NAIROBI, Kenya, July 14 – The Court of Appeal (CoA) has allowed an appeal by Kevian Kenya Limited against Hipora Business East Africa Limited, ruling that a genuine dispute exists over a debt of Sh2.8 million that cannot be resolved through insolvency proceedings.
The three-judge bench comprising Justices Jamila Mohammed, F. Ochieng, and A.O. Muchelule set aside a 2018 High Court decision that had declined to strike out a liquidation petition filed by Hipora, which had accused Kevian of failing to settle unpaid invoices under a series of Service Level Agreements.
The appellate court found that the debt was “substantially disputed” and that the High Court erred by dismissing Kevian’s evidence, especially a further affidavit filed in January 2018 that raised issues of overcharging and overpayment.
“The insolvency court is not the appropriate forum to adjudicate genuinely disputed debts, particularly where factual controversies exist and the matter requires a reconciliation of accounts,” the judges ruled.
Kevian had claimed it overpaid Hipora by Sh279,092.65 and that the respondent had billed them per personnel contrary to fixed rates stipulated in the contracts.
The company argued that its request for reconciliation sent in late 2016 and early 2017 was ignored.
Hipora maintained the demand letters were valid and accused Kevian of raising a last-minute dispute to frustrate lawful proceedings.
They argued that the original affidavit never mentioned a contested debt.
But the court held that the omission of the further affidavit by the High Court was a “material misdirection,” concluding.
“The appellant raised sufficient grounds to demonstrate that the debt was genuinely disputed, requiring a fuller hearing to establish the exact sum owed, if any.”
The parties were directed to resolve the matter through a civil suit.
