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ELCDismissedEnvironment & Land Case E180 of 2023· [2023] KEELC 19250 (KLR)

Eagle Tower Limited v Shah & 5 others; Igueta (Interested Party)

Environment and Land Court of Kenya
10 August 2023
8,107 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~32 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court struck out a property dispute filed six years too late, ruling that contract claims must be filed within six years and arbitration clauses must be honoured first.

What this practically means

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Executive summary

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This ruling by the Environment and Land Court at Nairobi (Mboya, J) disposed of three applications in a dispute over the basement parking area of premises on L.R No. 209/20601. Eagle Tower Limited, the management company incorporated by apartment owners, sought interim orders compelling the 2nd, 3rd and 6th defendants to vacate the basement or deposit rents, and an injunction restraining interference with the basement, alleging the defendants had converted the designated parking area to commercial use contrary to the sale agreements and leases. The defendants applied to strike out the suit as scandalous, frivolous, vexatious and an abuse of process, arguing limitation, exhaustion of the arbitral clause, and the validity of the change-of-user approval. A proposed interested party, an apartment owner, sought joinder. The court framed four issues and resolved all against the plaintiff. First, the contract claim, founded on complaints arising in October 2015 and March 2017, was filed in May 2023 and was statute barred under Section 4(1) of the Limitation of Actions Act. Second, Clause 29 of the sale agreements required disputes to go to a single arbitrator; the plaintiff had not challenged that clause, so the suit violated the doctrine of exhaustion, consistent with Article 159(2)(c). Third, the court lacked jurisdiction to impugn the development approval for change of user, since challenges lay by appeal to the County Liaison Committee under the Physical Planning Act. Fourth, the interested party's supporting affidavit, sworn in Illinois, USA, was not verified as required by Section 88 of the Evidence Act and was struck out, leaving her application bare. The suit was struck out in its entirety, the defendants' application allowed, and costs awarded to the defendants.

Key legal issues

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01

Limitation of actions in contract

Holding

The suit, premised on breach of contract with complaints arising October 2015 and 20th March 2017, was filed 14th May 2023 and is statute barred under Section 4(1) of the Limitation of Actions Act

Reasoning

The plaint itself pleaded that the change of user of the basement occurred in October 2015 and the sub-lease was registered on 20th March 2017, both within the plaintiff's knowledge. A contract claim must be filed within six years of accrual, i.e. by October 2021 and 19th March 2023 respectively. The suit filed in May 2023 was therefore out of time and a nullity ab initio.

p. 9
02

Doctrine of exhaustion / arbitration clause

Holding

The suit contravened the doctrine of exhaustion because Clause 29 of the sale agreements required disputes to be referred to a single arbitrator, and the plaintiff did not challenge that clause

Reasoning

Clause 29 of the sale agreements required all disputes to be referred to a single arbitrator of not less than 20 years standing, whose decision would be final and binding. Counsel for the plaintiff did not dispute the clause nor contend it was a nullity or contrary to public policy. Article 159(2)(c) obliges courts to promote arbitration; the plaintiff could not make the court the port of first call.

p. 12
03

Jurisdiction over challenge to development approval for change of user

Holding

The court lacks jurisdiction to impugn the development approval; the aggrieved party was obliged to appeal to the County Liaison Committee under the Physical Planning Act

Reasoning

The relief sought - a declaration that the basement is a designated parking area - would in substance invalidate the approval granted by the planning authority on 25th November 2015. Under the Physical Planning Act (now repealed) and its successor, challenges lie by appeal to the County Liaison Committee, with the Environment and Land Court hearing appeals from that committee. Absent such an appeal, the court is divested of jurisdiction.

p. 14
04

Joinder of the proposed interested party

Holding

The application for joinder failed because the supporting affidavit sworn in Illinois, USA was not verified as required by Section 88 of the Evidence Act and was struck out, leaving the motion bare

Reasoning

The USA is not part of the Commonwealth, so affidavits sworn there must be proved by affidavit or otherwise to have been taken by a Notary Public. The Notary Public neither verified nor proved execution of the affidavit. Once the supporting affidavit was struck out, the amended Notice of Motion was left without evidential anchor and was incompetent.

Legal principles established

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  • An action founded on contract must be brought within six years from accrual of the cause of action and no court may extend that period
  • Parties who agree to arbitration are bound by the arbitral clause and must exhaust that mechanism before approaching the court
  • Challenges to a planning authority's change of user approval lie by appeal to the County Liaison Committee, not by fresh suit in the Environment and Land Court
  • A court without jurisdiction must down its tools; proceedings conducted without jurisdiction are a nullity ab initio
  • Affidavits sworn outside the Commonwealth must be proved by affidavit or otherwise to have been taken by a Notary Public

Court orders

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  1. 1.The application dated the 14th May 2023 is misconceived, bad in law and legally untenable
  2. 2.The amended Notice of Motion dated the 27th June 2023 is premature and incompetent and is struck out
  3. 3.The Application dated the 13th June 2023 is meritorious and is allowed
  4. 4.The entire suit is struck out for being incompetent and in any event statute barred
  5. 5.Costs of the suit and the three Applications awarded to the Defendants/Respondents, to be agreed upon and in default taxed by the Taxing Officer

Authorities

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Legislation

  • Limitation of Actions ActSection 4(1)
  • The Constitution of Kenya, 2010Article 159(2)
  • Physical Planning Act
  • Physical and Land Use Planning Act, 2019
  • Evidence ActSection 88
  • Sectional Properties Act, 2020
  • Arbitration Act

Cases cited (7)

  • Gathoni versus Kenya Co-operative Creameries Ltd
    [1982] eKLR

    Limitation law protects defendants against unreasonable delay; intending plaintiffs must exercise reasonable diligence

  • Pius Kimaiyo Langat versus Co-operative Bank of Kenya Limited
    [2017] eKLR

    The period of limitation cannot be extended; Part III of the Limitation of Actions Act does not apply to contract actions

  • Divecon vs Samani
    (1995-1998) EA 48

    Section 4(1) means no action founded on contract may be brought six years after accrual; no discretion to extend

  • Deposit Protection Fund Board in Liquidation of Euro Bank Limited (In Liquidation) vs Rosaline Njeri Macharia & Another
    [2016] eKLR

    Suit founded on contract filed outside six years from accrual is time barred

  • Geoffrey Muthinja & another versus Samuel Muguna Henry & 1756 others
    [2015] eKLR

    Exhaustion doctrine applies even where the authority of the dispute-resolution organs is challenged; courts may be approached after exhaustion

  • Phoenix of E.A. Assurance Company Limited versus S. M. Thiga t/a Newspaper Service
    [2019] eKLR

    Jurisdiction is everything; proceedings without jurisdiction are a nullity ab initio and set aside ex debito justitiae

  • Peeraj Genral Trading & Contracting company Ltd & Another versus Mumias Sugar Company Ltd
    (2016) eKLR

    Affidavits taken outside the Commonwealth must be proved by affidavit or otherwise to have been taken by a Notary Public

Jurisdiction invoked
Article 162(2)(b) of the Constitution (Environment and Land Court); Article 159(2)(c) on alternative dispute resolution

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, "Eagle Tower Limited v Shah & 5 others; Igueta (Interested Party)", Case Analysis (2023). Environment & Land Case E180 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/19250/eng@2023-08-10

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