attempted to fraudulently remove her from the register of members.
17. The petitioner maintains that the company is no longer a going concern and that liquidation is the only viable remedy given the hostility between the parties.
18. I have carefully reviewed the pleadings in Nairobi HCCOM E047 of 2022 alongside the present liquidation petition.
19. It is evident that the central issue in both matters concerns the 800 shares in Yasian Investment Limited held by the petitioner. The dispute is essentially over the ownership and/or transfer of those shares, which has, in turn, strained the relationship between the parties and formed the basis of this petition.
20. In my view, it would have been more prudent for the petitioner to ventilate her grievances within the proceedings in Nairobi HCCOM E047 of 2022 rather than institute parallel proceedings through this liquidation petition.
21. This court cannot purport to determine issues that are directly in contention before another court of concurrent jurisdiction without offending the doctrine of sub judice.
22. In Flower City Limited v Polytanks & Containers Kenya Limited (Insolvency Cause o33 of 2022) [2021] KEHC 34 (KLR) the court stated as follows:
“Where an unjustified insolvency proceeding was presented or pursued, it amounted to an abuse of court process; and an abuse of the unconstrained right to present insolvency proceedings against a company.”
23. Guided by the above, I find that although the petitioner has invoked the Insolvency Act on seemingly legitimate grounds, the present petition is nonetheless an abuse of process as the issues raised are already pending before another court.
24. Consequently, I order that these proceedings be stayed pending the hearing and determination of Nairobi HCCOM E047 of 2022, Pan Wenyong & Chen Lei v Cynthia Atieno Barasa. The costs of this application shall be borne by the petitioner.
25. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
25TH SEPTEMBER 2025
ADO MOSES
JUDGE
In the presence of: -
C/A – Moses
Otinga.……….………..for the Applicant
Aronga..………….…..... for the Respondent
'
2. They argued that the petition was filed to curtail the hearing of the said suit, which concerns the disputed shareholding in the company. They contended that the petitioner’s attempt to liquidate the company was unreasonable, and sought costs of the petition.
3. In his supporting affidavit, Pan Wenyong stated that he and Chen Lei incorporated Yasian Investments Limited in 2018, holding 800 and 200 shares respectively, with the intention of carrying out agribusiness. In 2019, they invited the petitioner, then his employee, to temporarily hold 800 shares as a nominee to facilitate acquisition of freehold land in Mai Mahiu.
4. He deponed that the petitioner later refused to transfer the shares unless paid Kshs 1,000,000, prompting him to file earlier proceedings, which were dismissed on technical grounds, before instituting Nairobi HCC COM E047 of 2022.
5. He averred that the petitioner contributed no capital to the company, that funds for the land acquisition came from his other company, Yasian Technologies Limited, and that the present petition was an attempt at unjust enrichment. He maintained that the dispute was already the subject of ongoing litigation and that liquidation was premature, unreasonable and an abuse of process, given that other remedies were available.
6. The petitioner, Cynthia Atieno Barasa, swore a replying affidavit opposing the instant application. She stated that she is the director and majority shareholder of Yasian Investments Limited and was therefore competent to respond. She averred that the application was misconceived, frivolous and an abuse of the court process.
7. She denied the allegations in the supporting affidavit, maintaining that the liquidation petition was well-founded under sections 424(1)(a)(g) and 425 of the Insolvency Act, as the company was no longer carrying on business and relations between the directors had become hostile.
8. The Petitioner further asserted that the dispute arose from irreconcilable differences with her co-directors, who had attempted to fraudulently and illegally remove her from the company in November 2020 using forged documents.
9. She further deponed that she contributed significantly towards acquisition of the company’s asset, Longonot/Kijabe Block 4/752, including appearing alone before the Land Control Board, and had to lodge a caution to prevent its illegal disposal by the applicants. She argued that the attempt to strike out or stay the petition was unjustified as the petition met the legal threshold for liquidation.
10. She described the application as mala fides, duplicative of a previous one filed in HCCCOMM MISC/E1306/2020 which had been struck out, and insisted that no other remedies were available given the breakdown of relations between directors. She concluded that liquidation was the only viable option to safeguard the stakeholders’ interests.
Analysis and determination.
11. The respondents filed written submissions dated 11/10/2024 while the petitioner filed submissions dated 17/6/2024. I have considered the same together with the pleadings filed in this matter.
12. Before me is an application seeking the dismissal of the liquidation petition filed herein or, in the alternative, an order staying these proceedings pending the determination of Nairobi HCCOM E047 of 2022, Pan Wenyong & Chen Lei v Cynthia Atieno Barasa.
13. The background is as follows. The respondents incorporated Yasian Investment Limited in 2018. They contend that in 2019 they approached the petitioner, then their employee, to hold 800 shares as a nominee for an investor who was to be identified at a later stage.
14. According to the respondents, sometime in October 2020, they requested the petitioner to sign transfer forms to facilitate the transfer of the shares to a Kenyan investor. The petitioner allegedly declined and instead demanded payment of Kshs. 1,000,000.
15. This dispute culminated in the filing of Nairobi HCCOM E047 of 2022, Pan Wenyong & Chen Lei v Cynthia Atieno Barasa, through a plaint dated 16th February 2022. The pleadings in that suit were annexed as “PW3” to the supporting affidavit of the 2nd respondent.
16. Subsequently, the petitioner filed the present insolvency cause through a petition dated 8th June 2022. She seeks the liquidation of Yasian Investment Limited on the basis that her relationship with the respondents has irretrievably broken down, thereby affecting the company’s business operations. She further alleged that the respondents attempted to fraudulently remove her from the register of members.
17. The petitioner maintains that the company is no longer a going concern and that liquidation is the only viable remedy given the hostility between the parties.
18. I have carefully reviewed the pleadings in Nairobi HCCOM E047 of 2022 alongside the present liquidation petition.
19. It is evident that the central issue in both matters concerns the 800 shares in Yasian Investment Limited held by the petitioner. The dispute is essentially over the ownership and/or transfer of those shares, which has, in turn, strained the relationship between the parties and formed the basis of this petition.
20. In my view, it would have been more prudent for the petitioner to ventilate her grievances within the proceedings in Nairobi HCCOM E047 of 2022 rather than institute parallel proceedings through this liquidation petition.
21. This court cannot purport to determine issues that are directly in contention before another court of concurrent jurisdiction without offending the doctrine of sub judice.
22. In Flower City Limited v Polytanks & Containers Kenya Limited (Insolvency Cause o33 of 2022) [2021] KEHC 34 (KLR) the court stated as follows:
“Where an unjustified insolvency proceeding was presented or pursued, it amounted to an abuse of court process; and an abuse of the unconstrained right to present insolvency proceedings against a company.”
23. Guided by the above, I find that although the petitioner has invoked the Insolvency Act on seemingly legitimate grounds, the present petition is nonetheless an abuse of process as the issues raised are already pending before another court.
24. Consequently, I order that these proceedings be stayed pending the hearing and determination of Nairobi HCCOM E047 of 2022, Pan Wenyong & Chen Lei v Cynthia Atieno Barasa. The costs of this application shall be borne by the petitioner.
25. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
25TH SEPTEMBER 2025
ADO MOSES
JUDGE
In the presence of: -
C/A – Moses
Otinga.……….………..for the Applicant
Aronga..………….…..... for the Respondent
'