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ELCOtherNot stated in judgment (Eldoret ELC suit, Plaint dated 2nd October 2023)· [2024] KEELC 5233 (KLR)

Kisekem Limited v National Bank of Kenya Limited (Land Case E014 of 2023) [2024] KEELC 5233 (KLR)

Environment and Land Court
10 July 2024
JOJ. M. Onyango
4,248 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~17 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court dismissed a borrower's suit against a bank, ruling disputes about interest and statutory notices belong in the High Court, not the ELC.

What this practically means

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Executive summary

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The Defendant Bank raised a preliminary objection dated 17th October 2023 challenging the jurisdiction of the Environment and Land Court at Eldoret to determine the Plaintiff's Notice of Motion dated 2nd October 2023 (seeking temporary injunctive orders restraining the Bank from advertising or selling LR No. Eldoret Municipality/Block 6/231 in exercise of its statutory power of sale) and the entire suit, arguing that the dispute was commercial. The Plaintiff had sought injunctive relief, a declaration that the intended public auction was null and void for want of procedure, and a finding that the Bank's statutory power of sale had not arisen. The Plaintiff filed no submissions on the PO, but the court noted submissions are not evidence. The sole issue was whether the ELC had jurisdiction. Applying Mukisa Biscuits on the nature of a PO, the Lillian S doctrine on jurisdiction, and Samuel Kamau Macharia on the source of jurisdiction, the court applied the predominant purpose test from Suzanne Achieng Butler as modified by Munyao J in Lydia Nyambura Mbugua, and applied the Court of Appeal's binding holding in Co-operative Bank v Kangethe Njuguna that a charge is not a use of land and that mortgage/charge and accounting disputes fall within the High Court's jurisdiction. The court found the dominant issues were over-charging of interest contrary to the in duplum rule and failure to serve statutory notice before exercising the statutory power of sale - matters with nothing to do with the environment or the use, occupation or title to land. The PO succeeded entirely; the Plaint and Notice of Motion were dismissed with costs to the Defendant.

Key legal issues

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01

Whether the ELC has jurisdiction over a suit whose dominant issues are over-charging of interest and failure to issue statutory notice prior to exercise of statutory power of sale

Holding

The court lacks jurisdiction; the dispute is essentially a commercial lender-borrower dispute over accounts, not a dispute on the use and occupation of, or title to, land

Reasoning

Applying the predominant purpose/predominant issue test and the Court of Appeal's holding in Co-operative Bank v Njuguna that a charge is not a use of land and that disputes over amounts owing under a banker-lender relationship fall within the High Court's civil jurisdiction, the court found the charge instrument and creation of the interest undisputed; the complaints concerned interest amounts and absence of statutory notice, which do not touch on environment, use, occupation or title to land.

p. 7
02

What constitutes a valid preliminary objection

Holding

A preliminary objection must raise a pure point of law on assumed facts, an objection to jurisdiction being a classic example

Reasoning

Relying on Mukisa Biscuits Manufacturing Ltd v West End Distributors, the court reiterated that a PO consists of a point of law pleaded or arising by clear implication from the pleadings which, if successful, may dispose of the suit without ascertaining facts or exercising discretion. An objection to jurisdiction qualifies as such a point.

p. 3
03

Source and nature of jurisdiction

Holding

A court's jurisdiction flows from the Constitution or legislation and cannot be assumed or expanded

Reasoning

Citing Samuel Kamau Macharia v Kenya Commercial Bank, the court held that jurisdiction is conferred by the Constitution or statute; the ELC's jurisdiction is prescribed by Article 162(2)(b) and Section 13 of the ELC Act, and the court must operate within those limits and cannot arrogate to itself jurisdiction exceeding that conferred by law.

p. 4

Legal principles established

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  • Jurisdiction is everything; a court without jurisdiction must down its tools
  • Where the dominant issues in a suit concern a bank's statutory power of sale, over-charging of interest and failure to serve statutory notice, the dispute is commercial/accounting in nature and falls outside the ELC's jurisdiction

Court orders

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  1. 1.The Defendant's Preliminary Objection dated 17th October 2023 succeeds entirely
  2. 2.The Plaint dated 2nd October 2023 is dismissed for want of jurisdiction
  3. 3.The Notice of Motion dated 2nd October 2023 is dismissed
  4. 4.The Plaintiff shall bear the costs of the Application as well as the suit

Authorities

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Legislation

  • Constitution of KenyaArticle 162(2)(b), 162(3) and (4), 165(3), 260, Articles 42, 69 and 70
  • Environment and Land Court ActSection 13
  • Land ActSections 2, 80, 150

Cases cited (11)

  • Cooperative Bank of Kenya Limited vs Patrick Kangethe Njuguna and 5 Others
    (2017) eKLR
  • Owners of Motor Vessel "Lillian S" vs Caltex Oil (Kenya) Ltd
    (1989) KLR 1
  • Jeruto Tapkili & Another vs Agricultural Finance Corporation & 2 Others
    (2018) eKLR
  • Elias Muturi Njiru vs Nawiri Sacco Society & Another
    (2022) eKLR
  • Abraham Mwangi Wamigwi vs Simon Mbiriri Wanjiku & Another
    (2012) eKLR
  • Daniel Toroitich Arap Moi vs Mwangi Stephen Muriithi & Another
    (2014) eKLR
  • Mukisa Biscuits Manufacturing Ltd vs West End Distributors
    (1969) EA 696
  • Kakuta Maimai Hamisi vs Peris Pesi Tobiko & 2 Others
    (2013) eKLR
  • Samuel Kamau Macharia & Another vs Kenya Commercial Bank Limited & others
    (2012) eKLR
  • Suzanne Achieng Butler & 4 Others vs Redhill Heights Investments Limited & Another
    (2016) eKLR
  • Lydia Nyambura Mbugua vs Diamond Trust Bank Kenya Limited & Another
    [2018] eKLR
Jurisdiction invoked
Article 162(2)(b) of the Constitution; Section 13 of the Environment and Land Court Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (6)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Kisekem Limited v National Bank of Kenya Limited (Land Case E014 of 2023) [2024] KEELC 5233 (KLR)", Case Analysis (2024). Not stated in judgment (Eldoret ELC suit, Plaint dated 2nd October 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/5233/eng@2024-07-10

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