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Court of AppealOtherBankruptcy and Winding Up Cause No. 5 of 2005· [2006] KECA 323 (KLR)

Kenya Ports Authority v Amarco (Kenya) Ltd

High Court of Kenya (Bankruptcy and Winding Up Cause, Mombasa)
24 February 2006
JSJ. K. Sergon
1,218 words in judgment
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The bottom line

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A Kenyan court struck out a defective verifying affidavit but let the winding up petition continue, showing procedural defects can usually be cured.

What this practically means

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Executive summary

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This ruling by Sergon J in the Bankruptcy and Winding Up Cause at Mombasa disposes of a preliminary objection dated 9th January 2006 raised by Amarco (Kenya) Ltd against a winding up petition presented by the Kenya Ports Authority. The company argued that the petition was fatally defective because the verifying affidavit of Raha Mwambela Jilo failed to disclose his true place of abode and the sources of his information and belief, contrary to Order XVIII rules 3(1) and 4 of the Civil Procedure Rules, and that the petition had not been served in accordance with rule 24 of the Winding Up Rules, having allegedly been left with an unauthorised person, Anastasia Gitau. The court held that service was proved by the affidavit of Bernard Mwanzia, reasoning that the company could not disown receipt acknowledged with its official stamp, and that the company did not deny that Mr. Mwangi was its legal officer. On the affidavit, the court adopted rule 203 of the Winding Up Rules to import the Civil Procedure Rules, followed the East African Court of Appeal decision in Premchand Raichand v Quarry Services, and struck out the verifying affidavit as incurably defective. However, invoking the court's inherent power, it granted the petitioner two days' leave to file and serve a fresh verifying affidavit, so the petition survived. Costs of the objection were made to abide the outcome of the petition.

Key legal issues

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01

Service of the winding up petition

Holding

Service on the company's legal officer, evidenced by the company stamp, was valid service notwithstanding the objection that the recipient was unauthorised

Reasoning

The court found the company could not disown service where its official stamp acknowledged receipt, and where it did not deny that Mr. Mwangi was its legal officer. The deponent Anastasia Gitau was found not candid in her affidavit.

p. 2
02

Defective verifying affidavit

Holding

The verifying affidavit was incurably defective for non-disclosure of source of information and place of abode and was struck out

Reasoning

Applying Order XVIII rules 3(1) and 4 of the Civil Procedure Rules, made applicable by rule 203 of the Winding Up Rules, and the East African Court of Appeal authority in Premchand Raichand, the court held the defects went to the essential value of the affidavit.

p. 2
03

Effect of striking out the verifying affidavit on the petition

Holding

The petition is not rendered defective; the court may grant leave to file a fresh verifying affidavit within a set time

Reasoning

Rule 25 requires a petition to be verified, but the court invoked its inherent power to permit the petitioner to cure the defect by filing another verifying affidavit within two days rather than striking out the petition itself.

p. 3

Legal principles established

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  • An affidavit based on information and belief must disclose the source of the information, failing which it has no evidential value
  • An affidavit not complying with Order XVIII rules 3(1) and 4 of the Civil Procedure Rules is incurably defective and must be struck out
  • Striking out a verifying affidavit does not automatically defeat the petition; the court may exercise inherent power to allow a fresh verifying affidavit
  • Where no specific provision is made in the Companies (Winding Up) Rules, the Civil Procedure Rules and practice apply via rule 203

Court orders

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  1. 1.The verifying affidavit of Raha Mwambela Jilo is ordered struck out
  2. 2.The Petitioner is granted leave of 2 days to file and serve another affidavit verifying the petition
  3. 3.Costs of the Preliminary Objection shall abide the outcome of the petition

Authorities

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Legislation

  • Companies ActChapter 486
  • Companies (Winding Up) Rulesrule 24
  • Companies (Winding Up) Rulesrule 25
  • Companies (Winding Up) Rulesrule 203
  • Civil Procedure RulesOrder XVIII rules 3(1) and 4
  • Oaths and Statutory Declarations ActSection 11

Cases cited (1)

  • Premchand Raichand & Another Ltd =vs= Quarry Services & others
    [1969] E.A. P. 514

    Affidavits based on information must disclose the source of information; failure deprives the affidavit of evidential value

Jurisdiction invoked
Companies Act (Chapter 486) and the Companies (Winding Up) Rules; inherent power of the court

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kenya Ports Authority v Amarco (Kenya) Ltd", Case Analysis (2006). Bankruptcy and Winding Up Cause No. 5 of 2005. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2006/323/eng@2006-02-24

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.