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ELCPartially AllowedPetition dated 24/4/2017 (Nairobi)· [2019] KEELC 4896 (KLR)

Postel Housing Co-operative Society Limited & another v Telkom Kenya Limited & another; Attorney General (Interested Party) [2019] KEELC 4896 (KLR)

Environment and Land Court
21 January 2019
BEB M Eboso
3,398 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

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A Kenyan court paused a land ownership petition because the same dispute was already in arbitration, letting an interim protection order lapse.

What this practically means

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Executive summary

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Postel Housing Co-operative Society Limited and Exclusive Estates Limited petitioned against Telkom Kenya Limited and Aftraco Limited, alleging violation of their constitutional rights to property, economic and social rights, and fair administrative action arising from Legislative Supplement No. 11 of 2001, which cancelled Legal Notice No. 154 of 1999 that had provided for excision of 60 acres from LR 7656 Ngong Road. They sought declarations of violation, annulment of the supplement, and a permanent injunction. The court had granted an interim preservatory order on 24/4/2017. Telkom Kenya then moved to set aside that order and to strike out the petition, arguing it was an abuse of process and forum shopping because ownership of the same land was pending before arbitrators Janmohamed and Gross pursuant to consents in Nairobi HCCC 1158/2011 and 443/2011. The Attorney General, joined as interested party, and Aftraco supported the application, alleging non-disclosure of the arbitration, the caveat and the Court of Appeal's reinstatement of the caveat. The petitioners opposed, contending the arbitrators could not rule on the legality of a legal notice. The court, B M Eboso J, held the dispute in substance concerned ownership of the suit property, identical to the arbitral disputes, and that proceeding would risk contradictory findings, offending Article 159(2)(c). Striking out was premature, but the suit was stayed pending the arbitration. The interim order was allowed to lapse since the Court of Appeal's decree reinstating the caveat already preserved the property.

Key legal issues

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01

Whether the petition was an abuse of process warranting striking out due to pending arbitration on the same ownership dispute

Holding

The dispute in the petition mirrors the pending arbitral proceedings; striking out was premature but a stay was warranted

Reasoning

The court found that the petition, though framed as a constitutional challenge to a Legislative Supplement, is in substance about ownership of LR 7656, the same issue pending before arbitrators Janmohamed and Gross pursuant to consents in HCCC 1158/2011 and 443/2011. Allowing it to proceed risked contradictory findings. Article 159(2)(c) enjoins courts to embrace arbitration. Striking out was nonetheless premature; a stay pending the awards was the just order.

p. 4
02

Whether the interim preservatory order should remain in force

Holding

It should lapse because the property is already preserved by the reinstated caveat

Reasoning

All parties agreed the Court of Appeal decree reinstating the caveat preserves the suit property and none could deal with it prejudicially during its subsistence. In the absence of evidence that preservation had ceased, a duplicate order from this court was unnecessary, so the interim order was allowed to lapse.

p. 4

Legal principles established

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  • A suit should only be summarily struck out in plain, hopeless cases; the appropriate remedy where parallel arbitral proceedings on the same issue are pending is a stay
  • Parties are bound by consensual referrals to arbitration and courts should not determine the same dispute in parallel

Court orders

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  1. 1.The suit is stayed pending disposal of the arbitration proceedings consensually initiated by the parties pursuant to the orders issued in Nairobi HCCC Number 1158/2011 and Nairobi HCCC Number 443/2011
  2. 2.The interim preservatory order issued on 24/4/2017 and subsequently extended shall not be extended further, the suit property remaining preserved by the decree of the Court of Appeal reinstating the caveat

Authorities

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Legislation

  • Constitution of Kenya, 2010Articles 25(a), 28, 29, 40, 43(1), 47(1) & (2), 159(2)(c)
  • Legal Notice No. 154 of 1999Serial No. 166
  • Legislative Supplement No. 11 of 2001-
  • Civil Procedure RulesOrder 2 rule 15

Cases cited (3)

  • D T Dobie and Company (Kenya) Limited v Joseph Mbaria Muchina & Another
  • YAYA TOWERS LIMITED v TRADE BANK LIMITED (IN LIQUIDATION)
    (2000) eKLR
  • PAOLA MURI v GIAN BATISTA MURI & ANOTHER
    CA No. 59 of 1999
Jurisdiction invoked
Article 40, 43 and 47 of the Constitution (constitutional petition); application under civil procedure framework including Order 2 rule 15 invoked

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, "Postel Housing Co-operative Society Limited & another v Telkom Kenya Limited & another; Attorney General (Interested Party) [2019] KEELC 4896 (KLR)", Case Analysis (2019). Petition dated 24/4/2017 (Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/4896/eng@2019-01-21

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