1. The scales of justice must balance procedural rigor with substantive fairness. The matter before this Court tests this delicate equilibrium.
2. This ruling resolves a Notice of Preliminary Objection dated 9th May, 2025. The objection was filed by the Respondent, Mediheal Group Limited. It targets a Notice of Motion application dated 8th July, 2024, brought by the Applicant, Trimurti Healthcare Limited.
3. The Applicant approaches this Court seeking a drastic commercial remedy. It prays for an Administration Order against the Respondent. The application is anchored on Sections 530, 531, and 532(1)(c) of the Insolvency Act, 2015.
4. The Applicant avers that it is an unsecured creditor. It claims a debt of Kenya Shillings 42,300,261.35. It argues that the Respondent is insolvent and ripe for administration.
5. The Respondent vehemently opposes this. It seeks to terminate the proceedings in limine. It contends that the Applicant lacks the requisite locus standi. It further argues that the application is fatally defective for want of a statutory demand.
6. A third party has entered the fray. Bank of India, a secured creditor, filed a Notice of Intention to Appear on 22nd July, 2024. The Creditor opposes the Respondent's Preliminary Objection. However, it also disputes the Applicant's core factual premise regarding the identity of the true debtor.
7. The Court is called upon to determine whether this suit should be strangled at birth or allowed to proceed to a full evidentiary hearing.
Background Facts
8. The factual matrix underpinning this dispute is largely drawn from the pleadings on record.
9. The Applicant is a limited liability company incorporated in Kenya. Its principal business is the distribution of pharmaceutical and surgical products. The Respondent is also a limited liability company. It delivers healthcare services through various subsidiaries and branches across the Republic.
10. The Applicant avers that in or around the year 2020, it entered into a contract to supply healthcare goods, machinery, and equipment to the Respondent. The goods were allegedly delivered. Invoices were subsequently raised.
11. The Applicant contends that the Respondent failed to settle these invoices. By February 2024, the accrued debt stood at Kshs. 42,300,261.35.
12. The Applicant pleads a critical factual detail. It alleges that on 1st October, 2023, the Respondent authored a letter acknowledging the outstanding debt. In this letter, the Respondent allegedly admitted its inability to meet financial obligations immediately. It pleaded for a ten-week grace period to finalize a capital injection from a potential investor.
13. The Applicant asserts that this ten-week period lapsed. No payment materialized. Consequently, the Applicant moved this Court on 8th July, 2024, seeking to place the Respondent under administration. The Applicant proposed the appointment of Ponangipalli Venkata Ramana Rao as the Administrator.
14. The proceedings triggered the intervention of Bank of India. On 22nd July, 2024, the Bank filed a Notice of Intention to Appear. The Bank is a formidable secured creditor. As of 19th July, 2024, its exposure to the Respondent and its affiliates stood at Kshs. 920,940,925.07. This is in addition to an overdraft facility of Kshs. 50,000,000.00 and a drawdown of Kshs. 15,000,000.00.
15. The Creditor filed a Replying Affidavit sworn by its Chief Manager, Ramarao Bongani, on 24th September, 2024. The Creditor highlighted a glaring discrepancy. It noted that the invoices annexed by the Applicant were billed to "Mediheal Sourcing Limited," not the Respondent. Mediheal Sourcing Limited is a separate legal entity.
16. On 9th May, 2025, the Respondent filed the present Notice of Preliminary Objection. The Court directed that the objection be canvassed by way of written submissions. The parties complied. The matter is now ripe for determination.
17. The Respondent’s Notice of Preliminary Objection is brief. It is direct. It seeks the summary dismissal of the suit. The grounds are reproduced below:
"TAKE NOTICE that the Respondent will raise a preliminary point of law to be determined in limine, that the Notice of Motion dated 8th July 2024 be dismissed with costs to the Respondent on the grounds that:
1. The Application is superfluous, incompetent, and an abuse of the court process, and the same is fatally defective for want of both procedural and substantive law.
2. The Applicant is not a creditor of the Respondent, and there is no and has never been a statutory demand issued by the Applicant to the Respondent.
3. There is no proof of the Respondent's inability to pay its debts, or in other words, insolvency has not been established by the Applicant as is necessary before an administration order is issued.
4. The Application is, therefore, frivolous, vexatious, an abuse of the court process, incompetent, fatally defective, and does not lie, and it ought to be struck out or dismissed with costs."
18. The Court has carefully perused the written submissions filed by all three parties. The arguments traverse the law on preliminary objections, corporate personality, and statutory insolvency procedures.
Issues for Determination
19. The Court has analysed and considered the Notice of Preliminary Objection, the rival written submissions and the oral highlights by Counsel for the parties. The Court frames a single issue for determination:
a) Whether the Respondent's Notice of Preliminary Objection meets the legal threshold of a pure point of law.
Analysis
20. The leading case on preliminary objections is Mukisa Biscuit Manufacturing Co. Ltd v. West End Distributors Ltd [1969] EA 696. It has been held that a preliminary objection ought to be sustained only if it raises pure points of law. The law regarding preliminary objections is firmly settled in our jurisprudence.
(a) Whether the Respondent's Notice of Preliminary Objection meets the legal threshold of a pure point of law.
21. A preliminary objection is a lethal weapon in civil litigation. If deployed correctly, it brings a swift and fatal end to a suit. Because of its draconian nature, the Courts have circumscribed its use with strict parameters.
22. A preliminary objection must raise a pure point of law. It must be argued on the assumption that all the facts pleaded by the opposing side are correct. It cannot be sustained if it requires the Court to ascertain disputed facts, evaluate evidence, or exercise judicial discretion.
23. Mukisa Biscuit Manufacturing Co. Ltd v. West End Distributors Ltd [1969] EA 696 has stood the test of time. It remains the guiding star for all Courts in this jurisdiction. In that case, Law J.A. expressed himself as follows:
"So far as I am aware, a preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the jurisdiction of the Court, or a plea of limitation, or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration."
24. In the same judgment, Sir Charles Newbold P. issued a stern warning against the misuse of this procedural tool. He stated:
"The first matter relates to the increasing practice of raising points, which should be argued in the normal manner, quite improperly by way of Preliminary Objection. 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. The improper raising of points by way of Preliminary Objection does nothing but unnecessarily increase costs and, on occasion, confuse the issue. The improper practice should stop."
25. The Supreme Court of Kenya has subsequently affirmed these principles. In Aviation & Allied Workers Union Kenya v Kenya Airways Ltd & 3 others [2015] KESC 23 (KLR), the apex Court held that to ascertain whether a point is pure law, the Court must be satisfied that there is no proper contest as to the facts. Similarly, in Joho & another v Shahbal & 2 others [2014] KESC 34 (KLR), the Supreme Court reiterated that an objection must rely on agreed, uncontested facts. There is no conflict between the High Court, the Court of Appeal, and the Supreme Court on this principle. The jurisprudence is unified and unambiguous.
26. Applying this rigorous legal crucible to the Respondent's Notice of Preliminary Objection, the defects become immediately apparent. The Respondent asserts that the Applicant is not a creditor. The Applicant asserts that it is a creditor owed Kshs. 42,300,261.35. The Respondent denies acknowledging the debt. The Applicant pleads that the Respondent acknowledged the debt in a letter dated 1st October, 2023.
27. This is a classic clash of facts. It is not a pure point of law. To uphold the Respondent's objection, this Court would have to reject the Applicant's pleadings, ignore the alleged letter of 1st October, 2023, and make a definitive factual finding on the existence of the debt without the benefit of oral testimony, cross-examination, or a full evidentiary hearing. That is the exact opposite of what a preliminary objection entails.
28. The Respondent's objection is fatally blurred with factual details. It requires the Court to ascertain contested facts. It fails the test set out in Mukisa Biscuits. On this ground alone, the preliminary objection must collapse.
29. The Respondent has raised the issue of locus standi. Once again, the Court is confronted with a dense thicket of contested facts. The Court cannot summarily declare that the Applicant lacks locus standi based on the Salomon vs Salomon principle without first evaluating the evidentiary weight of the 1st October, 2023 letter. The question of whether the Applicant is a creditor of the Respondent requires a substantive hearing. It cannot be resolved via a preliminary objection.
30. On the issue as to whether a Statutory Notice ought to have been issued first, before commencing this Administration proceedings, that can easily be argued and disposed of in the Motion before the Court.
31. The jurisprudence of this Court, backed by the Court of Appeal and the Supreme Court, is unequivocal. A preliminary objection is a shield of law, not a sword of fact. It must stand on the solid ground of uncontested facts. It must raise a pure point of law that is instantly fatal to the opposing party's case.
32. The Respondent’s Notice of Preliminary Objection dated 9th May, 2025, fails this rigorous test on all fronts.
33. First, it invites the Court to determine the highly contested factual issue of whether the Applicant is a creditor. Second, it asks the Court to disregard the Applicant's pleadings regarding an explicit acknowledgment of debt, which requires an evidentiary inquiry into the corporate relationship between the Respondent and Mediheal Sourcing Limited under the Salomon v Salomon doctrine.
34. The improper raising of preliminary objections is a practice that clogs the wheels of justice. It delays the resolution of substantive commercial disputes. It increases costs. As Sir Charles Newbold P. warned over half a century ago in Mukisa Biscuits, this improper practice ought to stop.
35. The Applicant has raised triable issues regarding a substantial debt and the alleged insolvency of the Respondent. These issues demand a full and fair hearing. The Creditor, Bank of India, has also raised valid concerns regarding the identity of the primary debtor and its own massive exposure. All these competing interests must be ventilated in a substantive hearing where evidence can be adduced, tested, and weighed.
36. As to costs, the same lie at the discretion of this Court and ordinarily follow the event. The event herein being that the Respondent has failed to sustain the preliminary objection. It therefore ought to bear the costs.
Determination
37. Having analysed the pleadings, the statutory framework of the Insolvency Act, 2015, and the binding precedents of the superior Courts, this Court arrives at the inevitable conclusion that the Preliminary Objection lacks merit. The Court makes the following orders:
a) The Respondent's Notice of Preliminary Objection
dated 9th May, 2025, is overruled and is HEREBY dismissed in its entirety.
b) The costs of the Preliminary Objection shall be borne by
the Respondent.
c) The substantive Notice of Motion dated 8th July, 2024, shall proceed for hearing on merit.
d) With the creation of the Insolvency Unit within the Commercial & Tax Division of this Court, this matter is referred to the Presiding Judge of the Division for purposes of being allocated to a Judge within the unit. The parties will be notified of the Judge allocated the file through the CTS.
e) In the meantime, the matter will be assigned a mention date within the Insolvency Unit for further directions and fixing of a hearing date of the pending application.
38. It is so ordered.
DATED, SIGNED AND DELIVERED AT MILIMANI THIS 15TH DAY OF SEPTEMBER, 2026
NJOROGE BENJAMIN K.
JUDGE
In the presence of:
Miss Lukoye holding brief for Dr. Nyaundi for the Applicant.
N/A for the Respondent.
N/A for the Creditor.
Mr. John Paul - Court Assistant.
2. This ruling resolves a Notice of Preliminary Objection dated 9th May, 2025. The objection was filed by the Respondent, Mediheal Group Limited. It targets a Notice of Motion application dated 8th July, 2024, brought by the Applicant, Trimurti Healthcare Limited.
3. The Applicant approaches this Court seeking a drastic commercial remedy. It prays for an Administration Order against the Respondent. The application is anchored on Sections 530, 531, and 532(1)(c) of the Insolvency Act, 2015.
4. The Applicant avers that it is an unsecured creditor. It claims a debt of Kenya Shillings 42,300,261.35. It argues that the Respondent is insolvent and ripe for administration.
5. The Respondent vehemently opposes this. It seeks to terminate the proceedings in limine. It contends that the Applicant lacks the requisite locus standi. It further argues that the application is fatally defective for want of a statutory demand.
6. A third party has entered the fray. Bank of India, a secured creditor, filed a Notice of Intention to Appear on 22nd July, 2024. The Creditor opposes the Respondent's Preliminary Objection. However, it also disputes the Applicant's core factual premise regarding the identity of the true debtor.
7. The Court is called upon to determine whether this suit should be strangled at birth or allowed to proceed to a full evidentiary hearing.
Background Facts
8. The factual matrix underpinning this dispute is largely drawn from the pleadings on record.
9. The Applicant is a limited liability company incorporated in Kenya. Its principal business is the distribution of pharmaceutical and surgical products. The Respondent is also a limited liability company. It delivers healthcare services through various subsidiaries and branches across the Republic.
10. The Applicant avers that in or around the year 2020, it entered into a contract to supply healthcare goods, machinery, and equipment to the Respondent. The goods were allegedly delivered. Invoices were subsequently raised.
11. The Applicant contends that the Respondent failed to settle these invoices. By February 2024, the accrued debt stood at Kshs. 42,300,261.35.
12. The Applicant pleads a critical factual detail. It alleges that on 1st October, 2023, the Respondent authored a letter acknowledging the outstanding debt. In this letter, the Respondent allegedly admitted its inability to meet financial obligations immediately. It pleaded for a ten-week grace period to finalize a capital injection from a potential investor.
13. The Applicant asserts that this ten-week period lapsed. No payment materialized. Consequently, the Applicant moved this Court on 8th July, 2024, seeking to place the Respondent under administration. The Applicant proposed the appointment of Ponangipalli Venkata Ramana Rao as the Administrator.
14. The proceedings triggered the intervention of Bank of India. On 22nd July, 2024, the Bank filed a Notice of Intention to Appear. The Bank is a formidable secured creditor. As of 19th July, 2024, its exposure to the Respondent and its affiliates stood at Kshs. 920,940,925.07. This is in addition to an overdraft facility of Kshs. 50,000,000.00 and a drawdown of Kshs. 15,000,000.00.
15. The Creditor filed a Replying Affidavit sworn by its Chief Manager, Ramarao Bongani, on 24th September, 2024. The Creditor highlighted a glaring discrepancy. It noted that the invoices annexed by the Applicant were billed to "Mediheal Sourcing Limited," not the Respondent. Mediheal Sourcing Limited is a separate legal entity.
16. On 9th May, 2025, the Respondent filed the present Notice of Preliminary Objection. The Court directed that the objection be canvassed by way of written submissions. The parties complied. The matter is now ripe for determination.
17. The Respondent’s Notice of Preliminary Objection is brief. It is direct. It seeks the summary dismissal of the suit. The grounds are reproduced below:
"TAKE NOTICE that the Respondent will raise a preliminary point of law to be determined in limine, that the Notice of Motion dated 8th July 2024 be dismissed with costs to the Respondent on the grounds that:
1. The Application is superfluous, incompetent, and an abuse of the court process, and the same is fatally defective for want of both procedural and substantive law.
2. The Applicant is not a creditor of the Respondent, and there is no and has never been a statutory demand issued by the Applicant to the Respondent.
3. There is no proof of the Respondent's inability to pay its debts, or in other words, insolvency has not been established by the Applicant as is necessary before an administration order is issued.
4. The Application is, therefore, frivolous, vexatious, an abuse of the court process, incompetent, fatally defective, and does not lie, and it ought to be struck out or dismissed with costs."
18. The Court has carefully perused the written submissions filed by all three parties. The arguments traverse the law on preliminary objections, corporate personality, and statutory insolvency procedures.
Issues for Determination
19. The Court has analysed and considered the Notice of Preliminary Objection, the rival written submissions and the oral highlights by Counsel for the parties. The Court frames a single issue for determination:
a) Whether the Respondent's Notice of Preliminary Objection meets the legal threshold of a pure point of law.
Analysis
20. The leading case on preliminary objections is Mukisa Biscuit Manufacturing Co. Ltd v. West End Distributors Ltd [1969] EA 696. It has been held that a preliminary objection ought to be sustained only if it raises pure points of law. The law regarding preliminary objections is firmly settled in our jurisprudence.
(a) Whether the Respondent's Notice of Preliminary Objection meets the legal threshold of a pure point of law.
21. A preliminary objection is a lethal weapon in civil litigation. If deployed correctly, it brings a swift and fatal end to a suit. Because of its draconian nature, the Courts have circumscribed its use with strict parameters.
22. A preliminary objection must raise a pure point of law. It must be argued on the assumption that all the facts pleaded by the opposing side are correct. It cannot be sustained if it requires the Court to ascertain disputed facts, evaluate evidence, or exercise judicial discretion.
23. Mukisa Biscuit Manufacturing Co. Ltd v. West End Distributors Ltd [1969] EA 696 has stood the test of time. It remains the guiding star for all Courts in this jurisdiction. In that case, Law J.A. expressed himself as follows:
"So far as I am aware, a preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the jurisdiction of the Court, or a plea of limitation, or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration."
24. In the same judgment, Sir Charles Newbold P. issued a stern warning against the misuse of this procedural tool. He stated:
"The first matter relates to the increasing practice of raising points, which should be argued in the normal manner, quite improperly by way of Preliminary Objection. 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. The improper raising of points by way of Preliminary Objection does nothing but unnecessarily increase costs and, on occasion, confuse the issue. The improper practice should stop."
25. The Supreme Court of Kenya has subsequently affirmed these principles. In Aviation & Allied Workers Union Kenya v Kenya Airways Ltd & 3 others [2015] KESC 23 (KLR), the apex Court held that to ascertain whether a point is pure law, the Court must be satisfied that there is no proper contest as to the facts. Similarly, in Joho & another v Shahbal & 2 others [2014] KESC 34 (KLR), the Supreme Court reiterated that an objection must rely on agreed, uncontested facts. There is no conflict between the High Court, the Court of Appeal, and the Supreme Court on this principle. The jurisprudence is unified and unambiguous.
26. Applying this rigorous legal crucible to the Respondent's Notice of Preliminary Objection, the defects become immediately apparent. The Respondent asserts that the Applicant is not a creditor. The Applicant asserts that it is a creditor owed Kshs. 42,300,261.35. The Respondent denies acknowledging the debt. The Applicant pleads that the Respondent acknowledged the debt in a letter dated 1st October, 2023.
27. This is a classic clash of facts. It is not a pure point of law. To uphold the Respondent's objection, this Court would have to reject the Applicant's pleadings, ignore the alleged letter of 1st October, 2023, and make a definitive factual finding on the existence of the debt without the benefit of oral testimony, cross-examination, or a full evidentiary hearing. That is the exact opposite of what a preliminary objection entails.
28. The Respondent's objection is fatally blurred with factual details. It requires the Court to ascertain contested facts. It fails the test set out in Mukisa Biscuits. On this ground alone, the preliminary objection must collapse.
29. The Respondent has raised the issue of locus standi. Once again, the Court is confronted with a dense thicket of contested facts. The Court cannot summarily declare that the Applicant lacks locus standi based on the Salomon vs Salomon principle without first evaluating the evidentiary weight of the 1st October, 2023 letter. The question of whether the Applicant is a creditor of the Respondent requires a substantive hearing. It cannot be resolved via a preliminary objection.
30. On the issue as to whether a Statutory Notice ought to have been issued first, before commencing this Administration proceedings, that can easily be argued and disposed of in the Motion before the Court.
31. The jurisprudence of this Court, backed by the Court of Appeal and the Supreme Court, is unequivocal. A preliminary objection is a shield of law, not a sword of fact. It must stand on the solid ground of uncontested facts. It must raise a pure point of law that is instantly fatal to the opposing party's case.
32. The Respondent’s Notice of Preliminary Objection dated 9th May, 2025, fails this rigorous test on all fronts.
33. First, it invites the Court to determine the highly contested factual issue of whether the Applicant is a creditor. Second, it asks the Court to disregard the Applicant's pleadings regarding an explicit acknowledgment of debt, which requires an evidentiary inquiry into the corporate relationship between the Respondent and Mediheal Sourcing Limited under the Salomon v Salomon doctrine.
34. The improper raising of preliminary objections is a practice that clogs the wheels of justice. It delays the resolution of substantive commercial disputes. It increases costs. As Sir Charles Newbold P. warned over half a century ago in Mukisa Biscuits, this improper practice ought to stop.
35. The Applicant has raised triable issues regarding a substantial debt and the alleged insolvency of the Respondent. These issues demand a full and fair hearing. The Creditor, Bank of India, has also raised valid concerns regarding the identity of the primary debtor and its own massive exposure. All these competing interests must be ventilated in a substantive hearing where evidence can be adduced, tested, and weighed.
36. As to costs, the same lie at the discretion of this Court and ordinarily follow the event. The event herein being that the Respondent has failed to sustain the preliminary objection. It therefore ought to bear the costs.
Determination
37. Having analysed the pleadings, the statutory framework of the Insolvency Act, 2015, and the binding precedents of the superior Courts, this Court arrives at the inevitable conclusion that the Preliminary Objection lacks merit. The Court makes the following orders:
a) The Respondent's Notice of Preliminary Objection
dated 9th May, 2025, is overruled and is HEREBY dismissed in its entirety.
b) The costs of the Preliminary Objection shall be borne by
the Respondent.
c) The substantive Notice of Motion dated 8th July, 2024, shall proceed for hearing on merit.
d) With the creation of the Insolvency Unit within the Commercial & Tax Division of this Court, this matter is referred to the Presiding Judge of the Division for purposes of being allocated to a Judge within the unit. The parties will be notified of the Judge allocated the file through the CTS.
e) In the meantime, the matter will be assigned a mention date within the Insolvency Unit for further directions and fixing of a hearing date of the pending application.
38. It is so ordered.
DATED, SIGNED AND DELIVERED AT MILIMANI THIS 15TH DAY OF SEPTEMBER, 2026
NJOROGE BENJAMIN K.
JUDGE
In the presence of:
Miss Lukoye holding brief for Dr. Nyaundi for the Applicant.
N/A for the Respondent.
N/A for the Creditor.
Mr. John Paul - Court Assistant.