High Court strikes out KUSCCO liquidation petition, says co-operative societies governed by separate law

Jukwaa

📻 Breaking It Down

Justice Rhoda Rutto of the Milimani High Court held that the court lacked jurisdiction to entertain the insolvency petition filed by RUPSA Regulated NWDT Sacco Society Limited against KUSCCO.

The judge upheld a preliminary objection by KUSCCO and struck out the petition dated March 17, 2026, which sought to commence liquidation proceedings against the national umbrella body for savings and credit co-operative societies.

Justice Rutto ruled that the Co-operative Societies Act expressly excludes the application of the Insolvency Act to registered co-operative societies, except where specific provisions are applied through rules made under the Co-operative Societies Act.

📌 What You Need to Know

The court relied particularly on Section 95 of the Act, which provides that the Insolvency Act does not apply to a co-operative society except as expressly provided by rules made under Section 91.

The judge also cited Section 61(5), which states that no co-operative society may be dissolved or wound up except by an order of the Commissioner for Co-operative Development.

“The provision is not merely procedural. It is jurisdictional in character,” Justice Rutto ruled, adding that it identifies the statutory authority through which the dissolution and winding-up process of a co-operative society is initiated.

The court rejected RUPSA’s argument that KUSCCO’s status as a body corporate brought it within the definition of a company under the Insolvency Act.

Justice Rutto said although a registered co-operative society becomes a body corporate, this does not automatically make it a “company” for purposes of the Insolvency Act.

The judge noted that the Insolvency Act has its own definition of a company, covering entities registered under the Companies Act and specifically identified entities.

📰 Source: Capital FM Kenya

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