The High Court has issued orders temporarily stopping an insolvency petition filed against Old Mutual Life Assurance Company, offering the insurer a reprieve as it battles financial claims linked to unpaid commissions.
Justice David Majanja granted the order pending the hearing of the case filed by financial advisor Samuel Wambugu, who is seeking to have Old Mutual declared insolvent for allegedly failing to settle Sh4.3 million in commission arrears.
In his application, Wambugu claims the company has failed to honour a consent agreement entered in January this year, which committed the insurer to pay the amount within 30 days. The commission arrears arose from services rendered in 2021.
Justice Majanja said, “Pending hearing and determination of this application, there shall be a temporary stay of proceedings in the insolvency petition.” The judge directed parties to file their responses ahead of the hearing set for May 27.
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Old Mutual, in its defence, argues that the petition is premature and intended to coerce the firm into settling a disputed debt. The company further maintains that it is solvent and capable of meeting its financial obligations, citing assets exceeding Sh16 billion.
The insurer says it has already paid Sh1.3 million and that the remaining amount is the subject of ongoing reconciliation.
“The invocation of insolvency proceedings is not justified in the circumstances, especially when the debt is not liquidated or undisputed,” the firm submitted through its lawyers.
Wambugu however, insists that Old Mutual acknowledged the debt in the consent recorded before the Employment and Labour Relations Court and that the company has failed to act in good faith.
The court’s intervention now places the matter under judicial scrutiny, as Old Mutual seeks to fend off reputational damage and a potential insolvency declaration while resolving the outstanding dispute.
