The High Court in Nairobi has dismissed a petition filed by Rupsa Regulated NWDT Sacco Society Limited to liquidate KUSCCO, a co-operative society registered under the Co-operative Societies Act. The court ruled that the Insolvency Act, under which the petition was filed, does not provide a legal basis for winding up a co-operative society. Lady Justice Rhoda Rutto, sitting at the Milimani High Court, upheld a preliminary objection by KUSCCO, finding that the petition was improperly brought.
The court's decision, delivered on September 28, 2026, brings to an end the petition filed on March 17, 2026. Justice Rutto considered whether KUSCCO's preliminary objection met the legal threshold established in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd. The court rejected Rupsa's argument that determining the objection would require a detailed examination of KUSCCO's financial position, corporate structure, and subsidiaries.
The judge found that KUSCCO's status as a co-operative society was undisputed and that the central question was one of statutory interpretation. The court held that KUSCCO, being a co-operative society registered under the Co-operative Societies Act, is governed by a specialised statutory framework established under that law, rather than the general corporate insolvency regime.
The court rejected the argument that KUSCCO's status as a body corporate automatically brought it within the definition of a company under the Insolvency Act. Justice Rutto noted that the Co-operative Societies Act gives registered co-operative societies corporate personality, but held that corporate personality does not necessarily make an entity a "company" for purposes of every statute.
A central issue in the case was Section 95 of the Co-operative Societies Act, which provides that, except where expressly provided through rules made under Section 91, the Companies Act, Insolvency Act, and Registration of Business Names Act do not apply to a co-operative society. Justice Rutto found the provision to be clear and unambiguous, and held that the relevant provisions of the Insolvency Act would have to be incorporated through rules made under the statutory framework.
The court ultimately found that it lacked jurisdiction to entertain the petition as presented. Justice Rutto upheld KUSCCO's preliminary objection dated March 28, 2026, and struck out the insolvency petition filed by Rupsa. The ruling clarified that the High Court is not excluded entirely from matters concerning the liquidation of co-operative societies, but rather has powers within the liquidation framework established by the Co-operative Societies Act.
Key points
- The High Court in Nairobi has struck out an insolvency petition seeking the liquidation of KUSCCO, ruling that the Insolvency Act does not apply to co-operative societies.
- The court's decision was based on the finding that KUSCCO, as a co-operative society registered under the Co-operative Societies Act, is governed by a specialised statutory framework.
- The ruling clarified that the High Court has powers within the liquidation framework established by the Co-operative Societies Act, but not an independent power to commence liquidation proceedings under the Insolvency Act.
