In Re: Arvind Engineering Limited ML HC IP No. 03 of 2019 [2019] eKLR the High Court held that the holder of a debenture whose instruments empowered them to appoint a Receiver-manager under the Repealed Act is deemed to have powers to appoint an administrator under the Insolvency Act 2015, section 534 as the powers and functions of a Receiver-Manager are akin to that of an administrator then the Bank.
The Court asserted that there lies some commonality between the past concept of Receiver-manager and the contemporary concept of Administration and since the Debenture empowers the bank to appoint a Receiver under the provisions of the repealed Companies Act, then that power can be deemed to include power to appoint an Administrator. This was so as not to disadvantage debenture holders who held debentures that predated the Act, and hence the need to give a purposive interpretation to the provisions of section 534(2)(b).
- A Debenture Holder of a Qualifying Floating Charge cannot appoint an Administrator where there are pending insolvency proceedings.
In Re: Arvind Engineering Limited ML HC IP No. 03 of 2019 [2019] eKLR the High Court also held that where there’s any pending insolvency proceedings, the Debenture Holder once made aware of such proceedings ought to remain in those proceedings and make arguments for or against the grant of the order.
Scuttling the pending proceedings by making a quick appointment under section 534 of the Act is done in bad faith and such appointment is stayed pending the determination of the insolvency proceedings.
The Environment & Land Court and Employment & Labour Relations Court cannot transfer suits to the High Court and vice-versa when they find that they have no jurisdiction to hear and determine the dispute.
The Supreme Court in Albert Chaurembo Mumba & 7 others (sued on their own behalf and on behalf of predecessors and or successors in title in their capacities as the Registered Trustees of Kenya Ports Authority Pensions Scheme) v Maurice Munyao & 148 others (suing on their own behalf and on behalf of the Plaintiffs and other Members/Beneficiaries of the Kenya Ports Authority Pensions Scheme) [2019] eKLR while addressing the question of whether the ELRC and ELC can transfer cases to the High Court and vice-versa stated that where a suit filed before a court is without jurisdiction, it could not be transferred to another court.
Although it had been the practice of the ELRC, ELC and the High Court, to transfer suits to the High Court and vice versa; in instances where the court finds that it has no jurisdiction, the said practice has since been held to be illegal. The Supreme Court succinctly held that an order for transfer of a suit from one court to another cannot be made unless the suit has been brought, in the first instance, to a court which has jurisdiction to try it.
In determining this it looked at the Jurisdictional limits of the superior courts in the resolution of disputes between pensioners or members, beneficiaries of a pension scheme, the Registered Trustees of the pension schemes, and the Sponsors of the schemes or employers in regard to the management of the pension schemes. Ordinarily, with the existence of sections 46 (1) and 48(1) of the RBA Act, the High Court, the Employment and Labour Relations Court, the Retirement Benefits Appeals Tribunal and the CEO heard and determined pension disputes involving retired employees.
The blowback to this was that there was uncertainty created in law by the discordant and inharmonious way similar disputes related to pensioners and Trustees of pension schemes was to be adjudicated before our courts, tribunals, and statutory bodies with quasi-judicial authority.
In finding that the proper forum for the respondents in the case to launch their dispute was to first write to the CEO then if dissatisfied with the decision of the CEO appeal to the Retirement Benefits Appeals Tribunal and ultimately to the ELRC; The Court found that despite the parties consenting to the transfer the suit from the High Court to the Employment and Labour Relations Court the suit was a nullity ab initio as jurisdiction could not be conferred by consent, as it is not provided for by the law and ultimately, all orders emanating from that suit were termed null and void.