- The decision in Kwale International Sugar Company Limited v Epco Builders Limited and Two Others [2025] KECA 227 (KLR) reinforces the principle that insolvency proceedings must be reserved for clear cases of inability to pay and cannot be used as leverage in unsettled construction disputes.
- It also clarifies the boundaries between private dispute resolution mechanisms and public insolvency processes.
- Where debts are genuinely disputed on substantial grounds, the appropriate forum remains the agreed dispute resolution mechanisms, not the insolvency court.
Background
In 2012, Kwale Sugar contracted Epco Builders (Epco) to construct a sugar factory under a KES 2.22 billion Engineering,…