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ELCDismissedOriginating Summons dated 29th April, 2024· [2025] KEELC 6381 (KLR)

Gakibe v M. Dalmar Trading Company Limited (Arbitration Cause E034 of 2024) [2025] KEELC 6381 (KLR)

Environment and Land Court
20 February 2025
916 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Environment and Land Court confirmed it can hear arbitration challenges where the dispute turns on a lease, rejecting arguments that only the High Court can.

What this practically means

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Executive summary

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This is a ruling on a preliminary objection to the court's jurisdiction in an originating summons dated 29th April 2024, in which the applicant sought a stay of arbitral proceedings and setting aside of an interim award rendered on 9th April 2024 concerning an agreement for lease dated 6th June 2016 over LR No 36/V11/435. The respondent, represented by Learned Counsel Kyalo SC, objected that the Environment and Land Court lacked jurisdiction, contending the dispute - predominantly for damages for breach of agreement - belonged in the Commercial Division of the High Court, relying on the predominant purpose test in Suzanne Achieng Butler v Redhill Heights Investment Ltd. The respondent further argued the application was incompetent because jurisdiction should have been raised no later than filing the defence, and that pursuing the application after other avenues amounted to abuse of process. The applicant maintained the dispute arose from a lease agreement central to the arbitration, within the ELC's mandate. Applying Owners of the Motor Vessel 'Lillian S' and section 13(2) of the Environment and Land Court Act, the court held that although the statement of claim was predominantly for damages, the lease terms would have to be interpreted, bringing the dispute within the court's jurisdiction over contracts granting enforceable interests in land. Section 17(6) of the Arbitration Act's reference to the High Court was read together with Articles 162(2)(b) and 165(5)(b) of the Constitution. The preliminary objection was dismissed with costs to abide the outcome of the originating summons, the competency issues being premature.

Key legal issues

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01

Jurisdiction of the ELC over challenges arising from arbitration on a lease agreement

Holding

The ELC has jurisdiction because the dispute centres on the terms of a lease, an enforceable interest in land under s.13(2)(d) of the ELC Act

Reasoning

The statement of claim in the arbitration was predominantly for damages for breach of the lease, but damages cannot be determined without interpreting the lease terms. The court therefore finds the lease central to the dispute, bringing it within s.13(2)(d) ELC Act, and reads s.17(6) Arbitration Act conformably with Article 162(2)(b).

p. 2
02

Predominant purpose argument raised by the Respondent

Holding

Rejected - although the claim was predominantly for damages, the lease terms remain central and the ELC is the proper court

Reasoning

Counsel for the Respondent relied on the predominant purpose test to place the matter in the Commercial Division. The court held that damages cannot be assessed in a vacuum without interpreting the lease, so the land dispute is at the centre and the ELC's mandate under the Land Registration Act and Land Act applies.

p. 2

Legal principles established

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  • References to the High Court in pre-2010 legislation, including section 17(6) of the Arbitration Act, must be read together with Articles 162(2)(b) and 165(5)(b) of the Constitution so that disputes over enforceable interests in land, including lease agreements, fall to the Environment and Land Court

Court orders

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  1. 1.Preliminary Objection dismissed with costs to abide the outcome of the Originating Summons

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 162(2)(b); Article 165(5)(b)
  • Environment and Land Court Act, 2011Section 13(2)
  • Arbitration ActSection 17(6)
  • Land Registration Act No 3 of 2012null
  • Land Actnull

Cases cited (2)

  • Suzanne Achieng Butler & 4 others versus Redhill Heights Investment Ltd and another
    (2016) eKLR
  • Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd.
    (1989)
Jurisdiction invoked
Article 162(2)(b) of the Constitution read with Section 13(2) of the Environment and Land Court Act, 2011; Section 17(6) of the Arbitration 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, "Gakibe v M. Dalmar Trading Company Limited (Arbitration Cause E034 of 2024) [2025] KEELC 6381 (KLR)", Case Analysis (2025). Originating Summons dated 29th April, 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/6381/eng@2025-02-20

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