Mwalimu Kassim Mwalimu, Omar Mwinyihaji Gongo & Aziz Kambi (on their own behalf and on behalf of all members of Centi Kumi Residents Society) v Blue Shield Insurance Company Ltd (Under Statutory Management) & Lands Registrar Mombasa
The bottom line
#A Kenyan court struck out a land claim against a company in liquidation because the claimants never got the required court permission to continue their case.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether or not the 1st respondent has made out a case for striking out the applicants' suit on account of section 432(2) of the Insolvency Act
Key legal issues
#Whether leave under section 432(2) of the Insolvency Act was required to continue the suit after the liquidation order of 03.07.2024
Yes - upon the liquidation order the applicants were legally obligated to obtain leave to continue the suit, and none was obtained
Although the company was only under statutory management when the suit was filed in 2022, the liquidation order made on 03.07.2024 triggered section 432(2), which restricts both commencement and continuation of proceedings against a company in liquidation without court approval. The applicants' obligation to obtain leave arose during the pendency of the proceedings.
Whether the applicants obtained leave by their application dated 05.10.2023, allegedly allowed on 25.04.2024
No - only the order for joinder of the Managing Trustee of the Policy Holders Compensation Fund was granted; leave to continue the suit was not granted
A perusal of the record showed that although the applicants sought both leave to join the Managing Trustee of the Policy Holders Compensation Fund and leave to continue with the suit, the court on 25.04.2024 granted only the joinder order. The claimed leave to continue therefore did not exist.
Whether the Environment and Land Court had jurisdiction to grant leave under the Insolvency Act
No - under section 2 of the Insolvency Act, 'court' means the High Court or its insolvency division; the ELC cannot usurp the insolvency court's jurisdiction to grant such leave
Section 2 of the Insolvency Act defines 'court' as the High Court or, where an insolvency division exists, that division. Even if the applicants had obtained leave from the Environment and Land Court, it would not be regular. The ELC cannot take up or usurp the insolvency court's jurisdiction to grant leave under the Act.
Legal principles established
#- The statutory restriction in section 432(2) of the Insolvency Act applies to both new and existing proceedings once a liquidation order is made
- Only the High Court (or its insolvency division) may grant leave under the Insolvency Act; the Environment and Land Court cannot usurp that jurisdiction
Court orders
#- 1.The applicants' originating summons dated 12.10.22 is struck out
- 2.No order as to costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Section 432(2) of the Insolvency Act, 2015; Sections 1A, 1B and 3A of the Civil Procedure Act; Order 2 rule 15(1)(3) and Order 51 rule 1 of the Civil Procedure Rules
Relief refused
#Costs of the application sought by the 1st respondent
The court struck out the suit but made no order as to costs instead of awarding the 1st respondent costs
Costs
No order as to costs - the originating summons was struck out with no order as to costs.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
It is thus clear that the statutory restriction in Section 432(2) applies to both new and existing proceedings.
The Environment and Land Court cannot take up or usurp the jurisdiction of the insolvency court to grant such leave.
As a consequence, the applicants' originating summons dated 12.10.22 is hereby struck out with no order as to costs.
Issues in the judgment
#Prayer (c) cites the Insolvency Act as 'Cap 53' whereas the motion and ruling cite the Insolvency Act, 2015
Prayer (b) misattributes the originating summons to the 2nd respondent instead of the applicants
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mwalimu Kassim Mwalimu, Omar Mwinyihaji Gongo & Aziz Kambi (on their own behalf and on behalf of all members of Centi Kumi Residents Society) v Blue Shield Insurance Company Ltd (Under Statutory Management) & Lands Registrar Mombasa", Case Analysis (2026). ELC Case No. E136 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/6324/eng@2026-10-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.