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ELCOtherNot stated in judgment· [2026] KEELC 1382 (KLR)

Gadano General Trading Company Limited v Kenya Railways Staff Retirement Benefits Scheme (Environment and Land Case E330 of 2025) [2026] KEELC 1382 (KLR)

Environment and Land Court
19 February 2026
JOJudy Omange
728 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court refused to award costs after an application was withdrawn early, holding that punishing withdrawal would discourage alternative dispute resolution.

What this practically means

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Executive summary

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The Plaintiff filed an application dated 9th July 2025 seeking injunctive and protective reliefs against the Defendant arising from a fifteen-year lease, commencing 12th January 2016 with a fifteen-year renewal option, over LR No 209/6828. The Plaintiff alleged that on 5th July 2025 the Defendant forcefully entered the demised premises threatening eviction to pave way for an affordable housing project, and sought protection of its contractual and possessory rights. The Defendant opposed via Grounds of Opposition, challenging the court's jurisdiction in view of a subsisting arbitration clause in the lease. Before the application could be heard on merit, the Plaintiff filed a Notice of Withdrawal dated 7th August 2025, and the Defendant sought costs of Kshs 14,272,966.56, arguing costs should follow the event. The court identified the sole issue as whether the Defendant was entitled to costs following withdrawal. Applying Section 27 of the Civil Procedure Act, the court reaffirmed that costs follow the event unless there is good reason to depart, citing Party of Independent Candidates of Kenya v Mutula Kilonzo, the Supreme Court's decision in Jasbir Singh Rai, and Republic v Rosemary Wairimu Munene. The court also held, citing Section 7 of the Arbitration Act, that an arbitration agreement does not bar interim protective relief. Because the application was withdrawn promptly before substantive hearing, no affidavits were canvassed, judicial time was not substantially expended, withdrawal allowed ADR a chance as enjoined by Article 159 of the Constitution, and arbitration would determine all issues including costs, the court declined to award any costs. Judgment delivered virtually at Kajiado on 19th February 2026 by Judy Omange, Judge.

Key legal issues

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01

Entitlement to costs after withdrawal of an application

Holding

Costs were not awarded despite the general rule that costs follow the event, because the withdrawal was prompt, judicial time was not substantially expended, and awarding high costs would discourage ADR.

Reasoning

Section 27 of the Civil Procedure Act gives the court discretion over costs, with the proviso that costs follow the event unless the court for good reason otherwise orders. The Supreme Court in Jasbir Singh Rai confirms the discretion to depart where circumstances demand. Here the plaintiff withdrew before substantive hearing, no affidavits were canvassed, ADR was encouraged under Article 159 of the Constitution, and the arbitration will determine all issues including costs.

p. 2

Legal principles established

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  • Costs follow the event unless the court for good reason orders otherwise, the court retaining discretion to depart from that rule
  • The existence of an arbitration agreement does not bar courts from granting interim protective relief

Court orders

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  1. 1.No costs awarded to the Defendant in respect of the withdrawn application
  2. 2.Application deemed withdrawn via Notice of Withdrawal dated 7th August 2025

Authorities

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Legislation

  • Civil Procedure ActSection 27(1)
  • Arbitration ActSection 7
  • Constitution of KenyaArticle 159

Cases cited (3)

  • Party of Independent Candidates of Kenya v Mutula Kilonzo & 2 others
    [2013] eKLR
  • Jasbir Singh Rai & 3 Others v Tarlochan Singh Rai & 4 Others
    [2014] eKLR
  • Republic v Rosemary Wairimu Munene Ex Parte Ihururu Dairy Farmers Co-operative Society Ltd
    [2014] eKLR
Jurisdiction invoked
Inherent jurisdiction on costs under Section 27 of the Civil Procedure Act; interim relief preserved by Section 7 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, "Gadano General Trading Company Limited v Kenya Railways Staff Retirement Benefits Scheme (Environment and Land Case E330 of 2025) [2026] KEELC 1382 (KLR)", Case Analysis (2026). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/1382/eng@2026-02-19

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