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ELCDismissedELC Appeal No. 10 of 2017· [2021] KEELC 3489 (KLR)

Intercountries Importers & Exporters Ltd v Total Security Limited & 7 others [2021] KEELC 3489 (KLR)

Environment and Land Court
25 February 2021
2,690 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~11 min to read original · ~4 min brief

The bottom line

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A Kenyan court confirmed that tenants carrying on business in a premises are protected by rent law, even if their lease was never signed or stamped.

What this practically means

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Executive summary

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This was a first appeal to the Environment and Land Court at Milimani from a ruling of the Business Premises Rent Tribunal (Chairman Mbichi Mboroki) delivered on 10 February 2017, dismissing an application by Intercountries Importers and Exporters Ltd seeking to set aside eviction-restraining orders, consolidate and strike out BPRT References Nos. 902 and 903 of 2016 by Total Security Limited and Lemolok Limited, and join the 3rd to 8th Respondents. The dispute concerned LR No. 209/13238 off Ngong Road, Nairobi, whose ownership had been litigated in ELC 1400 of 2004, where the Appellant was held to be an innocent purchaser for value. The Appellant argued before the ELC that the Tribunal lacked jurisdiction, that the references were res judicata, sub judice and barred by lis pendens, that the tenancies were invalid for non-execution, non-stamping and lack of change of user, and that the Tribunal was bound by a consent order filed in the Court of Appeal. Obaga J, as a first appellate court, re-evaluated the proceedings and held that the Tribunal's jurisdiction was founded on the subsisting two-year tenancies under Cap 301; the tenants were protected tenants notwithstanding non-execution of one lease, and unstamped or unregistered tenancy agreements could operate as enforceable contracts. The references were not sub judice or barred by lis pendens as the parties and issues differed from the High Court and Court of Appeal proceedings, and the Tribunal Chairperson was under no obligation to implement the consent, which was subsequently set aside. The appeal was dismissed with costs to the 1st, 2nd and 3rd Respondents.

Key legal issues

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01

Jurisdiction of the Business Premises Rent Tribunal

Holding

The Tribunal had jurisdiction because the subsisting two-year tenancies were within Cap 301 and the tenants were protected tenants carrying on business on the premises

Reasoning

The references were founded on two-year tenancy agreements from 1 July 2015 to 30 June 2017 containing termination clauses. The Tribunal's jurisdiction is derived from the facts placed before it. Even the unexecuted lease of the 2nd Respondent did not matter, since the nature of the business carried out, not the document, determines whether there was a tenancy. The tenants were therefore protected tenants under Cap 301.

p. 3
02

Effect of non-execution and non-stamping of tenancy agreements

Holding

Non-execution and non-stamping did not bar reliance on the tenancies; an unregistered tenancy agreement can operate as an enforceable contract

Reasoning

The 2nd Respondent's lease was not executed, but it was in occupation operating its business and thus a protected tenant under Cap 301. The stamping objection was raised for the first time on appeal and was in any event untenable, as unregistered lease or tenancy agreements may operate as enforceable contracts between the parties.

p. 3
03

Res judicata, sub judice and lis pendens

Holding

The Tribunal references were neither res judicata, sub judice nor caught by lis pendens because the parties and issues before the Tribunal were different from those in ELC 1400 of 2004 and the Court of Appeal

Reasoning

The 1st and 2nd Respondents were not parties to ELC 1400 of 2004 or the Court of Appeal proceedings; the notice letters relied on were addressed to different entities. The 3rd Respondent remained in occupation and could lawfully let the property, so no lis pendens arose, and the Tribunal issue was distinct from the ownership dispute before the Court of Appeal.

p. 4
04

Obligation to implement the Court of Appeal consent

Holding

The Tribunal Chairperson was under no obligation to implement the consent order filed in the Court of Appeal; his observations on the consent were later vindicated when it was set aside

Reasoning

The consent of 27 September 2016 did not bind the Tribunal, whose reference involved protected tenants who were not parties to it. The Chairperson had observed the consent disregarded protected tenancies, and the Court of Appeal set the consent aside on 22 September 2019 partly for non-disclosure of the tenancies.

p. 4

Legal principles established

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  • The jurisdiction of the Tribunal is deduced from the facts put before it; an unexecuted lease does not defeat tenancy where the tenant in fact carries on business on the premises
  • An unregistered or unstamped lease or tenancy agreement can operate as an enforceable contract between the parties

Court orders

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  1. 1.The appeal is dismissed
  2. 2.Costs awarded to the 1st, 2nd and 3rd Respondents

Authorities

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Legislation

  • Landlord and Tenant (Business Premises) ActCap 301

Cases cited (2)

  • BP Nairobi Service Station Ltd Vs BP Kenya Ltd
    (1989) KLR
  • Sousa Figueiredo Vs Moorings Hotel Co. Ltd
    (1960) EA 926
On appeal from
Business Premises Rent Tribunal, Nairobi
Reference No. 902 & 903 (consolidated) of 2016
Jurisdiction invoked
First appellate jurisdiction under the Landlord and Tenant (Business Premises) legislation (Cap 301) against a Tribunal ruling; heard as an appeal from the BPRT

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, "Intercountries Importers & Exporters Ltd v Total Security Limited & 7 others [2021] KEELC 3489 (KLR)", Case Analysis (2021). ELC Appeal No. 10 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/3489/eng@2021-02-25

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