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ELCOtherNot stated in judgment· [2026] KEELC 3148 (KLR)

Ngwawe v Faulu Microfinance Bank Limited (Environment and Land Appeal E004 of 2025) [2026] KEELC 3148 (KLR)

Environment and Land Court
6 May 2026
KBK. Bor
864 words in judgment
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The bottom line

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Kenya's Environment and Land Court ruled that disputes about bank loan sales and auctions belong to the High Court, not the ELC, and transferred this appeal there.

What this practically means

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Executive summary

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The Appellant had sued the Respondent before the magistrates' court seeking an account of the proceeds of the sale of Ndivisi/Muchi/3406 and Ndivisi/Muchi/3407, compensation for the loss occasioned by the auction of the two parcels, taking of accounts, and a declaration that the unilateral revision of the loan interest rate from 21% to 23% was punitive and void. The loan had been taken in 2015 and secured by the suit land, which the Respondent realised upon default. On 15 January 2025 the Learned Magistrate found the sale of Ndivisi/Muchi/3407 unlawful and awarded the Appellant Kshs. 3,000,000/= compensation. The Respondent appealed to the Environment and Land Court at Bungoma. During the hearing, the court suo motu raised the question of its jurisdiction, and parties filed supplementary submissions. The Appellant, relying on Article 162(2)(b) of the Constitution, Section 13 of the ELC Act, Sections 150 of the Land Act and 101 of the Land Registration Act, contended that the ELC's jurisdiction covered charges and the process of sale by charge, and alternatively sought transfer of the dispute to the High Court as a mixed grill claim. The Respondent, citing Cooperative Bank v Kang'ethe Njuguna and Kinuthia v Kanyi, argued that the dominant issue was the exercise of the statutory power of sale and the taking of accounts, matters outside ELC jurisdiction. K. Bor J agreed with the Respondent, holding that the dispute concerned the loan and the realisation of security, not the use, occupation of, or title to land. The court therefore transferred the appeal to the High Court for hearing and determination.

Key legal issues

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Whether the ELC has jurisdiction over an appeal arising from a claim for accounts of sale proceeds, compensation for an auction, and a challenge to a bank's revision of interest rates on a loan secured by a charge over land.

Holding

The ELC lacks jurisdiction; the dominant issue is the chargee's realisation of security and contractual accounts, not use, occupation of, or title to land.

Reasoning

The court traced the dispute to a loan secured by title deeds, whose security was realised on default. The relief sought - rendering accounts of sale proceeds, compensation for the auction, taking of accounts, and impugning the interest revision from 21% to 23% - relates to the loan contract and the statutory power of sale, not to the use, occupation of, or title to land, which Article 162(2)(b) and Section 13 of the ELC Act require for ELC jurisdiction.

p. 2

Legal principles established

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  • The ELC's jurisdiction does not extend to disputes whose dominant issue is a chargee's exercise of statutory power of sale, taking of accounts, or the terms of a loan contract; such disputes belong to the High Court.

Court orders

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  1. 1.The appeal is transferred to the High Court for hearing and determination.

Authorities

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Legislation

  • Constitution of KenyaArticle 162(2)(b)
  • Environment and Land Court ActSection 13
  • Land ActSection 150
  • Land Registration ActSection 101

Cases cited (2)

  • Cooperative Bank of Kenya Limited v Kang'ethe Njuguna & 5 others
    (2017) KECA 79 (KLR)
  • Kinuthia v Kanyi & another
    2024 KEELC 1625 (KLR)
On appeal from
Magistrates' Court
Jurisdiction invoked
Article 162(2)(b) of the Constitution and Section 13 of the Environment and Land Court 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, "Ngwawe v Faulu Microfinance Bank Limited (Environment and Land Appeal E004 of 2025) [2026] KEELC 3148 (KLR)", Case Analysis (2026). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3148/eng@2026-05-06

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