High Court paves way for Nairobi Hospital's Sh4.2b medical investment

The High Court has lifted orders stopping The Nairobi Hospital’s board from running the affairs of the private institution.

Justice Peter Mulwa, in his ruling yesterday, said it would be “untidy” for him to sustain the orders he issued in a case filed by Dr Samuel Muchiri, as there were two other separate cases filed last year bordering on the same issues he raised.

Justice Mulwa was concerned that he could issue conflicting orders with Justice Freda Mugambi, who was handling the other cases.

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

.

Keep Reading business

•  State raises alarm over growing threat of e-waste, urges concerted efforts by all
•  KCB diversifies MSMEs offering with acquisition of fintech firm
•  Why every entrepreneur needs an exit strategy and how to create one
•  The power of values in driving organisational performance
•  Ecobank gets Sh3.5b capital injection boost

The hospital’s board chairperson, Dr Barcley Onyambu, in reaction to the ruling said the earlier orders were hindering the hospital from full-scale running.

“This decision will safeguard the continuity of vital healthcare services, the implementation of long-term infrastructure plans, and the financial stability required to provide quality healthcare to our patients,” said Onyambu.

In the case, Muchiri, through his lawyer Nelson Havi, asked the court to suspend the implementation of the resolutions on the election of directors of the board of management and of trustees of the Kenya Hospital Association of December 4, 2024, pending the hearing and determination of the case. 

He also asked the court to bar the board from borrowing money, offering its assets, or using them.

Muchiri claimed that he filed the case to save the hospital from going into debt, and that the hospital had a loss of Sh1.1 billion and debt to suppliers amounting to Sh3 billion.

He further claimed that the board and trustees intended to borrow Sh4.2 billion from offshore lenders. Muchiri claimed the hospital is in the wrong hands.

The hospital opposed the case through the board’s vice chairperson Samson Mbuthia.

At the same time, Dr Meschach Ong’uti, on behalf of the trustees asked the court to strike out the case.

They argued that from the onset, Havi was before the court with unclean hands.

According to them, the case smacked bad faith as the lawyer directly used the court’s orders to instigate a malicious mud-slinging campaign against the board.

Mbuthia and Ong’uti further argued that the orders sought were meant to cripple the hospital which was optimally functioning.

They asserted that the cases were a backdoor route to remove the directors. According to them, Muchiri was aware of the two cases filed last year adding that there was no evidence to show that they had mismanaged the hospital.

The court heard the Sh4.2 billion will have more than half of it allocated to medical equipment replacing old and outdated equipment that manufacturers have since ceased offering support and servicing of parts.

According to them, for example, the hospital’s linear accelerator, which is used to provide cancer treatment services, was acquired in 2012 and is no longer supported by the vendor.

They also argued that new equipment guarantees a return on investment, given that the hospital will generate revenue from its use and offer patients quality healthcare.

Justice Mulwa also heard that some of the new medical equipment were in the procurement process.