Ocean Engineering Works Ltd & another v SBM Bank of Kenya Ltd (Civil Suit 112 of 2021) [2024] KEELC 4724 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Whether the preliminary objection met the threshold of a preliminary objection
The court affirmed that the objection was founded on the established Mukisa Biscuits threshold, being a point of law.
The court restated the classic definitions from Mukisa Biscuits Manufacturing Co. Ltd v West End Distributors Ltd and Attorney General & Another v Andrew Mwaura Githinji: a preliminary objection raises a pure point of law on the assumption that all facts pleaded by the other side are correct, and cannot be raised where facts must be ascertained or judicial discretion exercised. It found the objection was properly before it on the functus officio question.
Whether the court became functus officio upon withdrawal of the main suit notwithstanding the pending counter-claim
The court is not functus officio; the notice of withdrawal dated 2nd August 2023 was never admitted by the court, and in any event the counterclaim survives independently.
Relying on Telecom Kenya Ltd v John Ochanda, Raila Odinga v IEBC and Jersey Evening Post Ltd v A. Thani, the court explained the finality rationale of functus officio. It observed that the notice of withdrawal was expressly declined on multiple occasions, so the matter remained active. Even if the suit had been withdrawn, Order 7 Rule 13 preserves the counterclaim, which is an independent cross-suit that may proceed notwithstanding discontinuance of the main suit.
Whether leave is required before filing a counter-claim and whether the counter-claim is an abuse of process
No leave is required under the Civil Procedure Rules, and the counter-claim is neither defective nor an abuse of process.
The court held that Order 7 rule 8 permits a defendant to counterclaim against the plaintiff and other persons, and Order 7 rule 3 treats a counter-claim as a cross-suit; neither contemplates seeking leave. Citing County Government of Kilifi v Mombasa Cement Ltd, Sh. Jag Mohan Chawla and Beatrice Mumbi Wamahiu v Mobil Oil Kenya Ltd, it confirmed the counterclaim's independence. Allegations of malice and abuse involved factual questions unfit for a preliminary objection.
Whether there is an error of law not remediable by the orders of 12th October, 2023
There is no error of law; the main suit and the counter-claim are different suits in nature in the same claim, and the orders of 12th October 2023 corrected no error.
The court reasoned that because the plaintiff's suit and the defendant's counter-claim are distinct cross-actions capable of being disposed of in the same trial, the orders issued on 12th October 2023 were proper and did not purport to cure any legal defect. Consequently this limb of the preliminary objection also failed and the entire objection was dismissed.
Legal principles established
#- A counterclaim is an independent cross-suit whose survival is not pegged on the pendency of the main suit; where the plaintiff's suit is stayed, discontinued, dismissed or withdrawn, the counterclaim may nevertheless be proceeded with.
- A defendant does not require leave of the court to file a counter-claim under the Civil Procedure Rules.
- A preliminary objection must constitute a pure point of law argued on the assumption that all facts pleaded by the other side are correct.
Court orders
#- 1.The Notice of Preliminary objection dated 6th November, 2023 be and is found to lack merit and is hereby dismissed in its entirety
- 2.All the parties be and are hereby granted 14 days leave to fully comply with the provision of Order 11 of the Civil Procedure Rules, 2010
- 3.The matter be fixed for hearing on 8th October, 2024, with a mention on 23rd July, 2024 for purposes of conducting the Pre Trial Conference
- 4.There shall be no orders as to costs
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court; the court considered 'the relevant provisions of the Constitution of Kenya, 2010 and statures' and applied the Civil Procedure Act, Cap. 21 and the Civil Procedure Rules, 2010
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Wamakima t/a the Fedge Residency v Kimemia & 4 others (Environment and Planning Petition E043 of 2024) [2025] KEELC 3422 (KLR)[2025] KEELC 3422 (KLR)30 Apr 2025
- Gathua v Nyatogo & 2 others (Environment and Land Appeal E020 of 2023) [2025] KEELC 2856 (KLR)[2025] KEELC 2856 (KLR)19 Mar 2025
Cite this brief
#Cite this brief
Caselaw, "Ocean Engineering Works Ltd & another v SBM Bank of Kenya Ltd (Civil Suit 112 of 2021) [2024] KEELC 4724 (KLR)", Case Analysis (2024). Not stated in judgment (Notice of Preliminary Objection dated 6th November, 2023 in the main suit and Counter-Claim). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/4724/eng@2024-06-05
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.