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ELCPartially Allowed· [2024] KEELC 410 (KLR)
Cytonn Investments Partners Four, LLP v Mutua & another (Environment & Land Case E061 of 2022) [2024] KEELC 410 (KLR)
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·~9 min to read original · ~4 min briefThe bottom line
#What this practically means
#Executive summary
#This Environment and Land Court decision at Machakos determined the Defendants' Notice of Motion dated 24th May 2023, brought under Section 234 of the Insolvency Act, Orders 2 and 51 of the Civil Procedure Rules and Sections 3A, 1A and 1B of the Civil Procedure Act. The Defendants sought a stay of proceedings and of the pending ruling, and in the main prayed that the suit be struck out for want of the Plaintiff's capacity, or alternatively stayed pending the outcome of the liquidation of the Cytonn entities directed by the High Court in Insolvency Petition No. E 063 of 2021 (Ruling of 6th January 2023). The Plaintiff, through Edwin H. Dande, opposed the striking-out, maintaining it was a separate legal entity from Cytonn High Yields Solutions LLP, but did not oppose a stay pending the insolvency outcome. The suit concerned two contracts dated 18th December 2015 with the Defendants over land parcels LR 13208/2, 28055 and 28056 Athi River, developed through the SPV Mystic Plains LLP, and sought conservatory and restraining orders over those properties. The court framed a single issue: whether it had jurisdiction. Relying on the impugned Ruling placing the 'Cytonns', including the Plaintiff, under liquidation and preserving the subject properties, and on Section 432(2) of the Insolvency Act and the Owners of the Motor Vessel 'Lillian S' definition of jurisdiction, the court held the Plaintiff lacked capacity to prosecute the suit and that, by dint of Section 13 of the Environment and Land Court Act, the court lacked jurisdiction. The application was found partially successful; prayers 3 and 5 were allowed and the suit was struck out. The court made no order as to costs.
Key legal issues
#01
Whether the court has jurisdiction to continue hearing the suit after the plaintiff company was placed under liquidation
Holding
The court held that the plaintiff, having been placed under liquidation, lacks capacity to prosecute the suit, and the ELC lacks jurisdiction; the suit was struck out.
Reasoning
The court relied on the Ruling of 6th January 2023 in Insolvency Petition No. E 063 of 2021 placing the 'Cytonns', including the plaintiff, under liquidation and preserving the subject properties. Under Section 432(2) of the Insolvency Act, proceedings against a company under liquidation require the court's approval. Applying Owners of the Motor Vessel 'Lillian S', the court found its authority limited by statute, including Section 13 of the Environment and Land Court Act, and concluded the plaintiff lacked capacity and the court lacked jurisdiction.
p. 4
Legal principles established
#- Where a company is under a liquidation order and a provisional/official liquidator is appointed, legal proceedings against the company can only be commenced or continued with the approval of the court (Section 432(2), Insolvency Act).
- Jurisdiction is the authority a court has to decide matters litigated before it, imposed by the statute under which the court is constituted; a decision made without jurisdiction amounts to nothing.
Court orders
#- 1.Prayer No. 3 of the Notice of Motion dated 24th May, 2023 allowed - the suit is struck out on the ground that the Plaintiff lacks capacity to prosecute it
- 2.Prayer No. 5 allowed - such further directions as necessary (the court proceeds to strike out the suit)
- 3.Prayers 2 and 4 of the application not granted as the suit is struck out instead
- 4.No order as to costs
- Jurisdiction invoked
- Section 13 of the Environment and Land Court Act; Section 432(2) of the Insolvency Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Cytonn Investments Partners Four, LLP v Mutua & another (Environment & Land Case E061 of 2022) [2024] KEELC 410 (KLR)", Case Analysis (2024). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/410/eng@2024-01-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.