Legend Petroluem Equipments Ltd v Vickers Commercial Company Ltd [2018] KEELC 858 (KLR)
The bottom line
#A Kenyan court ruled that including a land injunction in your claim keeps the case in the Environment and Land Court, and filing a defence forfeits your right to insist on arbitration.
What this practically means
#Executive summary
#Key legal issues
#Whether the ELC has jurisdiction over a construction contract dispute where a permanent injunction over the suit land is also sought
The injunction prayer concerning use of the suit property brings the claim within the court's jurisdiction; the claim for liquidated damages does not, per se, oust it
The court perused the plaint and prayers, noting the primary dispute is over terms of a construction contract and payment of a balance of Kshs.8,111,801.90. However, the plaintiff also sought a permanent injunction restraining the defendant from leasing, transferring, alienating or disposing of the suit property. That prayer addresses use of the suit property, bringing the claim within Article 162(2)(b) and Section 13 of the Environment and Land Court Act.
Whether the arbitration clause ousted the court's jurisdiction
It did not; the defendant never applied for a stay under Section 6 of the Arbitration Act and, having filed a defence and taken further steps, lost its right to seek a stay
Section 10 bars court intervention only except as provided in the Act; Section 6 requires a stay application not later than entering appearance or otherwise acknowledging the claim. The defendant entered appearance on 15th January 2018, then filed a defence, the preliminary objection and a replying affidavit without any stay application. Following Adrec Limited v Nation Media Group Limited, the right to a stay is lost once a defence is filed, whereupon the party submits to the court's jurisdiction.
Whether the suit should in any event be transferred to a court of competent pecuniary jurisdiction
Yes; the value of the subject matter falls within the pecuniary jurisdiction of the subordinate court, so the suit was transferred to the Chief Magistrate's Court, Nakuru
Although satisfied the preliminary objection lacked merit, the court noted the subject matter value falls within the subordinate court's pecuniary jurisdiction. Relying on Article 159(2)(d) of the Constitution and Sections 1A and 1B of the Civil Procedure Act, and the substantive-justice principle in Martha Wangari Karua v IEBC, the court held parties should not be made to file fresh suits at extra expense, and transferred the suit rather than striking it out.
Legal principles established
#- A valid preliminary objection must be a pure point of law, argued on the assumption that the facts pleaded by the other side are correct, and cannot be raised where facts must be ascertained or discretion exercised
- The right to seek a stay of proceedings under Section 6(1) of the Arbitration Act is lost once a defence is filed, by which the party submits to the court's jurisdiction
Court orders
#- 1.This suit is hereby transferred to Chief Magistrate's Court Nakuru for hearing and determination
- 2.Costs of the preliminary objection shall be in the cause
- Jurisdiction invoked
- Article 162(2)(b) of the Constitution of Kenya and Section 13 of the Environment and Land Court Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Legend Petroluem Equipments Ltd v Vickers Commercial Company Ltd [2018] KEELC 858 (KLR)", Case Analysis (2018). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/858/eng@2018-10-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.