1.This ruling determines the application dated 23/1/2023. The same was brought under sections 1A, 1B & 3A of the Civil Procedure Act and Order 51 of the Civil Procedure Rules. The application seeks the setting aside or variation of the orders that stayed the proceedings in HCC MISC E1292 OF 2022. The interested party also seeks to be enjoined in these proceedings.
2.The application was premised on the grounds set out on the face of it and on the supporting affidavit of Tony Njenga sworn on 23/1/2023.
3.The applicant contended that on 14/9/2020 an arbitral award was made in its favour and subsequently, it applied in HCCCMISC NUMBER E1292 for the adoption of the award as a decree of the court. That subsequently, on 8/11/2022, this Court made an order staying those proceedings. That the same was prejudicial to the applicant and the applicant was suffering loses as the debtor had not settled the arbitral award. Further it was averred that no prejudice would be occasioned by the respondent if the orders sought were granted.
4.The application was opposed by the respondent vide grounds of opposition dated 10/4/2023. The respondent termed the application as an abuse of the court process as the orders sought offend the provisions of the Insolvency Act. That under sections 428 to 430, once a winding up petition has been presented, there is need to protect the assets of the debtor. That the applicant had not given reasons as to why the order of stay should be set aside or varied.
5.The application was canvassed by way of written submissions which I have considered. The respondent observed that it was not opposed to the interested party being enjoined in these proceedings. That the existence of insolvency proceedings did not operate as an automatic stay and therefore, the Court had to be moved. That the debtor moved the court for stay orders and the same were granted on 10/11/2022. That section 428 of the Insolvency Act was meant to ensure that there was equality of creditors pending hearing and determination of the liquidation proceedings.
6.Having considered the parties averments, the only issue for determination is whether a case has been made for vacating or varying the stay orders made herein on 8/11/2022.
7.It is not in dispute that on 14/9/2020, an award was delivered in favour of the applicant for Kshs 4,760,091.45. The applicant applied for its adoption in HCC MISC E1292 of 2022. Then an Insolvency Petition was filed in this court by a creditor of the debtor for a debt of Kshs.119,864/-. The debtor company then applied for HCCCMISC 1292 OF 2020, HCCCMISC E558 OF 2020 and CMCC 5200 OF 2019. The Court acceded and gave those orders staying all legal proceedings against the debtor company pending the hearing and determination of the Insolvency petition.
8.Section 428 of the Insolvency Act gives the Court the power to stay legal proceedings against the debtor company. It provides that: -
9.In Ndane Construction Company Limited v Spencon Kenya Limited  eKLR, the court observed that: -
10.In the present case, the order of stay was made to ensure that the assets of the company are protected and to give room for the petition to be heard. The reason advanced by the applicant in this matter is that it would be prejudiced if the orders for stay are not varied. The Court notes that allowing the application would amount to giving the applicant an advantage over the assets of the debtor company at the expense of the other creditors.
11.If the company is finally liquidated, all the creditors, the applicant included, will be entitled to appear before the Liquidator and prove their debts in the normal manner.
12.Accordingly, I find no reason to interfere with the stay orders made on 10/11/2022 and dismiss the application with costs.
It is so ordered.