Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
ELCStruck OutOriginating Summons dated 26th July 2024· [2025] KEELC 3365 (KLR)

Equity Bank (Kenya) Limited v Souring & Construction Industries Company Limited (Enviromental and Land Originating Summons E013 of 2024) [2025] KEELC 3365 (KLR)

Environment and Land Court
24 April 2025
EME. K. Makori
1,687 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~7 min to read original · ~4 min brief

The bottom line

#

The Environment and Land Court struck out Equity Bank's bid to sell charged land below forced sale value, ruling that such mortgage disputes belong in the High Court's Commercial Division.

What this practically means

#

Executive summary

#
Equity Bank (Kenya) Limited brought an Originating Summons under Sections 90, 96, 97, 98, 104(1) and 150 of the Land Act and Order 37 Rule 4 of the Civil Procedure Rules seeking leave to sell charged land, Volume LT 36 Folio 140 File 4583 Portion Number 2334 Malindi, at the best obtainable price but not necessarily above forced sale value, after three failed auctions. The Respondent had charged the property to secure loans of KES 6,000,000 and KES 6,600,000, defaulted in 2019, and received statutory notices under Sections 90 and 96 of the Land Act. Auctions on 22nd August 2020, 9th February 2022 and 21st February 2024 all failed for lack of adequate bids, with the highest offer of KES 8,000,000 falling below the forced sale value of KES 8,250,000. The Respondent did not file a response despite appointing counsel. The Applicant cited NCBA Bank v Angran and Equity Bank v Maina where similar orders were granted, but did not address jurisdiction. The court, however, raised the jurisdictional question on its own motion and, applying the Motor Vessel 'Lillian S' test and Thomas Mutuku Kasue v Housing Finance Company Ltd as approved in Keter v Ecobank, held that where the predominant issue involves legal charges and the statutory power of sale, the High Court and not the Environment and Land Court has jurisdiction. The court therefore struck out the suit and directed the Applicant to approach the appropriate forum, with no order as to costs given the undefended status of the matter.

Key legal issues

#
01

Whether the Environment and Land Court has jurisdiction over an Originating Summons seeking leave to sell charged land below forced sale value

Holding

The court lacked jurisdiction because the substratum of the suit is a commercial dispute arising from a legal charge and the statutory power of sale, which belongs to the High Court Commercial Division

Reasoning

The court characterised the dispute as one arising from legal charges over land securing loan facilities, with the predominant issue being the exercise of the chargee's statutory power of sale. Relying on the Motor Vessel 'Lillian S' jurisdictional test and Thomas Mutuku Kasue v Housing Finance Company Ltd as quoted in Keter v Ecobank, the court held that where mortgages and charges predominate, the High Court, not the ELC, has jurisdiction. Being bereft of jurisdiction, it declined to consider the merits and struck out the suit.

p. 4

Legal principles established

#
  • Where the predominant issue in a suit involves mortgages, charges, collection of dues and rents, it is the High Court and not the Environment and Land Court that has jurisdiction
  • A court without jurisdiction must down tools and cannot proceed to consider the merits

Court orders

#
  1. 1.The current suit is struck out
  2. 2.There will be no order as to costs

Authorities

#

Legislation

  • Land Act No. 6 of 2012Sections 90(1)(2)(3)(e), 96, 97, 98, 104(1), 150
  • Civil Procedure RulesOrder 37 Rule 4
  • Civil Procedure ActSections 1A, 1B, 3A
  • Auctioneers Rules, 1997Rules 15, 16, 17, 18

Cases cited (5)

  • NCBA Bank Kenya PLC v Angran Limited
    [2021] KEHC 314 (KLR)
  • Equity Bank (Kenya) Limited v Maina
    [2024] KEELC 6786 (KLR)
  • Thomas Mutuku Kasue v Housing Finance Company Ltd (HFC) & Another
    [2021] eKLR
  • Keter v Ecobank Kenya Limited (Civil Case 16 of 2018)
    [2022] KEHC 13352 (KLR)
  • Owners of The Motor Vessel “Lillian S v Caltex Oil (Kenya) Ltd
    [1989] KECA 48 (KLR)
Jurisdiction invoked
Jurisdiction of the Environment and Land Court under the Land Act No. 6 of 2012 vis-a-vis the High Court's jurisdiction over commercial disputes; the court applied the Motor Vessel 'Lillian S' test and held it lacked jurisdiction

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Equity Bank (Kenya) Limited v Souring & Construction Industries Company Limited (Enviromental and Land Originating Summons E013 of 2024) [2025] KEELC 3365 (KLR)", Case Analysis (2025). Originating Summons dated 26th July 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/3365/eng@2025-04-24

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