RULING
This ruling is in respect of the Plaintiff/Applicant’s Notice of Motion application dated 24th October, 2025 which seeks the following orders:
a. THAT the Defendant’s counter-claim has become incompetent and legally untenable pursuant to orders issued in NAIROBI HIGH COURT INSOLVENCY NOTICE NO E012 OF 2018 on the 18th March 2021 which inter alia terminated and revoked the appointment of the Administrators of the Defendant.
b. THAT the Defendant’s counter-claim be struck out and/or dismissed as the same was instituted on behalf of the Defendant by Administrators whose appointment has been rendered void and revoked.
c. THAT cost of this Application be provided for.
The application is supported by the annexed affidavit of Talasam Mohammed, the Plaintiff/Applicant’s property manager sworn on 24th October, 2025. He deponed that the instant suit was instituted on 6th February, 2019 and the Defendant which was under administration filed a defence and a counter-claim through its appointed administrators who were M/s Peter Kahi and Atul Shah.
The Plaintiff’s property manager further deponed that the High Court at Nairobi in NAIROBI HIGH COURT INSOLVENCY NOTICE NO E012 OF 2018 issued orders on 18th March 2021 which nullified and revoked the appointment of the said administrators for reasons that their appointment was not in conformity with provisions of the law.
He deponed that the effect of the said orders renders the counterclaim as legally incompetent as it was instituted by the defunct administrators and given that it was instituted by the Defendant in its status of being under administration. He asked that the counterclaim be dismissed. The Plaintiff’s property manager also asked that the counterclaim be struck out.
The Defendant filed Grounds of Opposition dated 2nd February, 2026. It stated that the application is an abuse of court process and should be dismissed with costs.
PLAINTIFF/APPLICANT’S SUBMISSIONS
Mr. Hassan, counsel for the Plaintiff filed submissions dated 18th February, 2026. Counsel submitted that the effect of declaring the entire administration process and the appointment of the Administrators a nullity had the legal effect of rendering void all actions undertaken by the Administrators during the administration process. Counsel submitted that that the action of filing the counterclaim by the joint administrators was a nullity. Counsel relied on Sections 576 and 581 (1) of the Insolvency Act and the case of Republic vs Chengo & 2 others [2017] KESC 15 (KLR). Counsel asked the court to find the application merited and allow the same with costs.
DEFENDANT/RESPONDENT’S SUBMISSIONS
Mr. Ngoze, counsel for the Defendant/Respondent filed submissions dated 2nd March, 2026. Counsel submitted that the Plaintiff has not sufficiently made out a prima-facie case to warrant granting of the prayers sought in the Notice of Motion application dated 24th October, 2025.
Counsel relied on the following cases: DT Dobie & Company (Kenya) Limited vs Muchina & Another (Civil Appeal 37 of 1978) [1980] KECA 3 (KLR), Tahir Sheikh Said vs Professor Abdalla Said Burja (Malindi HCC 5/2008) 2011 eKLR, Benjamin Leonard MC FOY Vs United Africa Company Limited [1961] ALL ER 1169, Osapil vs Kaddu (2001) EA 193 and Cecilia Karuru Ngayu vs Barclays Bank of Kenya & Another (2016) eKLR.
ANALYSIS AND DETERMINATION
The issue for determination is whether the Defendant’s counterclaim should be struck out. It is the Plaintiff/Applicant’s contention that the Defendant which was under administration filed a defence and a counter-claim through its appointed administrators who were M/s Peter Kahi and Atul Shah. The applicant contends that the High Court at Nairobi HIGH COURT INSOLVENCY NOTICE NO E012 OF 2018 issued orders on 18th March 2021 which nullified and revoked the appointment of the said administrators for reasons that their appointment was not in conformity with provisions of the law. The applicant contends that the orders renders the counterclaim as legally incompetent. The Defendant/Respondent on the other hand in its submissions contends that it has preferred an Appeal being NAIROBI COA E144 of 2023 which is yet to be determined.
This court notes that under annexure marked D in the affidavit supporting the Notice of Motion Application is a court order from the High Court which stipulates: THAT an order be and is hereby issued terminating/revoking in toto the appointment of the Joint Administrators herein dated 23rd November 2018 in regard to Deacons (East Africa) PLC.
In the case of Shangavi & another; Gadhoke (Interested Party) [2023] KEHC 21450 (KLR) the court pronounced as follows:
18. Can it therefore be said that the proceedings became fatally defective and a nullity by virtue of the interested party losing his status as Administrator? I do not think so. I will compare the proceedings to a suit which is properly filed by a natural person who then expires during its pendency. such suit does not become a nullity but only abates if for a period of time there is no substitution of the expired party.
19. In the present case, the Interested party was clothed with the locus standi to institute the proceedings. He only lost that status by efflux of time. All that happened is that the proceedings remain in limbo and have no one to prosecute them until one with locus emerges. [Emphasis mine]
This court has looked at annexure C which is a ruling of the High Court dated 8th October, 2020 in respect of Insolvency Notice No E012 OF 2018. The court pronounced as follows at paragraph 16: “For the reason that the said appointment contravened the provisions of Section 545 (3) of the Act, I cannot hesitate but find that the said appointment was in law a nullity and is therefore void.”
This therefore means that the Joint administrators did not have locus-standi at the time of filing the counterclaim. The Defendant/Respondent has indicated that an appeal has been filed but he has not adduced any orders from the Court of Appeal. Consequently, I find that the Notice of Motion application dated 24th October 2025 to be merited and I therefore issue the following orders:
a. The Defendant’s counter-claim dated 13th March, 2029 is hereby struck out.
b. Each party shall bear their own costs.
This ruling is in respect of the Plaintiff/Applicant’s Notice of Motion application dated 24th October, 2025 which seeks the following orders:
a. THAT the Defendant’s counter-claim has become incompetent and legally untenable pursuant to orders issued in NAIROBI HIGH COURT INSOLVENCY NOTICE NO E012 OF 2018 on the 18th March 2021 which inter alia terminated and revoked the appointment of the Administrators of the Defendant.
b. THAT the Defendant’s counter-claim be struck out and/or dismissed as the same was instituted on behalf of the Defendant by Administrators whose appointment has been rendered void and revoked.
c. THAT cost of this Application be provided for.
The application is supported by the annexed affidavit of Talasam Mohammed, the Plaintiff/Applicant’s property manager sworn on 24th October, 2025. He deponed that the instant suit was instituted on 6th February, 2019 and the Defendant which was under administration filed a defence and a counter-claim through its appointed administrators who were M/s Peter Kahi and Atul Shah.
The Plaintiff’s property manager further deponed that the High Court at Nairobi in NAIROBI HIGH COURT INSOLVENCY NOTICE NO E012 OF 2018 issued orders on 18th March 2021 which nullified and revoked the appointment of the said administrators for reasons that their appointment was not in conformity with provisions of the law.
He deponed that the effect of the said orders renders the counterclaim as legally incompetent as it was instituted by the defunct administrators and given that it was instituted by the Defendant in its status of being under administration. He asked that the counterclaim be dismissed. The Plaintiff’s property manager also asked that the counterclaim be struck out.
The Defendant filed Grounds of Opposition dated 2nd February, 2026. It stated that the application is an abuse of court process and should be dismissed with costs.
PLAINTIFF/APPLICANT’S SUBMISSIONS
Mr. Hassan, counsel for the Plaintiff filed submissions dated 18th February, 2026. Counsel submitted that the effect of declaring the entire administration process and the appointment of the Administrators a nullity had the legal effect of rendering void all actions undertaken by the Administrators during the administration process. Counsel submitted that that the action of filing the counterclaim by the joint administrators was a nullity. Counsel relied on Sections 576 and 581 (1) of the Insolvency Act and the case of Republic vs Chengo & 2 others [2017] KESC 15 (KLR). Counsel asked the court to find the application merited and allow the same with costs.
DEFENDANT/RESPONDENT’S SUBMISSIONS
Mr. Ngoze, counsel for the Defendant/Respondent filed submissions dated 2nd March, 2026. Counsel submitted that the Plaintiff has not sufficiently made out a prima-facie case to warrant granting of the prayers sought in the Notice of Motion application dated 24th October, 2025.
Counsel relied on the following cases: DT Dobie & Company (Kenya) Limited vs Muchina & Another (Civil Appeal 37 of 1978) [1980] KECA 3 (KLR), Tahir Sheikh Said vs Professor Abdalla Said Burja (Malindi HCC 5/2008) 2011 eKLR, Benjamin Leonard MC FOY Vs United Africa Company Limited [1961] ALL ER 1169, Osapil vs Kaddu (2001) EA 193 and Cecilia Karuru Ngayu vs Barclays Bank of Kenya & Another (2016) eKLR.
ANALYSIS AND DETERMINATION
The issue for determination is whether the Defendant’s counterclaim should be struck out. It is the Plaintiff/Applicant’s contention that the Defendant which was under administration filed a defence and a counter-claim through its appointed administrators who were M/s Peter Kahi and Atul Shah. The applicant contends that the High Court at Nairobi HIGH COURT INSOLVENCY NOTICE NO E012 OF 2018 issued orders on 18th March 2021 which nullified and revoked the appointment of the said administrators for reasons that their appointment was not in conformity with provisions of the law. The applicant contends that the orders renders the counterclaim as legally incompetent. The Defendant/Respondent on the other hand in its submissions contends that it has preferred an Appeal being NAIROBI COA E144 of 2023 which is yet to be determined.
This court notes that under annexure marked D in the affidavit supporting the Notice of Motion Application is a court order from the High Court which stipulates: THAT an order be and is hereby issued terminating/revoking in toto the appointment of the Joint Administrators herein dated 23rd November 2018 in regard to Deacons (East Africa) PLC.
In the case of Shangavi & another; Gadhoke (Interested Party) [2023] KEHC 21450 (KLR) the court pronounced as follows:
18. Can it therefore be said that the proceedings became fatally defective and a nullity by virtue of the interested party losing his status as Administrator? I do not think so. I will compare the proceedings to a suit which is properly filed by a natural person who then expires during its pendency. such suit does not become a nullity but only abates if for a period of time there is no substitution of the expired party.
19. In the present case, the Interested party was clothed with the locus standi to institute the proceedings. He only lost that status by efflux of time. All that happened is that the proceedings remain in limbo and have no one to prosecute them until one with locus emerges. [Emphasis mine]
This court has looked at annexure C which is a ruling of the High Court dated 8th October, 2020 in respect of Insolvency Notice No E012 OF 2018. The court pronounced as follows at paragraph 16: “For the reason that the said appointment contravened the provisions of Section 545 (3) of the Act, I cannot hesitate but find that the said appointment was in law a nullity and is therefore void.”
This therefore means that the Joint administrators did not have locus-standi at the time of filing the counterclaim. The Defendant/Respondent has indicated that an appeal has been filed but he has not adduced any orders from the Court of Appeal. Consequently, I find that the Notice of Motion application dated 24th October 2025 to be merited and I therefore issue the following orders:
a. The Defendant’s counter-claim dated 13th March, 2029 is hereby struck out.
b. Each party shall bear their own costs.