Dickson Jomo Kebatta v Deposit Insurance Coorporation in Liquidation of Middle Africa Finance Ltd [2017] KEELC 1894 (KLR)
The bottom line
#Kenya's Environment and Land Court struck out a borrower's suit because he never got court permission to sue a company in liquidation, and he owed the loan anyway.
What this practically means
#Executive summary
#Key legal issues
#Whether the Plaintiff established a basis for an interlocutory injunction over the charged suit property
The injunction was refused because the correspondence showed the Plaintiff knew of and authorised the charge and admitted being in loan arrears
The court reviewed annexures MLN 9, letters of 21st April 1987 and 11th May 1987 signed by the Plaintiff forwarding signed charge documents, and a 2014 letter admitting arrears. It found the Plaintiff's claim that he was unaware of the charge less than candid. Citing Kenya Breweries Ltd v Washington O. Okeyo, the court held a defaulting contracting party cannot obtain an injunction to avoid his just obligations.
Whether the suit offended Section 56(2) of the Kenya Deposit Insurance Act for want of leave
The suit was improperly instituted because it was commenced without leave of the Court against the Liquidator of a company in liquidation
It was not disputed that the Defendant is the Liquidator of Middle Africa Finance Company Ltd and that the suit was commenced without leave. Relying on Ruth Wanjiku Kagiri, Joseph Kaara Mwethaga, Kirtesh Premchand Shah and Bisai v Kenya Commercial Bank, the court held that proceedings against a company in liquidation require the prior sanction of the Court; the lack of leave rendered the proceedings improperly instituted.
Legal principles established
#- No injunction or other civil proceeding may be commenced or continued against an institution in liquidation, or in respect of its assets, without the sanction of the Court under Section 56(2) of the Kenya Deposit Insurance Act
- A suit filed against a company in liquidation without leave of the Court is incurably defective and incompetent, and an application for injunction in such a suit must fail
Court orders
#- 1.The suit herein is struck out
- 2.Costs to the Defendant
- Jurisdiction invoked
- Environment and Land Court jurisdiction over the suit property; application under ordinary civil procedure for interlocutory injunction
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Dickson Jomo Kebatta v Deposit Insurance Coorporation in Liquidation of Middle Africa Finance Ltd [2017] KEELC 1894 (KLR)", Case Analysis (2017). Notice of Motion dated 20th December 2016 (Malindi ELC). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/1894/eng@2017-09-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.