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ELCStruck OutELC Case (Garissa) – Plaint dated 23rd July 2016, filed 28th July 2016· [2019] KEELC 2921 (KLR)

Afro Pride Limited v Zhongmei Engineering Group Ltd & another [2019] KEELC 2921 (KLR)

Environment and Land Court
18 June 2019
ECE. C. Cherono
2,094 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Environment and Land Court struck out a Kshs 2 billion mining claim because the licence holder skipped the mandatory dispute process under the Mining Act.

What this practically means

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Executive summary

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The plaintiff sued claiming that Special Licence No. 323, re-granted on 24th May 2016 under the repealed Mining Act (Cap. 306), gave her exclusive rights to prospect and explore gypsum in Balambala Sub-County, Garissa over approximately 542.5 square kilometres. She alleged that the defendant, constructing the Nuno-Modogashe Road (C8), was excavating the same gypsum, breaching her exclusive rights, and sought an injunction and damages of Kshs. 2,000,000,000 for lost revenue. The defendant joined a third party contractor under a 3rd November 2015 road construction contract, seeking contribution or indemnity, and asserted that the contract required the Engineer to approve borrow pit sites. The third party filed a preliminary objection contending that the court lacked jurisdiction under Part IX, particularly Section 155, of the Mining Act No. 12 of 2016, and that Section 67(a) of the Kenya Roads Act, 2007 had not been complied with. Both the third party and the defendant submitted that Clause 28 of the special licence required disputes to be referred to the Commissioner of Mines and Geology, whose functions had devolved to the Cabinet Secretary under the 2016 Act, so the suit was premature. The plaintiff filed no submissions. Relying on the exhaustion doctrine as applied in Geoffrey Muthinja and related authorities, the court held that Part IX of the Mining Act, 2016 governed the dispute and that the plaintiff had to first invoke the statutory mechanisms before the Cabinet Secretary. The suit was struck out with costs to the defendant and third party, the plaintiff also bearing the costs of the preliminary objection.

Key legal issues

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Whether the ELC had jurisdiction over a dispute arising from a special licence under the Mining Act before exhaustion of statutory dispute resolution mechanisms

Holding

The court lacked jurisdiction; the provisions of Part IX of the Mining Act, 2016 apply to the dispute and the plaintiff was required to first refer the dispute to the Cabinet Secretary under Sections 153(5), 153(6) and 155

Reasoning

Clause 28 of the special licence required disputes to be referred to the Commissioner (whose functions under the repealed Act devolved to the Cabinet Secretary). Section 155 of the Mining Act, 2016 empowers the Cabinet Secretary to determine disputes including wrongful acts committed in the course of prospecting and mining operations. Section 153(5) and (6) prescribe negotiation and reference to the Cabinet Secretary. Applying the exhaustion doctrine, the suit was premature and the court struck it out.

p. 3

Legal principles established

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  • Where a dispute resolution mechanism exists outside courts, the same must be exhausted before the jurisdiction of the court is invoked
  • Where there is a clear procedure for redress prescribed by an Act of Parliament, that procedure must be strictly followed

Court orders

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  1. 1.The suit is struck out for being premature as the plaintiff did not exhaust the internal dispute resolution mechanisms provided under statute
  2. 2.Costs of the suit and of the preliminary objection awarded to the defendant and the third party, to be borne by the plaintiff

Authorities

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Legislation

  • Mining Act (Cap. 306, repealed)Section 17(2)(b); Sections 61 and 62
  • Mining Act No. 12 of 2016Sections 153(5), 153(6), 154, 155; Part IX
  • Kenya Roads Act, 2007Section 67(a)
  • Constitution of KenyaArticle 165
  • Civil Procedure RulesOrder 53

Cases cited (10)

  • Speaker of the National Assembly –Vs- James Njenga Karume
    (1992) eKLR
  • SIMONASH Investment Ltd – Vs- Kenya National Highways Authority & 2 Others
    ELC Case No. 109 of 2017 (unreported)
  • Michael Otieno Nyaguti & 5 Others –Vs- Kenya National Highways Authority & 5 Others
    (2015) eKLR
  • Rianna Furaha Children Home –Vs- Kenya National Highways Authority
    (2016) eKLR
  • Unilever Tea Kenya Limited –Vs- National Land Commission & 2 Others
    (2017) eKLR
  • Boro Dika –Vs- Gulsan Insaaat Sanay, Turism & Another
    (2018) eKLR
  • International Centre for Policy and Conflict & 5 Others –Vs- The Hon. Attorney General & 5 others
    (2013) eKLR
  • Machira Limited –Vs- China Wu Yi Limited & Another
    (2018) eKLR
  • Francis Actan Parsimei & Others –Vs- National Alliance Party and others
    Nairobi Petition No. 356 of 2012 (unreported)
  • Geoffrey Muthinja & Another –Vs- Samuel Muguna Henry & Others
    (2015) eKLR
Jurisdiction invoked
Article 165 Constitution / Environment and Land Court jurisdiction; challenged by the third party's preliminary objection under Part IX of the Mining Act No. 12 of 2016 and Section 67(a) of the Kenya Roads Act, 2007

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Afro Pride Limited v Zhongmei Engineering Group Ltd & another [2019] KEELC 2921 (KLR)", Case Analysis (2019). ELC Case (Garissa) – Plaint dated 23rd July 2016, filed 28th July 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/2921/eng@2019-06-18

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.