1. By a Notice of Motion application dated 28th August 2025, the applicant sought the following orders:
1. Spent;
2. Spent;
3. Spent;
4. Spent;
5. Spent;
6. That pending the hearing of the substantive suit, a temporary order be issued restraining the respondents from taking over the administration and/or management of the applicant’s properties, assets, machinery, stock, equipment or any part thereof or from interfering with the applicant's operations;
7. That pending the hearing and determination of the substantive suit, an order be issued restraining the respondents, either by themselves, their agents, servants and/or representatives from repossessing, advertising, selling, disposing of, offering for sale, or alienating in any manner whatsoever, any of the applicant’s properties, assets, machinery and/or working finance;
8. An order of injunction does issue restraining the Respondents, either by themselves, their agents, servants and/or representatives, from listing the applicant with any Credit Reference institution or from sharing the applicant’s credit information;
9. That an order do issue compelling the 1st Respondent to render true and accurate accounts of all loan accounts and/or facilities taken by the Applicant; and
10. That the applicant and the 1st respondent be directed to jointly undertake the reconciliation of accounts for the loan facility.
2. The applicant is a debtor of the 1st of the 1st respondent. Due to the status of the loan account, the 1st respondent issued a Notice appointing joint administrators of the applicant. The applicant is apprehensive that the said action will prejudice it as its business shall be irreparably damaged.
3. The application was considered by the court on 4th September 2025. The duty court issued temporary relief in terms of prayer 3 of the Notice of Motion dated 28th August 2025. The said orders have been subsisting to date.
4. Upon being served, the 1st respondent filed a preliminary objection dated 16th September 2025 in which it deprecated the filing of the suit on the ground that under section 581 of the Insolvency Petition Act, No.18 of 2015 the applicant ought to have obtained either the leave of the Court or the consent of the joint administrators and that disputes regarding appointment of a receiver ought to be determined in Insolvency Petition No.E001 of 2025 and not via a different suit.
5. On their part, the 2nd, 3rd and 4th Respondents objected to the application on the ground that the suit was bad in law as administrators had already been appointed. They stated that the applicant filed a suit without the consent of the duly appointed administrators and without seeking leave from the court as required under Section 560(1) (d) of the Insolvency Act. They attached documents supporting the contention that the 1st and 2nd respondents were the applicant's administrators.
6. The applicant was canvassed by way of written submissions filed by the parties. As this matter is straightforward, I shall not rehash the arguments made here.
7. It is a common ground that there is an insolvency petition before the Commercial Court in Mombasa. The fact that there is a petition wasn’t disclosed by the applicant in the plaint or in this application. The 1st respondent appointed the 2nd and 3rd respondents as administrators. The appointment was publicized in an advertisement in the Kenya Gazette as well as in the daily newspapers.
8. Despite the appointment of the administrators, the applicant began these proceedings without the leave of the administrators or the court. That action flies in the face of the provision of Section 581 (1) of the Insolvency Act, 2015, which provides that:
“A company under administration, or an officer of a company under administration, shall not perform or exercise a management function without the consent of the administrator.”
9. Section 581 (2)(a) of the Insolvency Act, 2015 defines a management function as being:
"management function" means a function or power that could be performed or exercised so as to interfere with the exercise of the administrator's functions.”
It must be pointed out that the Fourth Schedule of the Insolvency Act states that management action includes the power to bring or defend any action or other legal proceedings in the name or on behalf of the company.
10. The court in Pine Care Ltd v I & M Bank Ltd and another [2022]KEHC 3287(KLR) stated that:
“The applicant is under administration; its director or the advocate purportedly representing it in this application ought then to have obtained leave from the insolvency court to file the application as it is the court seized with jurisdiction, or sought consent from the administrator.”
11. Courts have held in a plethora of decisions that a suit filed without leave is void ab initio (see Midland Energy Ltd v African Banking Corporations Ltd & Another [2020] KEHC 5068 (KLR).
12. In view of the foregoing, it is my view that the Preliminary Objection raised by the 1st defendant has merit. The same is upheld in the result that the suit before the court is struck out with costs to the defendants.
13. Having struck out the suit, therefore, follows that the application dies with it. That being so, there is no need for this court to consider the said application.
14. The orders that therefore commend themselves to me are:
1. The suit filed by the Plaintiff is hereby struck out;
2. The Respondents shall have the costs of the suit and the application; and
3. Interim orders are discharged forthwith.
15. It is so ordered.
Dated and signed at Nairobi, this 3rd day of June 2026.
1. Spent;
2. Spent;
3. Spent;
4. Spent;
5. Spent;
6. That pending the hearing of the substantive suit, a temporary order be issued restraining the respondents from taking over the administration and/or management of the applicant’s properties, assets, machinery, stock, equipment or any part thereof or from interfering with the applicant's operations;
7. That pending the hearing and determination of the substantive suit, an order be issued restraining the respondents, either by themselves, their agents, servants and/or representatives from repossessing, advertising, selling, disposing of, offering for sale, or alienating in any manner whatsoever, any of the applicant’s properties, assets, machinery and/or working finance;
8. An order of injunction does issue restraining the Respondents, either by themselves, their agents, servants and/or representatives, from listing the applicant with any Credit Reference institution or from sharing the applicant’s credit information;
9. That an order do issue compelling the 1st Respondent to render true and accurate accounts of all loan accounts and/or facilities taken by the Applicant; and
10. That the applicant and the 1st respondent be directed to jointly undertake the reconciliation of accounts for the loan facility.
2. The applicant is a debtor of the 1st of the 1st respondent. Due to the status of the loan account, the 1st respondent issued a Notice appointing joint administrators of the applicant. The applicant is apprehensive that the said action will prejudice it as its business shall be irreparably damaged.
3. The application was considered by the court on 4th September 2025. The duty court issued temporary relief in terms of prayer 3 of the Notice of Motion dated 28th August 2025. The said orders have been subsisting to date.
4. Upon being served, the 1st respondent filed a preliminary objection dated 16th September 2025 in which it deprecated the filing of the suit on the ground that under section 581 of the Insolvency Petition Act, No.18 of 2015 the applicant ought to have obtained either the leave of the Court or the consent of the joint administrators and that disputes regarding appointment of a receiver ought to be determined in Insolvency Petition No.E001 of 2025 and not via a different suit.
5. On their part, the 2nd, 3rd and 4th Respondents objected to the application on the ground that the suit was bad in law as administrators had already been appointed. They stated that the applicant filed a suit without the consent of the duly appointed administrators and without seeking leave from the court as required under Section 560(1) (d) of the Insolvency Act. They attached documents supporting the contention that the 1st and 2nd respondents were the applicant's administrators.
6. The applicant was canvassed by way of written submissions filed by the parties. As this matter is straightforward, I shall not rehash the arguments made here.
7. It is a common ground that there is an insolvency petition before the Commercial Court in Mombasa. The fact that there is a petition wasn’t disclosed by the applicant in the plaint or in this application. The 1st respondent appointed the 2nd and 3rd respondents as administrators. The appointment was publicized in an advertisement in the Kenya Gazette as well as in the daily newspapers.
8. Despite the appointment of the administrators, the applicant began these proceedings without the leave of the administrators or the court. That action flies in the face of the provision of Section 581 (1) of the Insolvency Act, 2015, which provides that:
“A company under administration, or an officer of a company under administration, shall not perform or exercise a management function without the consent of the administrator.”
9. Section 581 (2)(a) of the Insolvency Act, 2015 defines a management function as being:
"management function" means a function or power that could be performed or exercised so as to interfere with the exercise of the administrator's functions.”
It must be pointed out that the Fourth Schedule of the Insolvency Act states that management action includes the power to bring or defend any action or other legal proceedings in the name or on behalf of the company.
10. The court in Pine Care Ltd v I & M Bank Ltd and another [2022]KEHC 3287(KLR) stated that:
“The applicant is under administration; its director or the advocate purportedly representing it in this application ought then to have obtained leave from the insolvency court to file the application as it is the court seized with jurisdiction, or sought consent from the administrator.”
11. Courts have held in a plethora of decisions that a suit filed without leave is void ab initio (see Midland Energy Ltd v African Banking Corporations Ltd & Another [2020] KEHC 5068 (KLR).
12. In view of the foregoing, it is my view that the Preliminary Objection raised by the 1st defendant has merit. The same is upheld in the result that the suit before the court is struck out with costs to the defendants.
13. Having struck out the suit, therefore, follows that the application dies with it. That being so, there is no need for this court to consider the said application.
14. The orders that therefore commend themselves to me are:
1. The suit filed by the Plaintiff is hereby struck out;
2. The Respondents shall have the costs of the suit and the application; and
3. Interim orders are discharged forthwith.
15. It is so ordered.
Dated and signed at Nairobi, this 3rd day of June 2026.