Flattening the insolvency curve: the adaptability and responsiveness of Kenya’s corporate insolvency law in tackling pandemic and economic depression insolvencies
Kieti, Denis Ndolo
The covid-19 viral pandemic has negatively affected global economic growth prompting governments across the world to set up fiscal and monetary policy interventions to mitigate the adverse effects of the pandemic on their economies. Kenya, as a consequence, similarly set up economic and financial support measures to forestall economic depression. Unlike some major economies such as the U.K. which modified their insolvency regimes to forestall pandemic insolvencies, there were no such amendments made to the Kenya’s Insolvency Act. This is despite the unpredictability presented with new more deadly covid-19 variants coming up, which has further dampened the pace of economic recovery. Utilising doctrinal and comparative research methods, this thesis has examined whether Kenya’s corporate insolvency law is adaptive and responsive in the event of an emergency and whether the objectives of the Insolvency Act, (Act No.18 of 2015) have been achieved following the ongoing pandemic. It has evaluated the adaptability and responsiveness of Kenya’s insolvency law to support companies during an economic depression; the kind brought about by the current pandemic. By referring to the vital elements of an efficient and effective insolvency framework outlined in the UNCITRAL Legislative Guide on Insolvency Law, it has been confirmed that Kenya’s current insolvency law is inadaptable and unresponsive to the unprecedented challenges of the pandemic or other emergency, such as an economic depression. Therefore, by examining how the United Kingdom has responded to the emergency, it has been established that Kenya can borrow critical lessons. The thesis has laid out recommendations on emergency policy and legislative reforms that could make the Kenyan insolvency framework better suited to supporting businesses during emergencies. There is limited research on insolvency law and legal reforms in Kenya touching on the pandemic and the thesis contributes to this literature on Kenyan corporate insolvency law by outlining the legal framework as it currently is and its limitations. The study contributes knowledge by analysing the theoretical framework underpinning insolvency law. It also outlines the international insolvency benchmarks by the IMF, World Bank and UNCITRAL and how these can influence Kenya. This literature on Kenyan corporate insolvency law is limited, and on this, the thesis is enlightening.
A Thesis submitted in partial fulfillment of the requirements of the Degree of Master of Laws, at Strathmore University
Insolvency curve, Kenya’s corporate insolvency law, Pandemic and economic depression