The High Court has rejected a request from Nairobi Hospital to lift orders suspending the implementation of resolutions from December’s election of a new board of directors. Justice Peter Mulwa declined the hospital’s request to lift the orders, instead extending them until 13th March, when he is expected to deliver his ruling on the matter.
On 13th February 2025, the judge had issued orders preventing the board of the Kenya Hospital Association (KHA) from borrowing funds for any capital expenditure, pending the hearing and determination of a case filed by Dr Samuel Mithamo Muchiri.
Dr Muchiri, a medical doctor and member of the Kenya Hospital Association (the organisation that owns Nairobi Hospital), has filed a lawsuit against KHA’s board of management and its trustees, with the association itself entered as an interested party.
Muchiri is challenging the outcome of the 4th December election, which saw the appointment of the new board of directors, alleging misconduct during the election process. He claims that the defendants failed to file an updated index of members with the Registrar of Companies and have engaged in serious acts of malpractice, breaching their duty to act in the best interests of the institution.
In his ex parte orders, Justice Mulwa also barred the board from using the association’s assets as collateral for any loans. Additionally, the orders halted the board from purchasing hospital equipment, furniture, or fittings; upgrading or maintaining physical assets such as properties, buildings, or technology; settling pending bills; or spending on any newly procured projects or investments.
Further orders were issued prohibiting the board from liquidating, encashing, or using in any manner the funds held by the association in fixed deposits, Treasury Bonds, Infrastructure Bonds, and the Provident Fund.
During the hearing of the interlocutory applications on Friday, KHA’s lawyer Stanley Kinyanjui urged the court to lift the orders, arguing that the hospital’s operations were at risk of being crippled. Kinyanjui claimed the lawsuit was filed in bad faith, full of unsubstantiated claims that did not meet the necessary threshold for the granting of such orders.
“I have reviewed their bundle of documents, and I found that it does not meet the basic elements of evidential value,” Kinyanjui stated as he urged the court to lift the orders. Lawyer Ibrahim Ogejo, representing the trustees, added that the petitioner should have followed the association’s constitution if he intended to remove a director.
“They know how to remove a director, but they don’t want to go down that route. Their only claim is that the hospital has become a crime scene, with theatres now operating like butcher shops for patients,” Ogejo argued.
He further claimed that the orders preventing the board from borrowing funds for capital investments would hinder the hospital’s ability to fulfil contractual obligations. “The orders sought will severely cripple the hospital in matters of life and death,” Ogejo said.
Former Law Society of Kenya President Nelson Havi, representing Dr Muchiri, argued that the orders should be extended as the board had committed unnecessary expenses, and the over KSh 1.2 billion in the hospital’s fixed deposits and negotiable instruments were at risk of being misappropriated.
Havi claimed that the board had borrowed over KSh 4 billion for capital projects and that the hospital had been running at a loss, having lost KSh 1.5 billion in 2023. He further alleged that more than KSh 350 million was spent on legal fees alone in 2023, an amount he deemed excessive.
“These were not legitimate earnings. Even Safaricom and the Kenya Revenue Authority do not pay such amounts,” Havi said.
He also contended that the 4th December election was conducted with an outdated register, turning the entire process into a farce. “Today, the directors and trustees allegedly elected that day have resigned,” Havi noted.
He urged the court to extend the orders to preserve the current situation at the hospital.
Ogejo dismissed Havi’s claims as sensational, accusing him of attempting to misdirect the court.
“At one point, he claimed the lawyers were paid KSh 500 million, then reduced it to KSh 351 million, and now he is talking about KSh 150 million. The rules of evidence show these submissions are made in bad faith,” Ogejo said.
Both parties agreed that it would be unsafe for the court to grant an injunction until all issues had been thoroughly examined.
