Court extends orders suspending Nairobi Hospital board election outcome

Justice Peter Mulwa in court/HANDOUT

The Nairobi Hospital on Friday suffered a blow after the High Court declined its request to lift orders suspending the implementation of the resolutions of last December’s election of a new board of directors.

Justice Peter Mulwa had on February 13, 2025, also issued orders stopping the board of the Kenya Hospital Association from borrowing for any capital expenditure pending hearing and determination of a case filed by Samuel Mithamo Muchiri.

Samuel Muchiri is a medical doctor and a member of the Kenya Hospital Association, the organisation that owns the Nairobi Hospital.

He has sued KHA’s board of management and its trustees, with the association entered in the suit as an interested party.

Muchiri has challenged the outcome of the December 4 election of a new board of directors, faulting its conduct.

He alleges that the defendants failed to file an updated index of members with the Registrar of Companies. It is also his claim that the defendants have engaged in serious acts of malfeasance, breaching their duty to act in the best interests of the institution. 

In his exparte orders, Justice Mulwa also stopped the board from using assets of the association as collateral for any loans.

The orders also stopped the board from buying hospital equipment, furniture and fittings, upgrade and maintenance of physical assets such as property, plants, buildings, technology or equipment; settling pending bills, spending on any new procured projects or investments.

Further orders were issued restraining the board from liquidating, encashing or using in any manner funds belong to and held by the association in fixed deposits, Treasury Bonds, Infrastructure Bonds and Provident Fund.

During the hearing of the interlocutory applications on Friday, the board of the Kenya Hospital Association, through lawyer Stanley Kinyanjui urged the court to lift the orders saying the operations of the hospital were at risk of being crippled.

Kinyanjui said the suit was filed in bad faith and was full of unsubstantiated claims that do not meet the threshold for granting of the orders sought.

“I have gone through their bundle of documents, and the finding is that it doesn’t meet the basic elements of evidential value,” Kinyanjui said as he urged the court to lift the orders.

Lawyer Ibrahim Ogejo for the trustees of the association said the petitioner ought to have followed the association’s constitution if he wanted a director removed.

“They know how they can remove a director, but they don’t want to go that route. Their only claim is that the hospital has become a crime scene with theatres now operating as butchers for patients,” Ogejo submitted.

He said orders restraining the board from borrowing for capital investments will stop the hospital from honouring contractual obligations.

“The orders sought will cripple the hospital in a very serious matter of life and death,” he said.

Former Law Society of Kenya president Nelson Havi, who is representing Muchiri, told the court that the orders ought to be extended because the board had entered into unnecessary expenses and that the over Sh1.2 billion that the hospital has in fixed deposits and negotiable instruments were at risk of being misappropriated.

Havi said the board had borrowed over Sh4 billion for capital projects and that the hospital was running in losses having lost Sh1.5 billion in 2023.

He claimed more than Sh350 million was paid for legal fees alone in 2023, an amount he said was so high.

“Those were not honest earnings. Even Safaricom and Kenya Revenue Authority do not pay that amount,” Havi submitted.

He said the December 4 election was conducted with an adulterated register, with the whole process turning out to be a sham.

“Today, the directors and board of trustee members allegedly elected on that day have resigned,” Havi said.

He urged the court to extend the orders, saying there was need preserve what is prevailing at the hospital.

Ogejo described Havi’s submissions as sensational, saying they were meant to misdirect the court.

“At one point, he claimed the lawyers were paid Sh500 million, then scaled it down to Sh351 million, and now he’s talking of Sh150 million. The rules of evidence are that these submissions are in bad faith,” he said.

The lawyers said it was unsafe for the court to grant an injunction until the parties have thrashed out all the issues.

The board argues that Muchiri had not shown any prima facie case to warrant the issuance of the orders sought.

Justice Mulwa, after listening to the parties set March 13 for a ruling. The court will also rule on whether Muchiri can continue with the derivative suit. He has filed the suit on behalf of Kenya Hospital Association which is an interested party in the matter.

“In the meantime, the orders issued on February 13, 2026 are extended,” Justice Mulwa said.