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ELCDismissedEnvironment & Land Case E015 of 2022· [2023] KEELC 16715 (KLR)

Lesedi Developers Limited v Mwangi

Environment and Land Court
29 March 2023
LGL. N. Gacheru
2,782 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~11 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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Lesedi Developers Limited sued Francis Njoroge Mwangi by Originating Summons seeking a refund of Kshs 3,500,000 plus all sums paid under a Sale Agreement dated April 21, 2022 for the purchase of ten acres to be excised from parcel Kakuzi/Kirimiri Block 7/162 for Kshs 35,000,000. Contemporaneously it filed a Notice of Motion dated August 23, 2022 seeking an injunction restraining the Respondent from selling or dealing with the suit property pending trial. The Applicant alleged the Respondent prematurely and unlawfully terminated the agreement despite compliance; the Respondent countered that the Applicant breached the agreement by late issuance and bouncing of post-dated cheques, that termination followed Clause 8, and that the Applicant had not exhausted the contractual dispute resolution mechanism. The Applicant did not submit on exhaustion. The Court, per L. N. Gacheru J, examined Clause 20 of the Sale Agreement, which required amicable negotiation and mediation, with court access limited to appeals from a mediator or interim relief pending mediation. Finding no pending mediation and no ambiguity in the agreement, and applying the literal rule of interpretation together with the principle that courts cannot re-write contracts (National Bank of Kenya Ltd v Pipeplastic Samkolit), the Court held the suit was not properly before it. The injunction application was dismissed entirely and the parties were referred to mediation under Clause 20 within 21 days, with Court-Annexed Mediation recommended as an option. No costs order was recorded.

Key legal issues

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01

Whether the suit was properly before the Court notwithstanding the mediation clause

Holding

The suit was not properly before the Court; parties had agreed to mediate first, and the Court could not entertain the claim absent a pending mediation or an appeal from a mediator

Reasoning

Clause 20 of the Sale Agreement required amicable negotiation then mediation, with court access limited to appeals from a mediator's determination or interim/conservatory relief pending mediation. No mediation was pending. Applying the literal rule of interpretation, the parties intended ADR first. The Court declined to re-write the contract and referred the parties to mediation.

p. 5
02

Whether the Applicant met the Giella v Cassman Brown principles for an injunction

Holding

The injunction application failed because the suit itself was not properly before the Court

Reasoning

Although the Applicant submitted it had a prima facie case citing Giella v Cassman Brown, Mrao and other authorities, the Court found the threshold question was jurisdiction over the suit. Having found the dispute resolution clause unexhausted, the Court dismissed the application entirely without granting any prayers.

p. 6

Legal principles established

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  • Courts must give effect to parties' agreed dispute resolution mechanisms and cannot re-write contracts for them
  • Where a contract provides for mediation before court proceedings, a suit filed without exhausting that mechanism is not properly before the court

Court orders

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  1. 1.The Notice of Motion Application dated August 23, 2022 is dismissed entirely
  2. 2.Parties are referred to Mediation as per Clause 20 of the Sale Agreement, to be commenced within 21 days from the date of the ruling
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court over disputes relating to land; suit instituted by Originating Summons

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, "Lesedi Developers Limited v Mwangi", Case Analysis (2023). Environment & Land Case E015 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/16715/eng@2023-03-29

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