Agro Chem Housing Co-operative Society v Lake Holdings (Kenya) Limited [2016] KEELC 234 (KLR)
The bottom line
#A Kenyan court ruled that a co-operative could sue a developer despite an arbitration clause, because the land sale agreements at issue fell outside that clause.
What this practically means
#Executive summary
#Key legal issues
#Jurisdiction in view of the arbitration clause in the memorandum of understanding
The court has jurisdiction because the suit is based on the sale agreements of 6th August 2009, not solely on the memorandum containing the arbitration clause.
The memorandum of 17th May 2005 was not itself a sale agreement but a framework document on plot sizes, price and repayment terms. Its clause 1.8 bound only the parties who signed it. Since the suit is founded on the 2009 sale agreements between the Defendant and the Plaintiff and some members, the arbitration clause does not apply and Section 13(2)(d) of the ELC Act confers jurisdiction over disputes arising from contracts relating to land.
Whether the suit is statute barred
The suit is not statute barred as it was filed about three years, two months and three days from the date of the sale agreements, within the six-year period.
Limitation runs from the agreements on which the suit is based. The sale agreements are dated 6th August 2009 and the suit was filed on 10th October 2012, well within the six years prescribed by Section 4(1) of the Limitation of Actions Act for contract claims, and also within the twelve-year period under Section 7 for recovery of land.
Whether the Plaintiff has locus standi
The Plaintiff, a body corporate under the Co-operative Societies Act, has locus standi both in its own name and on behalf of its members under Order 1 rule 8(1).
The Plaintiff negotiated the memorandum on behalf of itself and its members and facilitated payments under clause 1.5. Its members passed a resolution on 31st July 2012 authorizing the suit. The plaint names 24 parties including the Plaintiff itself in respect of specific plots, and as a body corporate under Section 12 of the Co-operative Societies Act it has capacity to sue. Order 1 rule 9 cures any misjoinder or non-joinder.
Legal principles established
#- Where a suit is based not solely on an agreement containing an arbitration clause but on subsequent sale agreements, the arbitration clause in the earlier memorandum does not oust the court's jurisdiction.
- A suit founded on contracts for sale of land falls within the jurisdiction of the Environment and Land Court under Section 13(2)(d) of the Environment and Land Court Act.
- A co-operative society with capacity to sue may represent its members under Order 1 rule 8(1) of the Civil Procedure Rules where they share the same interest.
Court orders
#- 1.The preliminary objection raised by the Defendant to the Plaintiff's suit has no merit and is dismissed with costs.
- Jurisdiction invoked
- Section 13(2)(d) of the Environment and Land Court Act No.19 of 2011
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Agro Chem Housing Co-operative Society v Lake Holdings (Kenya) Limited [2016] KEELC 234 (KLR)", Case Analysis (2016). ELC Civil Suit (plaint dated 3rd October 2012, filed 10th October 2012). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2016/234/eng@2016-11-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.