1. Before this Court for determination is the Respondent’s Notice of Preliminary Objection dated 7th November 2025. The Objection challenges the competence of the present liquidation proceedings against Everest Enterprises Limited and John Karuga on several grounds, namely: failure to serve a statutory demand; the doctrine of sub judice under section 6 of the Civil Procedure Act asserting that a dispute is pending before Milimani CMCC No. E2306 of 2024, Jaav Global Cargo Ltd v Everest Enterprises Ltd; the existence of a disputed debt; misjoinder of John Karuga; and the legal capacity of the Petitioner.
2. I have considered the Preliminary Objection, the Petitioner’s response, the respective written submissions and authorities cited by the parties.
Background
3. The Petitioner commenced these insolvency proceedings against Everest Enterprises Limited and John Karuga seeking, inter alia, the liquidation of the company on the ground that it is unable to pay a debt allegedly due and owing to the Petitioner.
4. The Respondents subsequently lodged the Notice of Preliminary Objection dated 7th November 2025, contending that the proceedings are incompetent and ought to be struck out or dismissed with costs.
Respondent’s case
5. The Respondents contend that John Karuga has been improperly joined to the proceedings. They contend that Everest Enterprises Limited is a body corporate with a legal personality separate and distinct from its directors and shareholders. Since no order lifting or piercing the corporate veil has been sought or obtained, they submit that there is no legal basis for pursuing John Karuga personally in these liquidation proceedings.
6. The Respondents also contend that no statutory demand was served upon Everest Enterprises Limited as contemplated under section 384(1)(a) of the Insolvency Act, 2015. They argue that service of a statutory demand is a prerequisite where inability to pay is founded upon that statutory provision and that the alleged failure to effect service renders the proceedings premature and incompetent
7. Further, the Respondents invoke the doctrine of sub judice under Section 6 of the Civil Procedure Act. They contend that the same parties, subject matter, and issues are directly and substantially in issue in a pending matter before the Chief Magistrate's Court at Milimani Commercial Courts in MCCC/E2306/2024, - Jaav Global Cargo Ltd v Everest Enterprises Ltd. In support of that contention, they rely upon the Plaint dated 2nd May 2024 and a Hearing Notice dated 15th July 2025 showing that the suit had been fixed for hearing on 18th November 2025.
8. The Respondents further contend that the alleged debt is seriously disputed. The Respondents point out that Everest Enterprises Limited has lodged a counterclaim in the lower court proceedings for USD 10,000 together with special and aggravated damages and costs. They consequently submit that liquidation proceedings should not be employed as an alternative mechanism for determining a genuinely disputed debt.
9. The Respondents challenge the legal capacity of the Petitioner. They contend that whereas the party before this Court is described as “Jaav Global Limited”, the claimant in the lower court proceedings is “Jaav Global Cargo Limited”. According to the Respondents, no evidence has been placed before the Court establishing the existence of Jaav Global Limited or demonstrating that the two names refer to the same legal entity
10. On those grounds, the Respondents urge this Court to uphold the Preliminary Objection, strike out or dismiss the Petition, and award costs to the Respondents.
Petitioner's case
11. The Petitioner opposes the Preliminary Objection. It is contended that John Karuga was personally and actively involved in the transactions giving rise to the alleged debt and allegedly used Everest Enterprises Ltd as a façade to avoid personal liability. The Petitioner submits that his conduct amounts to fraudulent or wrongful trading under Sections 505 and 506 of the Insolvency Act, 2015, thereby justifying the lifting of the corporate veil and the institution of insolvency proceedings against him personally.
12. The Petitioner relies on the locus classicus case of Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696 and argues that the Objection raises contested factual matters, including service of the statutory demand, the identity of the Petitioner, and whether the debt is genuinely disputed, all of which require evidential inquiry and therefore cannot properly be determined as pure points of law.
13. The Petitioner contends that MCCC E2306 of 2024 is an ordinary civil claim for recovery of a debt, whereas the present proceedings concern insolvency and inability to pay debts. The requirements of Section 6 of the Civil Procedure Act are not satisfied, and that, in any event, the plea requires examination of evidence and ought to have been raised by a substantive application rather than a preliminary objection.
14. The Petitioner accordingly urges this Court to dismiss the Preliminary Objection dated 7th November 2025 with costs.
Analysis and determination
15. Having considered the Objection, the response thereto, and the submissions of both parties, the issue for determination is whether the P.O is merited.
16. The law governing preliminary objections is settled. In Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696, Sir Charles Newbold P. stated:
“A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion.”
17. A preliminary objection, correctly understood, is now well identified as, and declared to be, a point of law which must not be blurred with factual details liable to be contested and, in any event, to be proved through the processes of evidence (See Oraro v Mbaja [2005] KEHC 3182 (KLR).
18. Applying these principles, although the Respondents present their objection as involving legal questions about corporate separate personality, disputed debt, statutory demand service, and the Petitioner’s legal capacity, the resolution depends on disputed facts. While Salomon v A Salomon & Co Ltd [1897] AC 22 confirms a company's separate legal identity, the Petitioner claims personal involvement and fraudulent or wrongful trading by John Karuga, which can only be proven through evidence. Likewise, establishing whether the statutory demand was properly served, if the proceedings are sub judice in Milimani CMCC No. E2306 of 2024, whether the debt is genuinely contested on substantial grounds, and if “Jaav Global Limited” and “Jaav Global Cargo Limited” are separate entities, requires review of pleadings, service documents, transactions, and corporate records. These issues thus require evidence and cannot be resolved as straightforward points of law.
19. It follows that the Preliminary Objection, though couched as one challenging the competence and jurisdiction of the Court, does not satisfy the threshold of a pure point of law. Its determination would require the Court to interrogate contested evidence and make findings of fact, an exercise that falls outside the proper province of a preliminary objection.
20. Accordingly, I find that the Preliminary Objection dated 7th November 2025 is without merit and is hereby dismissed.
21. The costs of the Preliminary Objection shall abide the outcome of the insolvency proceedings.
22. This Ruling shall apply to HCOMMIP No. E033 of 2025.
It is so ordered.
RULING delivered virtually, dated and signed at NAIROBI
This 1st day of September 2026.
PETER M. MULWA
JUDGE
In the presence of:
Ms. Mutuku for Petitioner
Court Assistant: Sharon
2. I have considered the Preliminary Objection, the Petitioner’s response, the respective written submissions and authorities cited by the parties.
Background
3. The Petitioner commenced these insolvency proceedings against Everest Enterprises Limited and John Karuga seeking, inter alia, the liquidation of the company on the ground that it is unable to pay a debt allegedly due and owing to the Petitioner.
4. The Respondents subsequently lodged the Notice of Preliminary Objection dated 7th November 2025, contending that the proceedings are incompetent and ought to be struck out or dismissed with costs.
Respondent’s case
5. The Respondents contend that John Karuga has been improperly joined to the proceedings. They contend that Everest Enterprises Limited is a body corporate with a legal personality separate and distinct from its directors and shareholders. Since no order lifting or piercing the corporate veil has been sought or obtained, they submit that there is no legal basis for pursuing John Karuga personally in these liquidation proceedings.
6. The Respondents also contend that no statutory demand was served upon Everest Enterprises Limited as contemplated under section 384(1)(a) of the Insolvency Act, 2015. They argue that service of a statutory demand is a prerequisite where inability to pay is founded upon that statutory provision and that the alleged failure to effect service renders the proceedings premature and incompetent
7. Further, the Respondents invoke the doctrine of sub judice under Section 6 of the Civil Procedure Act. They contend that the same parties, subject matter, and issues are directly and substantially in issue in a pending matter before the Chief Magistrate's Court at Milimani Commercial Courts in MCCC/E2306/2024, - Jaav Global Cargo Ltd v Everest Enterprises Ltd. In support of that contention, they rely upon the Plaint dated 2nd May 2024 and a Hearing Notice dated 15th July 2025 showing that the suit had been fixed for hearing on 18th November 2025.
8. The Respondents further contend that the alleged debt is seriously disputed. The Respondents point out that Everest Enterprises Limited has lodged a counterclaim in the lower court proceedings for USD 10,000 together with special and aggravated damages and costs. They consequently submit that liquidation proceedings should not be employed as an alternative mechanism for determining a genuinely disputed debt.
9. The Respondents challenge the legal capacity of the Petitioner. They contend that whereas the party before this Court is described as “Jaav Global Limited”, the claimant in the lower court proceedings is “Jaav Global Cargo Limited”. According to the Respondents, no evidence has been placed before the Court establishing the existence of Jaav Global Limited or demonstrating that the two names refer to the same legal entity
10. On those grounds, the Respondents urge this Court to uphold the Preliminary Objection, strike out or dismiss the Petition, and award costs to the Respondents.
Petitioner's case
11. The Petitioner opposes the Preliminary Objection. It is contended that John Karuga was personally and actively involved in the transactions giving rise to the alleged debt and allegedly used Everest Enterprises Ltd as a façade to avoid personal liability. The Petitioner submits that his conduct amounts to fraudulent or wrongful trading under Sections 505 and 506 of the Insolvency Act, 2015, thereby justifying the lifting of the corporate veil and the institution of insolvency proceedings against him personally.
12. The Petitioner relies on the locus classicus case of Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696 and argues that the Objection raises contested factual matters, including service of the statutory demand, the identity of the Petitioner, and whether the debt is genuinely disputed, all of which require evidential inquiry and therefore cannot properly be determined as pure points of law.
13. The Petitioner contends that MCCC E2306 of 2024 is an ordinary civil claim for recovery of a debt, whereas the present proceedings concern insolvency and inability to pay debts. The requirements of Section 6 of the Civil Procedure Act are not satisfied, and that, in any event, the plea requires examination of evidence and ought to have been raised by a substantive application rather than a preliminary objection.
14. The Petitioner accordingly urges this Court to dismiss the Preliminary Objection dated 7th November 2025 with costs.
Analysis and determination
15. Having considered the Objection, the response thereto, and the submissions of both parties, the issue for determination is whether the P.O is merited.
16. The law governing preliminary objections is settled. In Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696, Sir Charles Newbold P. stated:
“A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion.”
17. A preliminary objection, correctly understood, is now well identified as, and declared to be, a point of law which must not be blurred with factual details liable to be contested and, in any event, to be proved through the processes of evidence (See Oraro v Mbaja [2005] KEHC 3182 (KLR).
18. Applying these principles, although the Respondents present their objection as involving legal questions about corporate separate personality, disputed debt, statutory demand service, and the Petitioner’s legal capacity, the resolution depends on disputed facts. While Salomon v A Salomon & Co Ltd [1897] AC 22 confirms a company's separate legal identity, the Petitioner claims personal involvement and fraudulent or wrongful trading by John Karuga, which can only be proven through evidence. Likewise, establishing whether the statutory demand was properly served, if the proceedings are sub judice in Milimani CMCC No. E2306 of 2024, whether the debt is genuinely contested on substantial grounds, and if “Jaav Global Limited” and “Jaav Global Cargo Limited” are separate entities, requires review of pleadings, service documents, transactions, and corporate records. These issues thus require evidence and cannot be resolved as straightforward points of law.
19. It follows that the Preliminary Objection, though couched as one challenging the competence and jurisdiction of the Court, does not satisfy the threshold of a pure point of law. Its determination would require the Court to interrogate contested evidence and make findings of fact, an exercise that falls outside the proper province of a preliminary objection.
20. Accordingly, I find that the Preliminary Objection dated 7th November 2025 is without merit and is hereby dismissed.
21. The costs of the Preliminary Objection shall abide the outcome of the insolvency proceedings.
22. This Ruling shall apply to HCOMMIP No. E033 of 2025.
It is so ordered.
RULING delivered virtually, dated and signed at NAIROBI
This 1st day of September 2026.
PETER M. MULWA
JUDGE
In the presence of:
Ms. Mutuku for Petitioner
Court Assistant: Sharon