Meds Pharmaceuticals Limited v Harleys Limited [2025] KEHC 2975 (KLR)

Meds Pharmaceuticals Limited v Harleys Limited (Insolvency Petition E047 of 2024) [2025] KEHC 2975 (KLR) (Commercial and Tax) (17 March 2025) (Ruling)

Neutral citation: [2025] KEHC 2975 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts)

Commercial and Tax

Insolvency Petition E047 of 2024

A Mabeya, J

March 17, 2025

IN THE MATTER OF MEDS PHARMACEUTICALS LIMITED

AND

IN THE MATTER OF THE INSOLVENCY ACT NO. 18 OF 2015

AND

IN THE MATTER OF THE COMPANIES ACT, CAP 486 (NOW REPEALED)

Between

Meds Pharmaceuticals Limited

Applicant

and

Harleys Limited

Respondent

Ruling

1. By a Motion on Notice dated 14th October, 2024, the applicant applied that the respondent be directed to do reconciliation of accounts demonstrating the corresponding individual invoices showing how the debt arose. That consequently, the Court do set aside the liquidation proceedings. The Motion was brought, inter alia, under Regulation 77b of the Insolvency (Amendment) Regulations, 2018.

2. The applicant also sought that the liquidation proceeding be set aside. On 26th November, 2024 the Court granted prayer Nos. 1 and 2 of the Motion and directed that the petitioner do respond to the Motion within 14 days. The submissions were to be filed within 30 days thereafter. The Court also directed Mr. Bosilas, Advocate for the applicant to serve the said directions upon the petitioner within 7 days.

3. Despite having directed that the directions be served within 7 days as aforesaid, there is no evidence on record to show that the same were served. As a result, the orders made on 26th November, 2024 directing the petitioner to supply the applicant the reconciliation accounts and statements juxtaposed with invoices was not complied with by the petitioner. As a result, thereof, the petitioner only lodged its replying affidavit without complying with the Courts directions aforesaid.

4. Since the directions were not complied with, this Court should only proceed to terminate the liquidation proceedings. However, that would be highly prejudicial to the petitioner. It was not served with the directions of this Court for 26th November, 2024 as already stated. Had it been served, it would have complied therewith without jeopardising its case. Let the petitioner comply with those directions by supplying the reconciliation accounts within 30 days of this ruling in default, the liquidation proceeding shall stand terminated.

5. The Court makes these orders because there are serious allegations that the debt is seriously disputed on bona fide grounds. That the documents relied on to commence the liquidation proceedings were unauthenticated and therefore unreliable. The Court will not peremptorily terminate the proceedings without having a look at the accounts and the documents alleged. It will give the petitioner the opportunity to comply with prayers Nos. 1 and 2 of the Motion before the Court can deal with the prayer for the termination of the proceedings.

6. Accordingly, let the Petitioner comply with prayer Nos. 1 and 2 of the Motion as granted on 26th November, 2024 within 30 days in default prayer No. 3 shall stand allowed.It is so ordered.

DATED, SIGNED AND DELIVERED VIRTUALLY VIA MICROSOFT TEAMS AT KISUMU THIS 17TH DAY OF MARCH, 2025. A. MABEYA, FCI ArbJUDGE