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ELCPartially AllowedNot stated in the judgment· [2025] KEELC 4260 (KLR)

Muthinga & another (Suing as the Administrators and Legal Representatives of the Estate of the Late Wanjiru Muthinga - Deceased) v Pekay Enterprises Limited & 3 others (Environment & Land Case E011 of 2024) (Environment and Land) [2025] KEELC 4260 (KLR)

Environment and Land Court
5 June 2025
3,523 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~14 min to read original · ~4 min brief

The bottom line

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A Kenyan land court paused a property dispute because nobody could agree who legitimately controls the company at the centre of the case.

What this practically means

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Executive summary

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The 2nd Defendant, a limited liability company, applied by Notice of Motion dated 27th January 2025 for a stay of proceedings in the land suit concerning Title No. Longonot/Kijabe Block 6/780, pending determination of Nairobi High Court Judicial Review Case No. E267 of 2024 (Republic v The Registrar of Companies, Exparte George Muiru Kagunya & others), in which the company challenged an irregular change of its directors. Leave granted in the judicial review case operated as a stay of the changes to the register of directors and of the interested parties acting as directors. The Plaintiffs opposed, arguing the application was a delaying tactic; that the judicial review concerned internal governance while the suit concerned distinct land and property rights; that the company remained a legal entity capable of representation through acting directors; and that the claimed prejudice was speculative. The 3rd and 4th Defendants did not oppose and the 1st Defendant did not participate. Applying the stringent threshold for stay of proceedings (Kenya Wildlife Service v James Mutembei; Global Tours & Travels; Halsbury's Laws) and the Supreme Court's guidance in Githiga v Kiru Tea Factory, the court held that where there is a genuine dispute as to who constitutes the legitimate board, proceedings may be stayed until directorship is settled to prevent injustice or futile litigation. Since a company acts through its directors and land proprietorship was intertwined with control of the company, the court stayed the suit pending determination of the judicial review case, and allowed the application with costs to the applicant.

Key legal issues

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Whether proceedings in the land suit should be stayed pending determination of the 2nd Defendant's bona fide directors in pending judicial review proceedings

Holding

The court held that the proceedings should be stayed because the outcome of the judicial review case would determine who the directors of the company are, and hence who is properly before the court and entitled to act for it in the land dispute.

Reasoning

The court reasoned that stay of proceedings is a grave step with a high and stringent threshold, drawing on Kenya Wildlife Service v James Mutembei, Ringera J's principles in Global Tours & Travels, and Halsbury's Laws. However, applying the Supreme Court's guidance in Githiga v Kiru Tea Factory, it found that the question of who legitimately represents the company is fundamental: a company acts through its directors, and land proprietorship was intertwined with control of the company. Proceeding without resolved directorship risked futile litigation and prejudice, so the balance of justice favoured a stay.

p. 7

Legal principles established

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  • Stay of proceedings is a grave judicial action that interferes with a litigant's right to conduct litigation, and the test for granting it is high and stringent.
  • Where there is a genuine and serious dispute as to who constitutes the legitimate board of directors of a company, the court may stay proceedings until the issue of legitimate directorship is settled to prevent injustice or futile litigation.
  • A company is a legal entity which acts through its directors, and a dispute over the legitimacy of its directors raises a fundamental question as to the authority to instruct lawyers, file pleadings or defend the company.

Court orders

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  1. 1.Stay of proceedings in the instant suit pending a determination of the 2nd Defendant/Applicant's bona fide Directors in Nairobi High Court Judicial Review Case No. E267 of 2024: Republic v The Registrar of Companies, Exparte George Muiru Kagunya & others
  2. 2.The 2nd Defendant/Applicant's Application dated 27th January 2025 is allowed with costs
Jurisdiction invoked
Article 159(2) of the Constitution; Sections 1A, 1B, 3, 3A & 6 of the Civil Procedure Act; Order 51 Rule 1 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, "Muthinga & another (Suing as the Administrators and Legal Representatives of the Estate of the Late Wanjiru Muthinga - Deceased) v Pekay Enterprises Limited & 3 others (Environment & Land Case E011 of 2024)  (Environment and Land) [2025] KEELC 4260 (KLR)", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/4260/eng@2025-06-05

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