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ELCStruck OutOriginating Summons dated 24th July 2023 (Commercial Court, Nairobi)· [2024] KEELC 3759 (KLR)

Alpking Holdings Limited v Adiungo Kenya Limited (Enviromental and Land Originating Summons E004 of 2023) [2024] KEELC 3759 (KLR)

Environment and Land Court / Commercial Court (Nairobi)
13 May 2024
EWE. K. Wabwoto
2,404 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

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A Nairobi court struck out Alpking's challenge to a property charge because an identical case was already pending, warning against filing duplicate suits in different courts.

What this practically means

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Executive summary

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Alpking Holding Limited filed an Originating Summons dated 24th July 2023 seeking a declaration that a charge registered on 18th August 2021 over Unit No. 8, LR No. 195/228 Karen Hills was unenforceable, on the ground that the Defendant, Adiungo Kenya Limited, was not licensed under Section 4 of the Banking Act to engage in mortgage business. The plaintiff further sought a permanent injunction restraining interference with the property, a mandatory injunction compelling discharge of the charge and return of title documents, and costs. The charge had secured a facility of USD 500,000 (of which USD 300,000 was drawn down) advanced to Cresta Investment Ltd, which defaulted in 2022, prompting the Defendant to issue statutory notices and attempt an auction. The Defendant, in a replying affidavit sworn by its director Stan Lee, contended it was a chargee and security agent for the lender Adiungo Capital BV, that it took no deposits and thus fell outside the Banking Act, that the charge complied with Sections 79(5) of the Land Act and 56(1) of the Land Registration Act, and that the suit was sub judice given HCCOMM E204 of 2023 pending before Justice Mabeya, in which stay orders had been issued. Framing two issues, the court found a nexus between the two suits, observed that parallel proceedings risked conflicting orders over the same property, and held that the plaintiff's filing amounted to forum shopping and an abuse of process. The court struck out the entire suit and ordered each party to bear its own costs. It made no findings on the validity of the charge or the licensing question.

Key legal issues

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01

Whether the suit was sub-judice in view of HCCOMM E204 of 2023

Holding

The suit was sub-judice; the earlier pending suit before Justice Mabeya covered the same subject property and similar issues

Reasoning

The court perused the pleadings in HCCOMM E204 of 2023 and found a nexus between the two suits, the earlier one having been filed first. It reasoned that parallel proceedings over the same property could result in conflicting orders, and that the plaintiff ought to await the outcome of the pending matter before moving this Court, rendering the instant suit an abuse of process.

p. 5
02

Whether the charge registered on 18th August 2021 was valid and whether the defendant required a Banking Act licence

Holding

Not determined; the suit was struck out on sub judice grounds before reaching the merits

Reasoning

Although the parties extensively argued the licensing question under Section 4 of the Banking Act and the validity of the charge under the Land Act and Land Registration Act, the court disposed of the suit on the preliminary sub judice issue and made no findings on the validity or enforceability of the charge.

p. 5

Legal principles established

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  • Where a suit is pending in another court between the same parties over the same subject matter, proceeding with a parallel suit risks conflicting orders and amounts to forum shopping and an abuse of court process

Court orders

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  1. 1.Struck out the entire originating summons
  2. 2.Each party shall bear own costs of the proceedings

Authorities

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Legislation

  • Banking ActSections 2, 3, 4(1)
  • Land Act No. 6 of 2012Sections 3, 79(5), 90(3)
  • Civil Procedure Act, Cap 21Sections 1A, 1B, 3A, 6
  • Civil Procedure Rules 2010Order 37 Rule 4
  • Land Registration ActSection 56(1)

Cases cited (2)

  • Mrao Ltd v First American Bank of Kenya Ltd & 2 others
    [2003] eKLR
  • George Lalla Oduor v Canon Assurance (K) Ltd
    Civil Appeal No 51 of 2017
Jurisdiction invoked
Sections 1A, 1B, 3A of the Civil Procedure Act, Cap 21 and Order 37 Rule 4 of the Civil Procedure Rules 2010

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, "Alpking Holdings Limited v Adiungo Kenya Limited (Enviromental and Land Originating Summons E004 of 2023) [2024] KEELC 3759 (KLR)", Case Analysis (2024). Originating Summons dated 24th July 2023 (Commercial Court, Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/3759/eng@2024-05-13

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