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JudgmentInsurance Regulatory Authority VS Xplico Insurance Company Limited (Under Statutory Management)7 min read

Insurance Regulatory Authority VS Xplico Insurance Company Limited (Under Statutory Management)

High Court at Milimani High Court · · Moses Ado

' Introduction
1. The Applicant, John Mutua Katuku, has moved this Court vide his application dated 26th August 2025 seeking the release of attached farm implements namely a tractor, two tractor trailers, a water bowser, and a plough, as well as restitution for livestock seized on 11th August 2025. He contends that the implements are his tools of trade protected under Section 44(1)(ii) of the Civil Procedure Act, and that the sale of livestock was unlawful for want of compliance with the Auctioneers Rules, 1997.

2. On 27th August 2025, this Court issued an order directing that the application be served on all parties and that the same be mentioned on 1st September 2025 for further orders.

3. On 1st September 2025, Ms. Wangui, appearing for the 2nd Intended Interested Party (Respondent in the application dated 26th August 2025), was granted leave to file a response to the application, with the Applicant granted a corresponding leave of response. The parties were also directed to file their respective submissions for an inter-partes hearing of the application on 4th September 2025.

4. In compliance with the directions of the Court, the Respondent filed a replying affidavit dated 1st September 2025, sworn by Anna Mueni Nzolove, the administrator of the estate of Benedict Musyoki Mutemi, deceased. It was deponed that the attachment the subject of this application is in execution of the Judgment in the Machakos CMCC No. 714 of 2017 delivered in favour of the Respondent on 30th March 2021. According to Ms. Mutemi, this Court lacks jurisdiction to entertain the application.

5. The Applicant filed a supplementary submission dated 3rd September, reiterating that the Provisional Liquidator of Xplico Insurance Company Ltd (the Applicant’s insurer) has by letter dated 25th August 2025, admitted their claim, and that parallel execution outside the liquidation process is therefore unlawful and oppressive.

Submissions

6. The Application was canvassed by way of written submissions. Ms. Muli, Counsel for the Applicant, filed her submissions dated 3rd September 2025. Ms. Wangui’s submissions on behalf of the Respondent are equally dated 3rd September 2025.

7. Since the question of jurisdiction was raised by the Respondent, it is critical that the same be dispensed with before venturing into the merits of the case.

8. The 2nd Intended Interested Party/Respondent, in her submissions, argues that this court lacks jurisdiction. She relies on Section 34(1) of the Civil Procedure Act, which states that all questions relating to the execution, discharge, or satisfaction of a decree must be determined by the court that executed the decree. She further cites the Supreme Court''s decision in Samuel Kamau Macharia & another vs. Kenya Commercial Bank Limited & 2 others (2012) eKLR, which affirmed that a court''s jurisdiction flows from either the Constitution or legislation and cannot be arrogated.

9. According to the Respondent, since the decree in question was issued by the Machakos Chief Magistrate''s Court, any issues arising from its execution must be addressed by that court. She also referred to the Court of Appeal decisions in Kuronya Auctioneers vs Maurice O. Odhoch & Another (2003) eKLR and Adiel Muriithi Philip vs Thomas Maingi (2017) eKLR, both of which reinforce the principle that the executing court is the proper forum for such matters.

10. The 1st Intended Interested Party/Applicant, in his submissions, contends that this court has jurisdiction because the application is not merely about execution but is embedded within the liquidation petition, where this court has already issued a stay of execution. He argues that the application raises profound statutory questions, such as the "tools of trade" exemption under Section 44(1)(ii) of the Civil Procedure Act, irregularities under the Auctioneers Act, and the conflict between parallel execution and the liquidation regime.

11. The Applicant asserts that these are complex issues that transcend a simple execution dispute, and cites the case of Chege & another v Ngari (HCCC 3877 of 2025) to support his position that the High Court maintains supervisory jurisdiction over such matters, especially where illegality is alleged or where the High Court has already intervened.
Analysis and Determination
12. I have carefully considered the submissions of both parties. From the rival submissions, the primary issue that arises is whether this Court has jurisdiction to entertain the present application.

13. The answer to the above lies in the interpretation and application of Section 34 of the Civil Procedure Act. Section 34(1) of the Civil Procedure Act provides that all questions relating to execution, discharge, or satisfaction of a decree shall be determined by the Court executing the decree and not by a separate suit. The policy rationale behind this provision is to prevent multiplicity of proceedings and ensure that execution-related disputes are confined to the execution process.

14. From a review of the application, it is evident that the Applicant’s grievances—whether the implements are exempt under Section 44, whether the auction of livestock complied with Rules 12 and 13 of the Auctioneers Rules, and whether the auctioneer’s charges are lawful- are, in substance, execution disputes. They go to the propriety and regularity of attachment and sale in execution of a decree. Such matters fall squarely within Section 34 of the Civil Procedure Act.

15. While the Applicant raises valid points about the nature of the issues, including the "tools of trade" exemption and alleged irregularities, these are all questions that relate directly to the execution of the decree. The law has provided a clear and specific avenue for addressing these grievances, which is the court that issued the decree.

16. The principle of jurisdiction is foundational to the rule of law. As was held by the Supreme Court in the Samuel Kamau Macharia case, a court cannot arrogate to itself jurisdiction it does not possess. This court''s jurisdiction, while broad, is not limitless. Where a specific procedure is prescribed by statute, it must be followed. The Supreme Court in the Samuel Macharia case (supra) stated that:

“68.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. It cannot arrogate to itself jurisdiction exceeding that which is conferred upon it by law. We agree with counsel for the first and second respondents in his submission that the issue as to whether a Court of law has jurisdiction to entertain a matter before it, is not one of mere procedural technicality; it goes to the very heart of the matter, for without jurisdiction, the Court cannot entertain any proceedings. This Court dealt with the question of jurisdiction extensively in, In the Matter of the Interim Independent Electoral Commission (Applicant), Constitutional Application Number 2 of 2011. Where the Constitution exhaustively provides for the jurisdiction of a Court of law, the Court must operate within the constitutional limits. It cannot expand its jurisdiction through judicial craft or innovation. Nor can Parliament confer jurisdiction upon a Court of law beyond the scope defined by the Constitution. Where the Constitution confers power upon Parliament to set the jurisdiction of a Court of law or tribunal, the legislature would be within its authority to prescribe the jurisdiction of such a court or tribunal by statute law."

17. The argument by the Applicant that the matter is "embedded" in the liquidation petition does not confer jurisdiction upon this court to entertain a separate application regarding the execution of a decree from a different court. The High Court''s supervisory power does not serve to circumvent clear statutory procedures.

18. In the premises, I find that the Respondent’s objection to this Court’s jurisdiction is well-founded. The instant application constitutes an abuse of the court’s process. It is even more telling that the Applicant, in its application, failed to join either the Decree Holder or the Auctioneer as parties, yet they are the principal actors against whom the reliefs sought would operate.

19. This Court is persuaded that the instant application could not properly be instituted within these proceedings, which are insolvency proceedings in respect of the insurance company. By its very nature, an insolvency petition is a self-contained process governed by the Insolvency Act 2015 and the Insolvency Regulations 2016. Consequently, any collateral applications unrelated to the insolvency cause cannot be conveniently or lawfully entertained therein.

20. In my view, the proper forum for the applicant''s grievance ought to have been the court that issued the decree, or alternatively, this Court, being the High Court, but on an appeal from the decision of the lower court and not within the Insolvency proceedings as is the case herein.

21. It is settled as per the principle in Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] KLR 1, that jurisdiction is everything and without it, the Court must down its tools. Once it is established that a dispute falls outside the scope of this Court’s jurisdiction, the Court cannot proceed to interrogate the merits of the case.

22. In the circumstances, this Court cannot, therefore, under the guise of liquidation supervision, sit as an execution court to determine disputes relating to attachment, sale of property, or taxation of auctioneer’s charges.

23. Accordingly, the application dated 26th August 2025 by the applicant is hereby dismissed for want of jurisdiction. Given the nature of the proceedings, I direct that each party shall bear its own costs.

24. It is so ordered.

SIGNED DATED and DELIVERED IN VIRTUAL COURT
THIS 4TH SEPTEMBER 2025

ADO MOSES
JUDGE

In the presence of:
Moses – Court Assistant

Ms. Muli ……..for the 1st Interested Party/Applicant
Ms. Wangui.….for the 2nd Interested Party/Respondent
Odongo…………..for the Petitioner
Kairu ……………….for the Respondent

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