BLOW TO AMACO AS COURT DECLINES TO STOP INSOLVENCY PROCEEDINGS.

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African Merchant Insurance company

BY SAM ALFAN.

African Merchant Insurance Company (AMACO) has suffered a major blow in attempt to stop insolvency proceedings brought against the company various courts including Embu, Kiambu and Ngong.

High Court Commercial Court Judge Dorah Chepkwony dismissed the company’s application saying it was incompetent since it was filed by a lawyer who was not properly on record.

“The application dated 23rd of June 2022, is incompetent for having been filed by an advocate not properly on record for the applicant. Consequently, the application is struck out,” ruled Judge Chepkwony.

The judge said that she was persuaded to agree that if newly appointed advocates are allowed to assume legal presentation of parties without notifying the court, lawyers and other parties involved in the suits would create total confusion and chaos in conduct of court proceedings.

“It would also be unclear as to whom the proper advocate for service of pleadings on behalf of such party would be and, in my view, that was not the intent of the law,” said the judge.

Justice Chepkwony had in May ordered the underwriter to deposit Sh1 million in court as a condition to avoid being liquidated. The initial order was given by Justice Margaret Muigai in September 2021.

In the latest case, the underwriter moved to court seeking to suspend insolvency proceedings before various courts.

The cases in courts have been filed by various persons including Elizabeth Karithi, Anisia Muthoni Njeru, Faith Mwendia, Silas Kinoti, Abel Mwani and John Mwangi who want the company declared insolvent over the failure to pay them for over two years after obtaining decrees.

According to underwriter, the petitioners cannot seek liquidation and yet pursue other avenues to recover the alleged debt.

The claimants, however, objected the case arguing that it was filed by a stranger.

On the issue on whether the African Merchant Insurance company is on the liquidation or not, lawyer Morris Mugendi told the court that unless the court makes such liquidation order vide section 431(2) of the insolvency Act, then liquidation proceedings may not have commenced.

The lawyer told the court that the case was filed to frustrate his clients and scuttle process of getting their compensation.

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