In re Kabuya (Insolvency Cause E017 of 2025) [2026] KEHC 7127 (KLR) (Commercial and Tax) (16 April 2026) (Judgment) Neutral citation: [2026] KEHC 7127 (KLR) REPUBLIC OF KENYA IN THE HIGH COURT AT NAIROBI (MILIMANI COMMERCIAL COURTS) COMMERCIAL AND TAX INSOLVENCY CAUSE E017 OF 2025 F GIKONYO, J APRIL 16, 2026 IN THE MATTER OF JOSEPH KABUYA JUDGMENT 1. The petitioner, Joseph Kabuya, filed the Debtor’s Petition dated 20.12.2024, seeking that a bankruptcy order be made in respect of his estate and that he may be adjudged bankrupt. 2. The petitioner also filed the notice of motion dated 24.4.2025, seeking leave to publish the Bankruptcy Petition in a newspaper with nationwide circulation. He also seeks an order to stay the execution and/ or any proceedings relating to the execution of all decrees issued against the petitioner pending the hearing and determination of the petition. 3. Through the ruling of 3.7.2025, the court declined to hear the application based on non-compliance with section 32 of the Insolvency Act. 4. The debtor has filed the statement of financial position for the year ended 31.12.2024. 5. The court directed the petitioner to file a statement of the debtor’s financial position in accordance with section 32 of the Insolvency Act and provide details on his personal liability within 14 days. 6. Section 32 of the Insolvency Act provides that: “ 32. When debtor may make application for bankruptcy order (1) A debtor may make an application to the Court for an order adjudging the debtor bankrupt only on the grounds that the debtor is unable to pay the debtor's debts. (2) The Court may decline to deal with such an application if it is not accompanied by a statement of the debtor's financial position containing— https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7127/eng@2026-04-16 1
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(a) (3) The Court may reject a statement of the debtor's financial position if of the opinion that it is incorrect or incomplete. (4) A debtor who makes an application under this section shall publish a notice of the application in— (5) 7. such particulars of the debtor's creditors and of the debtor's debts and other liabilities and assets as may be prescribed by the insolvency regulations; and (b) such other information as may be so prescribed. (a) a newspaper circulating within the region in which the debtor ordinarily resides; and (b) in such other publications (if any) as may prescribed by the insolvency regulations for purposes of this section. The Court may decline to hear the application if subsection (4) has not been complied with to its satisfaction.” There are three critical issues to be considered at this juncture: 1. Is the statement complete, accurate and candid? 2. Does it disclose all assets, liabilities and creditors? 3. Does it clearly distinguish between personal and company debts? 8. I have studied the statement. The first page reads that it is the report of the proprietor, the petitioner herein. 9. At page 1, the results show a comprehensive income of Kshs. (477,526) and Kshs. (667,619) for the years 2024 and 2023 respectively. 10. Page 3 of the statement indicates that it is the annual report and financial statements for the year ended 31.12.2024. 11. The results show that the net profit (loss) for the year transferred to statement of changes in eq was Kshs. (1,500,941) and Kshs. (895,736) for 2024 and 2023 respectively. 12. The ruling of 3.7.2025 required the debtor to file a statement that was in accordance with section 32 of the Insolvency Act. 13. He was also required to provide the details on his personal liability in each case, detailed below: 1. CMCC/E019/2023 (kiambu) Job Wanjohi Mugo V Tradeline Auto Ltd And Joseph Kabuya Thinwa 2. MC.CC/7182/2015 Charles Gatoru Kamiti Wangui V Esjoe Marketing Holdings Limited & Joseph Kabuya THINWA judgment was entered for the plaintiff inter alia for the sum of Kshs. 1,248,000/= with interests at court rates from the date of filing the suit on 17th January 2025. 3. In SCCOMM/E6369 OF 2023 (Milimani Commercial) Catherine Njeri Kinyanjui V Tradeline Auto World Limited, the claimant has moved the court to lift the veil of incorporation to realize against the Applicant, the decretal sum of Kenya Shillings Nine https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7127/eng@2026-04-16 2
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Hundred and Thirty-Eight Thousand One Hundred and Ninety-Six (Kshs. 938,196/-) and commit the petitioner to civil jail. 4. SCCOMM/E1225/2023 Elys Kanana V Tradeline Auto World Litimed, the plaintiff has obtained a decree for the sum of Kenya Shillings One Hundred and Forty-Seven Thousand, Four Hundred and Nine plus cost of Kenya Shillings Forty-Seven Thousand, Seven Hundred against the petitioner. 5. SCCOMM/E914/2023 (Milimani Commercial) Andrew Wambari Thumbi V Joseph Kabuya Thinwa, the claimant moved the court for warrants of arrest against the petitioner. 14. From a study of the statement, the debtor has not complied with section 32. 15. The statement does not contain the particulars of the debtor's creditors and of the debtor's debts and other liabilities and assets. 16. The statement does not distinguish between the debtor’s personal debts and the company’s debts. 17. In the circumstances, the court is constrained to strike out the petition dated 20.12.2024 and the application dated 24.4.2025. No orders as to costs as there was no response. DATED, SIGNED AND DELIVERED AT NAIROBI THROUGH MICROSOFT TEAMS ONLINE APPLICATION THIS 16TH DAY OF APRIL, 2026 ------------F. GIKONYO M JUDGE In the presence of: Lwanga for Petitioner CA – Ivan/Aggrey https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7127/eng@2026-04-16 3
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