Kwale Sugar Faces Liquidation Guillotine as Supreme Court Slams Door on Last-Ditch Rescue Bid

The once-promising jewel in Kenya’s sugar sector now stares into the abyss. Kwale International Sugar Company Limited has suffered a devastating legal knockout at the Supreme Court, losing its desperate attempt to halt insolvency proceedings that could see the Mauritius-backed miller auctioned off to the highest bidder.

In a stinging rebuke delivered by a five-judge bench on May 23, 2025, the apex court not only dismissed Kwale Sugar’s application but essentially accused the company of judicial gymnastics, attempting to leapfrog established legal channels in what appears to be a last gasp for survival.

The ruling clears the runway for EPCO Builders Limited to proceed with its bankruptcy petition over a Sh405 million debt, a legal battle that has dragged on since 2019 and now threatens to write the final chapter in Kwale Sugar’s turbulent saga.

The Supreme Court’s judgment was unequivocal and unsparing. The judges made clear that Kwale Sugar had fundamentally misunderstood the court’s jurisdiction, seeking relief that would require the apex court to override the High Court while an appeal at the Court of Appeal remained pending.

“The petition of appeal No. E007 of 2025 filed in this court only challenges the decision of the Court of Appeal as it should and not that of the High Court. Yet the entire motion is about the decision of the High Court that gave rise to the first appeal in the Court of Appeal, which is now the subject matter of petition of appeal No. E007 of 2025 pending before the court.

The court cannot frog-leap the Court of Appeal to provide relief to a party before the High Court. To do so would be inconsistent with its jurisdiction. For these reasons, we find no merit in this application and accordingly dismiss it,” the bench declared with finality.

The implications are seismic. With the Supreme Court slamming the door shut, Kwale Sugar now faces the full force of insolvency proceedings at the High Court with no legal shield remaining.

The miller’s Mauritius-based investors, who pumped billions into what was supposed to be a transformative agricultural project along the Coast, must now contemplate the very real possibility of liquidation and asset sales.

At the heart of this corporate melodrama lies a bitter contractual dispute rooted in grand ambitions gone sour.

EPCO Builders was contracted to construct a state-of-the-art sugar factory for Kwale Sugar in a deal valued at Sh2.2 billion. What should have been a marriage of engineering prowess and agricultural transformation instead descended into acrimony and accusation.

Kwale Sugar insists the Sh405 million demand is baseless, pointing fingers at EPCO for alleged non-performance and contractual breaches.

The company has repeatedly argued that the dispute should be settled through arbitration, as stipulated in the original construction contract, rather than through the nuclear option of insolvency proceedings that could obliterate the company entirely.

But the courts have shown no appetite for Kwale Sugar’s arguments.

Both the High Court and the Court of Appeal rejected the company’s attempts to halt the insolvency petition, ruling that EPCO’s claim was substantial enough to warrant bankruptcy proceedings. The Supreme Court has now added the final seal to this judicial consensus.

The Kwale Sugar disaster represents more than just another corporate casualty. It symbolizes the challenges plaguing Kenya’s sugar sector, where grand visions collide with harsh commercial realities, contractual disputes metastasize into existential threats, and foreign investors discover that Kenyan sugar is anything but sweet.

For the Coast region, the potential collapse of Kwale Sugar would be catastrophic. The miller was supposed to anchor economic transformation in a marginalized area, creating jobs, stimulating cane farming, and demonstrating that agriculture could be a pathway to prosperity.

Instead, it may become a cautionary tale of ambition undone by mismanagement and legal warfare.

As the insolvency petition now proceeds unimpeded at the High Court, Kwale Sugar’s options have narrowed to a desperate corridor. The company must either settle with EPCO, find fresh capital to clear the debt, or face the liquidators.

The clock is ticking, and the Supreme Court has just removed the last buffer between survival and obliteration.

The saga serves as a brutal reminder that in Kenya’s unforgiving business landscape, even the mightiest can fall, and the courts will not rescue those who exhaust their legal options through what increasingly looks like procedural desperation rather than substantive justice.