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ELCAllowedEldoret ELC No. 267 of 2014 (consolidated with Eldoret ELC No. 632 of 2012)· [2020] KEELC 2854 (KLR)

Kenya Railways Corporation v Mamusu Enterprises Ltd & 3 others [2020] KEELC 2854 (KLR)

Environment and Land Court
7 May 2020
1,126 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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Eco Bank Kenya Ltd, the 1st Defendant in Eldoret ELC No. 267 of 2014, moved the Environment and Land Court at Eldoret by a Motion dated 13th June 2019 seeking to set aside the order of 11th June 2015 consolidating that suit with Eldoret ELC No. 632 of 2012, and to have ELC No. 267 of 2014 transferred to the High Court at Eldoret. The applicant contended that ELC No. 267 of 2014, commenced by Eldoret Hotel Limited, was a commercial dispute over which, following the Court of Appeal's decision in Co-operative Bank of Kenya Ltd v Patrick Kangethe Njuguna [2017] eKLR, jurisdiction lies with the High Court. Kenya Railways Corporation, the plaintiff in ELC No. 632 of 2012 (a land ownership dispute over Eldoret Municipality/Block 3/58 against Mamusu Enterprises Ltd and others), opposed, arguing that the applicant's participation in the consolidation proceedings precluded it from unsettling that order. The Court framed three issues: its jurisdiction over ELC No. 267 of 2014, whether a reasonable case for setting aside the consolidation and transferring the suit had been made, and costs. It held that the two consolidated suits raised distinct disputes: the land dispute fell squarely within the ELC's jurisdiction under Article 162(2)(b) of the Constitution and Section 13 of the ELC Act, but the commercial dispute belonged to the High Court after the 2017 Court of Appeal decision by which the ELC is bound. Because jurisdiction cannot be conferred or divested by consent, prior participation in the consolidation proceedings was no bar. The Court allowed the Motion, set aside the consolidation order, transferred ELC No. 267 of 2014 to the High Court at Eldoret, and ordered each party to bear their own costs of the application.

Key legal issues

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01

Jurisdiction over commercial disputes in the ELC

Holding

ELC No. 267 of 2014 is a commercial dispute over which the ELC lacks jurisdiction following the Court of Appeal's decision in Co-operative Bank of Kenya v Patrick Kangethe Njuguna [2017] eKLR; jurisdiction lies with the High Court.

Reasoning

The dispute in ELC No. 267 of 2014 commenced by Eldoret Hotel Limited against Eco Bank Kenya Limited was commercial in nature. Before the Court of Appeal's decision of 12th October 2017, such matters were filed in the ELC, and the consolidation order reflected that earlier position. Once the Court of Appeal clarified that commercial disputes fall to the High Court, the ELC was bound and could no longer retain the suit.

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02

Effect of participation in the consolidation proceedings

Holding

Counsel's participation in the proceedings leading to the consolidation order does not bar the applicant from moving the Court to set it aside, because jurisdiction cannot be conferred by consent.

Reasoning

Kenya Railways Corporation argued that Eco Bank's participation in the consolidation proceedings barred it from seeking to unsettle the order. The Court rejected this, holding that the consolidation order reflected the jurisdictional position prevailing before the Court of Appeal's 2017 decision, and since jurisdiction cannot be divested or conferred by consent, the Motion was a legitimate attempt to comply with the appellate verdict.

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03

Jurisdiction over ELC No. 632 of 2012

Holding

The dispute in ELC No. 632 of 2012 over ownership of Eldoret Municipality/Block 3/58 falls squarely within the ELC's jurisdiction under Article 162(2)(b) of the Constitution and Section 13 of the Environment and Land Court Act.

Reasoning

Kenya Railways Corporation sued Mamusu Enterprises Ltd and others over title to the suit land. The pleadings confirmed the dispute was over ownership of land, which falls squarely within the Environment and Land Court's jurisdiction under Article 162(2)(b) of the Constitution and Section 13 of the ELC Act, so that suit properly remains before the ELC.

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Legal principles established

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  • Jurisdiction in commercial disputes, including mortgage realization disputes following Co-operative Bank of Kenya Ltd v Patrick Kangethe Njuguna, lies with the High Court and not the Environment and Land Court.
  • Jurisdiction cannot be divested or conferred by consent of the parties; participation in proceedings leading to a consolidation order does not bar a party from seeking to set it aside on jurisdictional grounds.
  • The Environment and Land Court is bound by Court of Appeal decisions.

Court orders

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  1. 1.The order of 11th June, 2015 consolidating Eldoret ELC No. 267 of 2014 and 632 of 2012 is hereby set aside.
  2. 2.Eldoret ELC No. 267 of 2014, being a commercial dispute, is ordered to be separated from the consolidated record and transferred to the High Court Eldoret for hearing and determination, with a mention date to be fixed before the duty Judge, High Court, Eldoret.
  3. 3.Each party bears their own costs in the application.

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 162(2)(b)
  • Environment and Land Court Act No. 19 of 2011Section 13

Cases cited (1)

  • Co-operative Bank of Kenya Ltd Vs Patrick Kangethe Njuguna & 7 Others
    [2017] eKLR
Jurisdiction invoked
Article 162(2)(b) of the Constitution of Kenya, 2010 and Section 13 of the Environment and Land Court Act No. 19 of 2011

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, "Kenya Railways Corporation v Mamusu Enterprises Ltd & 3 others [2020] KEELC 2854 (KLR)", Case Analysis (2020). Eldoret ELC No. 267 of 2014 (consolidated with Eldoret ELC No. 632 of 2012). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/2854/eng@2020-05-07

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