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ELCPartially AllowedNot stated in the judgment· [2019] KEELC 4697 (KLR)

Nelson Runji Njira v Gakuyo Real Estate Limited [2019] KEELC 4697 (KLR)

High Court of Kenya
14 February 2019
YAY.M. Angima
1,714 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's High Court blocked the sale and subdivision of disputed land but refused to force the handover of the title deed until the case is heard fully.

What this practically means

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Executive summary

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By a notice of motion dated 11th June 2018 under Order 40 of the Civil Procedure Rules, sections 1A, 1B, 3A and 63 of the Civil Procedure Act and sections 68 and 69 of the Land Registration Act 2012, the Plaintiff sought an inhibition against Land Reference No. Mbeere/Kirima/2968, a temporary injunction restraining the Defendant from interfering with, selling or subdividing the property, and a mandatory injunction compelling release of the original title deed. The Plaintiff alleged the Defendant had failed to pay the balance of the purchase price despite a completion notice and was subdividing the property for sale to the public. The Defendant, in a replying affidavit sworn by Moses Kariuki Mwangi, contended the balance was to be financed from sale of the property upon sub-division and that the dispute should be referred to arbitration under the agreement's arbitration clause. The court framed two issues: referral to arbitration and entitlement to interim orders. It declined to refer the dispute because the Defendant had not applied under section 6 of the Arbitration Act for a stay and had actively participated in the proceedings, and because section 7 permits interim measures from the High Court before or during arbitration. Applying Giella v Cassman Brown, the court found a prima facie case with probability of success and potential irreparable loss, given the Defendant's admitted default and frozen bank accounts. Citing Shivabhai Patel v Manibhai Patel, it held preservation of the property was the court's duty. The motion was allowed in terms of prayers 2 and 3 (inhibition and injunction); the mandatory injunction for release of the title deed was declined as a final order. Costs were in the cause.

Key legal issues

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01

Whether the dispute should be referred to arbitration notwithstanding the arbitration clause in the sale agreement

Holding

The court declined to decline jurisdiction; no application under section 6 of the Arbitration Act had been made and section 7 permits interim measures from the High Court before or during arbitration.

Reasoning

Clause 13 of the sale agreement provided for arbitration, but section 6 of the Arbitration Act requires an application for stay not later than entry of appearance. The Defendant made no such application and instead actively opposed the interim application. Section 7 confirms the High Court may grant interim measures of protection before or during arbitral proceedings. The first issue was answered in the negative.

p. 2
02

Whether the Plaintiff established a case for interim relief

Holding

The Plaintiff established a prima facie case with a probability of success and potential irreparable loss; an injunction and inhibition were granted to preserve the suit property.

Reasoning

The Defendant was in default of payment of the balance of the purchase price and had admitted inability to meet its obligations due to freezing of its bank accounts by the Sacco Societies Regulatory Authority. It depended on the sale of sub-divisions of the suit property to pay the balance. Preservation of the property was necessary to avoid a barren result if the Plaintiff ultimately succeeded, per Shivabhai Patel v Manibhai Patel.

p. 2

Legal principles established

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  • An interim injunction may be sought from the High Court notwithstanding an arbitration agreement, and a party who does not apply under section 6 of the Arbitration Act for stay and referral but instead actively participates in proceedings cannot have the dispute referred to arbitration.
  • It is the duty of the court to preserve property in issue in a suit to avoid a barren result.

Court orders

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  1. 1.An order of inhibition directed to the Land Registrar, Siakago Lands Registry, against Land Reference No. Mbeere/Kirima/2968 and any sub-divisions emanating therefrom, pending the conclusion of the suit or conclusive resolution of the dispute (Order No. 2 of the motion).
  2. 2.A temporary injunction restraining the Defendant, its agents, servants and employees from interfering with, selling, alienating, subdividing, leasing, charging, transferring or otherwise intermeddling with Land Reference Number Mbeere/Kirima/2968 and any sub-divisions therefrom, pending the conclusion of the suit or conclusive resolution of the dispute (Order No. 3 of the motion).
  3. 3.Costs of the application shall be in the cause.

Authorities

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Legislation

  • Civil Procedure RulesOrder 40 Rules 1, 2, 3 and 4
  • Civil Procedure Act (Cap 21 Laws of Kenya)Sections 1A, 1B, 3A and 63(c) & (e)
  • Land Registration Act 2012Sections 68 and 69
  • Arbitration Act No. 4 of 1995Sections 6 and 7

Cases cited (2)

  • Giella Vs Cassman Brown & Co Ltd
    [1973] E.A 358
  • Shivabhai Patel Vs Manibhai Patel
    [1959] EA 907
Jurisdiction invoked
Order 40 Rules 1, 2, 3 and 4 of the Civil Procedure Rules; sections 1A, 1B, 3A and 63(c) & (e) of the Civil Procedure Act (Cap 21); sections 68 and 69 of the Land Registration Act 2012

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Nelson Runji Njira v Gakuyo Real Estate Limited [2019] KEELC 4697 (KLR)", Case Analysis (2019). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/4697/eng@2019-02-14

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