It will be a matter of fact whether the company should be wound up or not under this rule. It is a matter for the discretion of the court. “So a summary of the way to approach the issue of whether or not to wind up a company under the just and equitable rule is this. ![]() In Re Garnets Mining Co Ltd eKLR the Court held as follows: The ground of ‘just and equitable’ does not entail a particular definition or threshold, as such, in analyzing the said ground as a basis of issuing a Liquidation Order, Courts have held that the same is at the discretion of Court. As per the provisions of Section 425 of the Act, an application for liquidation of the company can be filed by among other parties, the company, its directors or contributories (shareholders).Īccordingly, directors and/or shareholders have in some instances moved Courts for a Liquidation Order on the ground of it is ‘just and equitable’ necessitating a pronouncement by Courts on whether the said ground is sufficient for grant of a Liquidation Order. The provisions pertaining to liquidation on the just and equitable ground are increasingly being tested before the Courts, case in point, being on the premise that that there is a deadlock or stalemate between the directors and/or contributories (shareholders) of the Company on who/how to conduct management and operations of the Company thus necessitating issuance of a liquidation order. ![]() Section 424 of the Insolvency Act, 2015 (hereinafter “ the Act”) provides for the circumstances under which a company can be dissolved by Court which includes when it is just and equitable to do so.
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