Mediheal loses bid to stop sale of hospital equipment

Mediheal Group of Hospitals in Eldoret on April 23, 2025. [File, Standard]

Mediheal Hospital & Fertility Centre Ltd has lost its bid to stop the attachment and sale of medical equipment after the High Court dismissed its suit for want of prosecution, clearing the way for the repossession and disposal of the disputed assets.

In a ruling delivered on January 20, 2026, Justice Reuben Nyakundi held that Mediheal had failed to take meaningful steps to prosecute the case since filing it in May 2024, despite having secured interim court orders. The judge found the delay prolonged, inexcusable and prejudicial to the defendants.

The dispute arose after NCBA Bank, through Philips International Auctioneers, moved to proclaim and attach hospital equipment over alleged financial obligations owed by Mediheal.

The hospital moved to court under a certificate of urgency seeking temporary injunctions to restrain the bank and the auctioneer from interfering with its possession of the equipment or proceeding with an auction pending determination of the suit.

Mediheal argued that it is a renowned medical facility providing critical healthcare services across Kenya and maintained that it had been diligently servicing its loan obligations. It contended that the proclaimed equipment did not belong to it, but had been leased from Jamii Bora Leasing Limited, rendering the intended attachment unlawful.

The hospital further submitted that the equipment was vital to its operations and that its removal would cripple service delivery and occasion irreparable loss to both the institution and its patients. It insisted that execution should be halted until the legality of the proclamation and auction was fully determined.

However, an intended interested party later applied to be joined as a third defendant, claiming absolute ownership of the equipment under a Master Lease Agreement entered into with Mediheal in August 2018. The party stated that the lease had been lawfully terminated after Mediheal allegedly defaulted on monthly rental payments.

In an affidavit sworn by its asset manager, David Khisa, the interested party said Mediheal had accrued rent arrears exceeding Sh29 million and breached undertakings authorising direct debit payments through NCBA Bank. It said demand and termination notices were issued, but Mediheal declined to surrender the equipment, necessitating repossession through the auctioneer.

The interested party accused Mediheal of approaching the court with unclean hands by failing to disclose the lease agreement and misrepresenting ownership of the equipment. It denied claims that Jamii Bora Leasing Limited owned the assets, stating it had fully settled supplier invoices and obtained exclusion letters from other financiers with security interests over Mediheal’s assets.

Despite numerous applications and affidavits, Justice Nyakundi observed that no substantive steps had been taken to prosecute the main suit since May 6, 2024. He noted that the matter had been dominated by interlocutory applications, some of which were never pursued to conclusion.

The judge held that there was no evidence of efforts to resolve the dispute out of court or to move the matter towards hearing, adding that the defendants had been prejudiced by the prolonged delay.

“The court finds that the delay is prolonged and inexcusable,” Justice Nyakundi ruled, adding that justice could no longer be served by allowing the suit to remain pending indefinitely.

Consequently, the court dismissed Mediheal’s suit for want of prosecution, effectively removing any legal impediment to the repossession and sale of the equipment.