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The High Court of Kenya ruled on a bankruptcy case involving Gedion Kalothi M'Mukuthura, who sought to stay a civil suit for damages related to a motor accident. The court found that the application for a stay was unnecessary as the outcome of the pending suit could not be predicted and dismissed the application without costs. The ruling emphasizes that courts do not act in vain and that the bankruptcy petition must be presented for a stay to be considered.

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Paul Mboya
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16 views4 pages

1

The High Court of Kenya ruled on a bankruptcy case involving Gedion Kalothi M'Mukuthura, who sought to stay a civil suit for damages related to a motor accident. The court found that the application for a stay was unnecessary as the outcome of the pending suit could not be predicted and dismissed the application without costs. The ruling emphasizes that courts do not act in vain and that the bankruptcy petition must be presented for a stay to be considered.

Uploaded by

Paul Mboya
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA


AT MERU
BANKRUPTCY CASE NO. 4 OF 2006

RE: GEDION KALOTHI M’MUKUTHURA

EX-PARTE: GEDION KALOTHI M’MUKUTHURA

RULING

A suit has been filed in the Chief Magistrate’s court at Meru, being Civil

Suit No. 725 of 2004 against the applicant for general and special

damages arising from a motor accident. The applicant has filed a defence

denying liability. He has, in the meantime brought the instant application

together with a petition seeking that the court issues a receiving order.

The application to which this ruling relates has been brought pursuant to

section 11(1) of the Bankruptcy Act. It seeks an order to stay Meru CMCC

No. 725 of 2004 on the grounds that in the said Meru CMCC No. 725 of

2004, the plaintiff is seeking over Kshs. 500,000/= yet the applicant is

unable to pay his debts. That his motor vehicle which was involved in the

accident in question was written off as a result thereof and that it was

covered by United Insurance Company, now under receivership.


2 BANKRUPTCY NO. 4 OF 2006

Section 11 of the Bankruptcy Act under which the application is brought

provides that:-

“11(1) The court may, at any time after the presentation of a

bankruptcy petition, stay any action, execution or other legal

process against the property or person of the debtor, and any

court in which proceedings are pending against a debtor may,

on proof that a bankruptcy petition has been presented by or

against the debtor, either stay the proceedings or allow them to

continue on such terms as it may think just.”

In terms of section 97 of the Bankruptcy Act jurisdiction in bankruptcy

matters, as a general rule is vested in the High Court. The High court,

therefore pursuant to the provisions of section 11(1) of the Act can stay

any action or execution or other legal process against the property or

person of the debtor so long as the petition for bankruptcy has been

presented.
3 BANKRUPTCY NO. 4 OF 2006

The court (either High Court or subordinate court) seized of the

proceedings against the debtor may also stay those proceedings on being

satisfied that the petition has been presented.

Section 11 of the Act envisages a situation where there is an imminent

threat either to the person of the debtor or his property. From the

annextures it is apparent that apart from the filing of the plaint and

defence no other steps have been taken. The suit is pending hearing yet

the applicant is able to predict the award of Kshs. 500,000/=.

Courts do not act in vain. A stay will serve no purpose as the outcome of

the suit cannot be predicted.

For these reasons, the application must fail and is dismissed. I make no

orders as to costs.

Dated and delivered at Meru this ……3rd ……. Day of ……june…… 2008.

W. OUKO
4 BANKRUPTCY NO. 4 OF 2006

JUDGE

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