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ELCStruck OutELC Case of 2025 (application dated 27th October, 2025)· [2026] KEELC 4408 (KLR)

Sherali (Suing as Legal Representative of the Estate of Husein Sherali Jivraj alias Husein Sherali alias Huseinali Esmail Sherali Jivraj (Deceased)) v Kenya Deposit Insurance Corporation & 2 others (Environment and Land Case E120 of 2025) [2026] KEELC 4408 (KLR)

Environment and Land Court
24 April 2026
AOAntony O. Ombwayo
1,610 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 struck out a fraud challenge to a bank charge because claims about how a charge was created belong in the High Court, not the Land Court.

What this practically means

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Executive summary

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This ruling of the Environment and Land Court at Mombasa (Ombwayo J) dealt with the Plaintiff's Notice of Motion dated 27th October, 2025 seeking leave under Section 432(2) of the Insolvency Act to commence and maintain a suit against the 3rd Defendant, a bank under liquidation by the 4th Defendant (a receiver appointed by the Central Bank). The Plaintiff, administrator ad litem of the estate of Hussein Sherali Jivraj, alleged that the Defendants fraudulently charged the suit property, Mombasa Block I/409, on 25th September, 2009 as security for a Ksh 18,000,000 credit facility without the beneficiaries' consent, and sought a declaration that the charge was illegal and fraudulent, plus general and aggravated damages. The 1st and 2nd Defendants opposed, arguing lack of capacity, abuse of process under Section 56(2) of the Kenya Deposit Insurance Act, that suits against companies in liquidation require prior leave, and that the dominant issue concerned the charge, outside the court's jurisdiction. The court applied the dominant-issue test from Co-operative Bank of Kenya v Kangethe Njuguna as reiterated in Joel Kyatha Mbaluka, examined the plaint, and found the predominant issue was the fraudulent process by which the charge was acquired, a matter for the High Court. The court therefore struck out the application with costs and struck out the plaint with no orders as to costs.

Key legal issues

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01

Whether the ELC has jurisdiction over the Plaintiff's suit

Holding

The court lacked jurisdiction because the predominant issue is the fraudulent process by which the charge was registered, a matter within the High Court's purview

Reasoning

The court adopted the dominant-issue test from Co-operative Bank v Kangethe Njuguna as reiterated in Joel Kyatha Mbaluka. Examining the plaint, the gravamen was fraud and unlawfulness in the acquisition and registration of the charge securing a Ksh 18,000,000 credit facility, not the use, occupation of, or title to land. Jurisdiction over that question lies with the High Court, so the ELC could not entertain the suit or grant leave under the Insolvency Act.

p. 4

Legal principles established

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  • In determining whether the ELC has jurisdiction, the consideration must be the dominant issue in the dispute and whether it relates to the environment and the use, occupation of, and title to land

Court orders

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  1. 1.The Notice of Motion application dated 27th October, 2025 is struck out with costs
  2. 2.The Plaint dated 27th October, 2025 is struck out with no orders as to costs
Jurisdiction invoked
Article 162(2)(b) of the Constitution and the Environment and Land Court Act (jurisdiction of the ELC); leave sought under Section 432(2) of the Insolvency 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, "Sherali (Suing as Legal Representative of the Estate of Husein Sherali Jivraj alias Husein Sherali alias Huseinali Esmail Sherali Jivraj (Deceased)) v Kenya Deposit Insurance Corporation & 2 others (Environment and Land Case E120 of 2025) [2026] KEELC 4408 (KLR)", Case Analysis (2026). ELC Case of 2025 (application dated 27th October, 2025). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/4408/eng@2026-06-30

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