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ELCDismissedMilimani HCCOMMC/E002/2020 (Notice of Motion dated 10th December 2024)· [2025] KEELC 952 (KLR)

Kiu Construction Limited v Motion Pictures Limited (Environment & Land Case E204 of 2024) [2025] KEELC 952 (KLR)

Environment and Land Court
26 February 2025
JOJ. M. Onyango
2,093 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~8 min to read original · ~4 min brief

The bottom line

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The Environment and Land Court struck out a Kshs 31 million property refund claim, ruling it was a commercial dispute it had no power to hear.

What this practically means

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Executive summary

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The Plaintiff/Applicant filed a Notice of Motion dated 10th December 2024 under Sections 63E, 79G, 1A, 1B and 3A of the Civil Procedure Act and Order 42 Rule 6 of the Civil Procedure Rules seeking a stay of proceedings in Milimani HCCOMMC/E002/2020 (Francis Gichaba Gachagua), a liquidation petition pending before the High Court, pending determination of an intended suit. The applicant, through its company secretary Julia Kariuki, deponed that the Respondent's property L.R No. 76/407 was charged to Equity Bank Ltd; that the parties agreed the applicant would take over the loan of Kshs 48,000,000 and pay a further Kshs 23,000,000 for the property; and that the applicant serviced the loan to the tune of Kshs 31,381,109 between 2018 and 2023. It feared the ruling on the liquidation petition would be executed to defeat its interest. The Respondent did not file a response but opposed orally, arguing that leave under section 428 of the Insolvency Act was required before filing suit against a company in liquidation, that parallel applications risked conflicting rulings, that the claim was for a refund not land ownership, and that the court lacked jurisdiction. The court framed a single issue: whether it had jurisdiction to grant the orders sought. Relying on Halsbury's Laws, In Re Global Tours and Travels Ltd and Owners of the Motor Vessel 'Lillian S', the court held that the ELC cannot stay proceedings before the High Court, a court of equal status; that section 48 of the Insolvency Act's 'Court' means the High Court; and that the predominant claim was a purely commercial refund claim outside section 13 of the Environment and Land Court Act. The application was dismissed and the suit struck out with costs to the Defendant/Respondent.

Key legal issues

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01

Whether the Environment and Land Court has jurisdiction to stay proceedings in the High Court (insolvency petition)

Holding

The court lacks jurisdiction: it cannot stay matters in the province of the High Court, a court of equal status, and insolvency proceedings fall outside its land and environment mandate under section 13 of the ELC Act

Reasoning

The ELC's jurisdiction flows from Article 162(2)(b) of the Constitution and section 13 of the Environment and Land Court Act, which confines it to environment and land disputes. Section 48 of the Insolvency Act permits a stay only by 'the Court', which section 2 defines as the High Court. The pending matter is a liquidation petition before the High Court, over which the ELC has no supervisory or equal-status power to stay.

p. 5
02

Whether the applicant's predominant claim is a land matter within section 13 of the ELC Act

Holding

The predominant claim is for a refund of Kshs. 31,381,109, making it a purely commercial claim outside the court's jurisdiction

Reasoning

A close reading of the plaint showed the substantive relief was reimbursement of sums the applicant paid to service the defendant's loan to Equity Bank, not a dispute over title, tenure, occupation or interest in land. The parties' dispute, though arising from a sale agreement over L.R No. 76/407, was essentially commercial, and the court therefore could not entertain the suit or the stay application.

p. 5

Legal principles established

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  • The Environment and Land Court cannot stay proceedings before the High Court, a superior court of equal status, and its jurisdiction is limited to land and environment disputes
  • Stay of proceedings is a discretionary power to be exercised sparingly and only in exceptional cases

Court orders

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  1. 1.The application is dismissed
  2. 2.The suit is struck out with costs to the Defendant/Respondent

Authorities

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Legislation

  • Civil Procedure ActSections 63E, 79G, 1A, 1B and 3A
  • Civil Procedure RulesOrder 42 Rule 6(1)(a) and (2)
  • Insolvency ActSections 48, 2 and 428
  • Environment and Land Court ActSection 13
  • Constitution of KenyaArticles 162(2)(b), 42, 69 and 70

Cases cited (2)

  • Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd
    [1989] eKLR
  • In Re Global Tours and Travels Ltd: Winding Up Cause No.43 of 2000
Jurisdiction invoked
Article 162(2)(b) of the Constitution and 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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Cite this brief

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Cite this brief

Caselaw, "Kiu Construction Limited v Motion Pictures Limited (Environment & Land Case E204 of 2024) [2025] KEELC 952 (KLR)", Case Analysis (2025). Milimani HCCOMMC/E002/2020 (Notice of Motion dated 10th December 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/952/eng@2025-02-26

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