Mary Waithera Gikima & another v Kariuki Wairagu & 3 others [2019] KEELC 4087 (KLR)
The bottom line
#A Kenyan land buyer who paid KSh 29 million got court protection of his money and title deed after sellers delayed too long in invoking their arbitration clause.
What this practically means
#Executive summary
#Key legal issues
#Stay of proceedings under Section 6 of the Civil Procedure Act where the substratum of the suit is pending before the Family/Succession Court
The suit is stayed pending the hearing and determination of the Kiambu High Court Succession Cause (Kiambu HCCCA No.58 of 2018), as the issue of the proper legal representative of the estate of Njoroge Gikima can only be determined by the High Court in a Succession Cause
The court noted its earlier Ruling of 19th August 2016 identifying the substratum as who is the proper representative of the estate of Njoroge Gikima to inherit the suit property. That issue was pending before the Kiambu High Court in a succession cause. An Environment and Land Court is not seized of jurisdiction over succession matters, and Section 6 of the Civil Procedure Act bars trial of a suit where the matter in issue is directly and substantially in issue in a previously instituted proceeding.
Waiver of the right to arbitration under Section 6(1) of the Arbitration Act
The 1st-3rd Defendants waived their right to arbitration by failing to apply at the time of entering appearance or filing pleadings; they filed a Reply to the 4th Defendant's Cross-claim before bringing the application
Section 6(1) of the Arbitration Act requires an application for stay and referral to arbitration not later than the time of entering appearance or filing pleadings. The 4th Defendant filed its Cross-claim on 18th May 2017 and the Defendants thereafter filed a Reply, taking more than 14 days to file the application. Relying on Fairlane Supermarket Ltd v Barclays Bank Ltd and Lofty v Bedouch Enterprises Ltd, the court held the right was waived.
Preservation of the sale consideration and title deed under the inherent powers (Sections 1A and 3A, Civil Procedure Act)
The 1st-3rd Defendants are compelled to deposit the Kshs.29,000,000/= consideration in an interest-earning account in the joint names of counsel, and the title deed is to be deposited in court, pending the outcome of the Kiambu succession cause
The 4th Defendant paid Kshs.29,000,000/= as consideration. If the grant issued to the 3rd Defendant is revoked, the sale risks being declared null and void and the title cancelled. The 1st-3rd Defendants sold the property while a valid judgment in Thika CMCC No.1123 of 2000 remained unupset, actions the court found mired with deceit and material non-disclosure. Preservation under Sections 1A and 3A was necessary to prevent the 4th Defendant's potential recovery being rendered nugatory.
Legal principles established
#- Where a matter in issue in a suit is directly and substantially in issue in a previously instituted proceeding between the same parties or parties claiming under the same title, the court must stay the suit under Section 6 of the Civil Procedure Act
- A party who does not apply for a reference to arbitration at the time of entering appearance or filing pleadings, and instead takes steps in the proceedings, waives the right to arbitration under Section 6(1) of the Arbitration Act
Court orders
#- 1.The 1st, 2nd and 3rd Defendants' Notice of Preliminary Objection dated 19th January 2018 is dismissed, with costs to the 4th Defendant
- 2.Prayer No.1 of the 1st-3rd Defendants' Notice of Motion dated 28th February 2018 (referral to arbitration/striking out the 4th Defendant's Notice of Claim) is dismissed, with costs to the 4th Defendant
- 3.Prayer No.2 of the 1st-3rd Defendants' Notice of Motion dated 28th February 2018 is allowed - the suit is stayed pending the hearing and determination of Kiambu High Court HCCCA No.58 of 2018
- 4.The 4th Defendant's Notice of Motion dated 28th February 2018 is allowed in terms of prayers no.2 and 3, with costs in the cause
- 5.The 1st-3rd Defendants are compelled to deposit the monies paid as consideration in an interest-earning account in the joint names of the Advocates for the 4th Defendant and the 1st-3rd Defendants, to be opened forthwith, with the monies deposited within 45 days from the date of the Ruling
- 6.The title deed to the suit property held by the 4th Defendant is to be deposited in court and held under lock and key until the final determination of Kiambu High Court HCCCA No.58 of 2018 and/or until further orders of the Court
- Jurisdiction invoked
- Sections 1A, 1B, 3A and 63(c) of the Civil Procedure Act; Order 51 and Order 11 Rule 3(2)(a) of the Civil Procedure Rules; Sections 1A and 3A of the Civil Procedure Code Cap 21; Environment and Land Court Act jurisdiction
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mary Waithera Gikima & another v Kariuki Wairagu & 3 others [2019] KEELC 4087 (KLR)", Case Analysis (2019). ELC Suit (Thika) – the judgment does not state the suit number. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/4087/eng@2019-03-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.