The High Court has ordered Naipa Supermarket Limited and New Kenya Co-operative Creameries Limited (KCC) to maintain the status quo while it considers an application seeking to preserve the dairy processor’s assets and funds in a Ksh.420 million claim.
In directions issued on October 12, 2026, the court ordered Naipa to serve KCC with the application by close of business on October 14, allowing the dairy processor seven days from the date of service to file and serve its response.
The matter is scheduled for an inter partes hearing on October 22, 2026, when both parties are expected to present their positions.
The status quo order means the existing state of affairs must be maintained as the court considers the application. The court is yet to determine whether to grant the specific preservation orders sought by Naipa.
Yesterday, Naipa Supermarket moved to court through lawyer Phillip Nyachoti, seeking orders to restrain KCC from disposing of its assets or transferring funds from its bank accounts, citing fears that planned restructuring of the dairy processor could jeopardise recovery of its Sh420 million claim.
The supermarket wants the court to prohibit KCC from selling, transferring, charging, leasing or otherwise disposing of its factories, machinery, vehicles, equipment and other properties pending the hearing and determination of the application and the subsequent arbitration proceedings.
It is also seeking orders restraining KCC, its agents and financial institutions from withdrawing, transferring or dissipating funds held in the company’s bank accounts.
Naipa is further asking the court to compel KCC to provide security for the claim within 14 days of service of the order.
The proposed security would be in the form of an irrevocable bank guarantee issued by a reputable commercial bank in Kenya or a cash deposit into an interest-earning joint escrow account held in the names of the parties’ advocates.
Should KCC fail to provide the security, Naipa wants the court to order the attachment of the processor’s factories, real estate and fixed assets pending the determination and enforcement of the arbitral award.
The dispute stems from a distribution agreement dated January 1, 2022, which provides for arbitration under Clause 18(b) as the mechanism for resolving disputes between the parties.
According to Naipa, arbitration proceedings were instituted in accordance with directions issued by the court on December 1, 2025, with hearings scheduled for November 5 and 18, 2026.
The supermarket says recent government policy announcements concerning the restructuring and modernisation of KCC have heightened concerns over the preservation of the company’s assets before the arbitration is concluded.
The application cites pronouncements made by President William Ruto during the Agriculture and Food Systems Transformation Summit held at the Jamhuri Park ASK Showground in Nairobi between October 7 and 9, 2026.
Among the developments cited is a proposed government settlement of approximately Ksh.8 billion in outstanding debts and liabilities owed by KCC through the forthcoming Supplementary Budget.
Naipa also points to proposed changes and modernisation of KCC’s milk processing plants, machinery and supply infrastructure, alongside the reorganisation of its financial operations and payment obligations to dairy farmers.
The supermarket argues that these developments create a reasonable apprehension that KCC could transfer, dispose of, or otherwise dissipate its assets and funds before the arbitration concludes.
It contends that such transactions could undermine its ability to recover any amount awarded in its favour, potentially rendering the arbitration proceedings ineffective.
Naipa says it moved to court promptly following the October policy announcements to preserve the assets and funds that may be required to satisfy a future arbitral award.
The application is supported by an affidavit sworn by the supermarket’s managing director, Anthony Munene Kibetu.
The court is yet to determine the application seeking the substantive preservation orders. The parties are expected to appear before the court on October 22, 2026, for an inter partes hearing.