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ELCStruck OutKajiado ELC Appeal No. E128 of 2022 (Memorandum of Appeal dated 26th April 2023 from Kajiado CMELC Case No. E128 of 2022)· [2026] KEELC 203 (KLR)

Faulu Microfinance Bank Limited v Obonyo & another (Civil Appeal E013 of 2023) [2026] KEELC 203 (KLR)

Environment and Land Court
22 January 2026
MMM.D. Mwangi
1,770 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 struck out a bank's appeal because a loan dispute over land sold as security is a commercial matter, not a land dispute.

What this practically means

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Executive summary

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Faulu Microfinance Bank Limited appealed against a ruling of Hon. V. Kachuodho, Principal Magistrate at Kajiado, delivered on 11th April 2023 in Kajiado CMELC Case No. E128 of 2022, which granted a temporary injunction restraining the bank from exercising its statutory power of sale over Kajiado/Kitengela/12663 pending trial. The underlying suit was brought by the 1st Respondent, who had borrowed Kshs. 1,500,000 in 2019 secured by the Kajiado property; he alleged the bank unlawfully withheld the title deed to his Molo property (security for an earlier repaid loan), frustrating repayment and prompting a statutory sale notice. The bank raised seven grounds challenging the injunction, including the alleged rewriting of the contract, the 1st Respondent's admitted indebtedness, and the trial court's failure to give reasons. Before addressing the merits, M.D. Mwangi, J examined the threshold issue of jurisdiction. Applying Article 162(2)(b) of the Constitution and the Court of Appeal's decision in Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna, the court held that charging land is not 'land use', and that a dispute over loan repayment and statutory sale is a commercial dispute for the High Court or Magistrate's Court, not the Environment and Land Court. The court struck out the appeal with costs to the 1st Respondent, without determining the merits of the injunction. The 1st Respondent's trial-court injunction was not disturbed by this striking out.

Key legal issues

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01

Jurisdiction of the ELC over charge and debt-recovery disputes

Holding

The ELC lacks jurisdiction; the dispute is purely commercial and belongs to the High Court or Magistrate's Court exercising civil jurisdiction

Reasoning

The court applied Article 162(2)(b) and the Court of Appeal's decision in Co-operative Bank of Kenya v Patrick Kangethe Njuguna, which held that charging land does not amount to land use. The cause of action concerned the loan, tabulation of accounts and the statutory sale process, not the use, occupation of, or title to, the suit land. Section 13(2)(d) did not assist because the charge instrument itself was not in dispute.

p. 4
02

Consequence of lack of jurisdiction on the appeal

Holding

The appeal is struck out despite arguable merits raised in the seven grounds

Reasoning

Relying on Owners of the Motor Vessel M.V Lillian S v Caltex Oil, the court held it could not take any further step, including determining the merits of the injunction appeal, once jurisdiction was found to be lacking.

p. 4

Legal principles established

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  • Charging land does not constitute 'use' of land within the meaning of Article 162(2)(b) of the Constitution; disputes on enforcement of a charge and statutory power of sale are commercial disputes outside the ELC's jurisdiction
  • Jurisdiction is fundamental; a court without jurisdiction must down its tools

Court orders

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  1. 1.A declaration that the court lacks jurisdiction to hear and determine the appeal, as the subject matter concerns a commercial banking dispute and not the use, occupation, or title to land
  2. 2.The appeal is struck out with costs to the 1st Respondent against the Appellant

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 162(2)(b)
  • Civil Procedure ActSection 65(1)(b)
  • Civil Procedure RulesOrder 42 Rule 1
  • Environment and Land Court ActSection 13(2)(d)

Cases cited (3)

  • Giella vs. Cassman Brown & Co. Ltd
  • Owners of the Motor Vessel M.V Lillian S. v. Caltex Oil (K) Limited
    [1989] KLR 1
  • Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna & 5 others
    [2017] KECA 79 (KLR)
On appeal from
Principal Magistrate's Court, Kajiado (CMELC)
Kajiado CMELC Case No. E128 of 2022
Jurisdiction invoked
Article 162(2)(b) of the Constitution of Kenya, 2010; Section 13(2)(d) of the Environment and Land Court Act; appeal filed under Section 65(1)(b) of the Civil Procedure Act and Order 42 Rule 1 of the Civil Procedure Rules

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, "Faulu Microfinance Bank Limited v Obonyo & another (Civil Appeal E013 of 2023) [2026] KEELC 203 (KLR)", Case Analysis (2026). Kajiado ELC Appeal No. E128 of 2022 (Memorandum of Appeal dated 26th April 2023 from Kajiado CMELC Case No. E128 of 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/203/eng@2026-01-22

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