The Nairobi Hospital got a reprieve after a commercial court lifted orders that prevented its board of management from borrowing for any capital expenditure.

Justice Peter Mulwa ruled that a number of the issues raised by Samuel Muchiri (plaintiff) were similar to matters pending before another related case.

Muchiri, in court documents, had challenged the conduct of the Annual General Meeting (AGM) held on December 4, last year, and its outcome which led to the election of a new board of directors.

“In my view, these are issues that will be best determined by the court in the initial case as the outcome and the report of the AGM is before that court,” the judge said.

The court added that the ‘concept of subjudice’ is that where an issue is pending in a court of law for adjudication between the same parties, any other court is barred from trying that issue so long as the first suit goes on.

“It will be untidy for the court to consider the outcome of the AGM both in this suit and the earlier suit as there is a great risk of coordinated courts granting conflicting orders,” he said.

Possible consolidation

 “It is for the above reasons that I reserve my comments on the merits of this case and find that the issues herein are similar. This matter shall be mentioned alongside the initial file for possible consolidation and expedited hearing. The interim orders in place are hereby discharged,” Justice Mulwa ruled.

Muchiri had also claimed that the hospital intended to borrow offshore, Sh4.2bn using assets of the hospital as collateral, which according to him demonstrated imprudence that would drive the hospital to insolvency.

The Judge at the time issued interim orders suspending the implementation of the resolution of the election of directors of the board of management as well as trustees of the hospital.

The court had also temporarily stopped the board of the Kenya Hospital Association from borrowing for any capital expenditure.

But these orders have since been discharged after the Board and KHA argued that a number of the issues raised by Muchiri were pending determination in other courts.

Medical equipment

The hospital in their defence told Justice Mulwa that Muchiri was not interested in the progression of the hospital as the Sh4.2bn will have more than half of it allocated to medical equipment replacing old outdated equipment that manufacturers have since ceased offering support and servicing of parts.

For instance, the hospital mentioned the linear accelerator which is used to provide cancer treatment services.

They told the court that it was acquired in 2012 and is no longer supported by the vendor as it has reached its mechanical ‘End-of-life’

The hospital urged the court to dismiss the application by Muchiri saying with the new equipment, there shall be a guaranteed return on investment.

Meanwhile, Nairobi Hospital has welcomed the Attorney General’s move to seek court orders for the Directorate of Criminal Investigations (DCI) to conduct a thorough review of its operations and governance structures. 

In a statement, the hospital administration reaffirmed its commitment to transparency and accountability, emphasizing that the investigation is in the institution’s best interest both operationally and in reputation. 

“Given the series of legal developments in recent years, we believe this step will help clarify any concerns regarding our governance. We remain fully committed to complying with the directive while ensuring uninterrupted care for our patients,” the statement read.