Hadiko Company Limited & another v I & M Bank Limited & 5 others [2021] KEELC 934 (KLR)
The bottom line
#Kenya's Environment and Land Court refused to throw out a land suit over missing company board authority, confirming such proceedings can be fixed later.
What this practically means
#Executive summary
#Key legal issues
#Whether the 2nd Plaintiff had locus standi to institute the suit on behalf of the 1st Plaintiff company without a board resolution
The Preliminary Objection on locus standi failed because it depended on facts requiring trial evidence, and unauthorized proceedings may be ratified later
The court noted the dispute concerns land involving two directors of one company, one of whom transferred the land without disclosing any company resolution. The 2nd Plaintiff claimed she funded the acquisition and would suffer irreparable loss. The objection was raised after hearing commenced and did not particularize points of pure law; the court associated itself with authority that unauthorized proceedings can be ratified.
Whether the ELC had jurisdiction over the dispute
The court found jurisdiction existed as the fulcrum of the claim was a dispute over land, within the court's mandate
The court observed that the claim revolved around a land dispute involving the only two directors of a company, with one director disposing of the land to a third party. The 2nd Defendant, claiming to be a director, did not show he obtained a company resolution when disposing of the land. The land dispute fell within the Land Act 2012 and Land Registration Act 2012 as pleaded.
Whether the Preliminary Objection was properly founded on points of law
The objection was ambiguous and required ascertainment of facts beyond the pleadings, so it was defective
The court found the 2nd Defendant mischievously raised the objection after the hearing commenced, had not particularized the points of law, and sought to block the 2nd Plaintiff from being heard contrary to her right to be heard. Upholding it would require viva voce evidence on substantive issues.
Legal principles established
#- Proceedings commenced without proper authority may subsequently be ratified and are not fatal to the suit
- Jurisdiction is fundamental and must be addressed first where raised
Court orders
#- 1.The Notice of Preliminary Objection dated 22nd February, 2021 is dismissed
- 2.Costs will be in the cause
- Jurisdiction invoked
- Articles 70 and 165 of the Constitution of Kenya 2010, and the Land Act 2012 and Land Registration Act 2012 (as contended by the Plaintiffs)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Hadiko Company Limited & another v I & M Bank Limited & 5 others [2021] KEELC 934 (KLR)", Case Analysis (2021). Not stated in the ruling. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/934/eng@2021-11-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.