- High Court strikes out petition seeking to liquidate KUSCCO
- Court rules cooperative societies fall under a separate legal framework
- Commissioner appoints a liquidator to oversee KUSCCO’s affairs
The High Court has struck out an insolvency petition seeking to liquidate the Kenya Union of Savings and Credit Cooperatives Limited (KUSCCO).
Nairobi’s Milimani High Court ruled that the Insolvency Act does not provide the legal basis for winding up a cooperative society.
Lady Justice Rhoda Rutto upheld a preliminary objection by KUSCCO and found that the petition filed by Rupsa Regulated NWDT Sacco Society Limited was improperly brought under the Insolvency Act.
In her ruling delivered on September 28, 2026, Justice Rutto said KUSCCO, as a society registered under the Cooperative Societies Act, is governed by the specialised legal framework under that law.
The court rejected arguments that KUSCCO’s status as a body corporate or the word “Limited” in its name made it a company under the Insolvency Act. The judge noted that KUSCCO was registered under the Cooperative Societies Act and not the Companies Act.
Justice Rutto further relied on Section 95 of the Cooperative Societies Act, which generally excludes the application of the Insolvency Act to cooperative societies unless specific provisions are adopted through regulations.
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She also cited Section 61(5), which provides that a cooperative society cannot be dissolved or wound up except through an order of the Commissioner for Cooperative Development.
The court said even if the allegations demonstrated insolvency, they could not give the High Court jurisdiction to commence liquidation under Part VII of the Insolvency Act. The petition was therefore struck out.
“The Preliminary Objection dated 28th March 2026 is accordingly upheld. The Petition dated 17th March 2026 is hereby struck out for want of jurisdiction,” Justice Rutto ruled.
The court directed that each party bears its own costs.
The ruling was delivered on September 28, 2026, at the Milimani High Court Commercial and Tax Division.
The Commissioner for Cooperative Development had appointed Waithaka Ngaruiya of Waithaka and Associates as KUSCCO’s liquidator for a period not exceeding one year.
In a Gazette notice dated September 23, 2026, Commissioner David Obonyo replaced three State Department for Cooperatives officials who had previously been appointed to oversee the liquidation.
Ngaruiya has been authorised to take custody of KUSCCO’s property, books and documents necessary to complete the liquidation process.
By our reporter
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