Insolvency 2025

KENYA Law and Practice Contributed by: Noella Lubano, Paul Kamara, Kateline Mang’ich and Anne Cheloti, Oraro & Company Advocates

6.4 Recognition and Enforceability Kenyan courts recognise foreign judgments and rul - ings made against a debtor upon an application by a foreign representative who is authorised in a foreign proceeding to administer the reorganisation or liquida - tion of the debtor’s assets or financial affairs, or to act as a representative in the foreign proceeding (Clauses 13 and 17 (1), Fifth Schedule of the IA). The application for recognition shall be accompanied by: • a certified copy of the decision commencing the foreign proceeding and appointing the foreign representative; • a certificate from the foreign court affirming the existence of the foreign proceeding and the appointment of the foreign representative; or • in the absence of evidence of the decision and the certificate from the foreign court, any other evi - dence of the existence of the foreign proceeding and of the appointment of the foreign representa - tive that is acceptable to the court (Clause 17 (2), Fifth Schedule of the IA). Kenyan courts may reject an application for recogni - tion if it is not accompanied by the required docu - ments (see Clause 17 (3), Fifth Schedule of the IA and Re Cooperative Muratori & Cementisti – CMC DI Ravenna [2019] KEHC 1610 (KLR)). 6.5 Co-Ordination in Cross-Border Cases One of the primary objectives of Kenya’s insolvency framework is to promote co-operation between courts and other competent authorities with foreign states (Clauses 2 (a) and 27 (1), Fifth Schedule of the IA). The IA defines “co-operation” as the “appointment of a person or body to act at the direction of the court, communication of information by any means consid - ered appropriate by the court, co-ordination of the administration and supervision of the debtor’s assets and financial affairs, approval or implementation by courts of agreements concerning the co-ordination of proceedings, and co-ordination of concurrent pro - ceedings regarding the same debtor”.

Stay or Deferral of Enforcement There is an automatic stay during liquidation, restrain - ing any further court proceedings or enforcement, to protect the company’s assets. However, the rights of a secured creditor to enforce its security are not sub - ject to liquidation proceedings and can be exercised with court approval (see Sections 560 and 560A of the IA). The court may lift the moratorium if it is estab - lished that a secured creditor is not protected from the diminution in value of the encumbered asset (Section 560A). Permissibility of Non-Debtor Releases See 4.2 Statutory Restructuring, Rehabilitation and Reorganisation Procedure . 6. Cross-Border Issues in Insolvency 6.1 Sources of International Insolvency Law Kenya recognises foreign insolvency proceedings pursuant to the provisions of Section 720 of the IA, which recognises the United Nations Commission on International Trade Law’s Model Law on Cross–Bor - der Insolvency (the UNCITRAL Model Law) as having the force of law in Kenya in the corresponding form set out in the Fifth Schedule of the IA (see Clause 1, Fifth Schedule of the IA and Re Cooperative Muratori & Cementisti – CMC DI Ravenna [2019] KEHC 1610 (KLR)). 6.2 Jurisdiction Under Clause 18 (3) of the Fifth Schedule of the IA, the debtor’s centre of main interest is presumed to be their registered office in the instance of a corporate body or their usual residence in the case of a natural person, unless otherwise proven. 6.3 Applicable Law Kenya follows the universalist approach, which pro - vides for a stay of all insolvency proceedings in Kenya, to allow the foreign representative to collect and real - ise the assets of the insolvent company. Laws of the company’s centre of main interest are used, but these laws may be rejected if they are contrary to public policy in Kenya.

291 CHAMBERS.COM