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ELCDismissedELCLC CASE NO. E101 OF 2025· [2026] KEELC 4682 (KLR)

Tejaswini Builders Ltd v Soi Dairies Industries Ltd & 2 others (Environment and Land Case E101 of 2025) [2026] KEELC 4682 (KLR)

Environment and Land Court
23 July 2026
CYC. K. Yano
3,256 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court ruled that company directors cannot join a lawsuit over company land simply because they disagree with how the company is defending it.

What this practically means

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Executive summary

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The 1st and 2nd proposed interested parties, directors and shareholders of the defendant company Soi Dairy Industries Limited, moved the court by Notice of Motion dated 17th December 2025 seeking to be joined as interested parties and seeking restraining orders preventing the plaintiff and defendant from transferring possession of land parcel Kakamega/Soy/3008 pending the suit. The underlying dispute arises from a construction contract dated 21.03.2021 between the plaintiff and the defendant for a dairy plant, and an Acknowledgment of Indebtedness and Undertaking dated 27th June 2024 under which the plaintiff claims a right to take over the defendant's premises and the suit land for unpaid sums. The applicants argued that the undertaking was executed without board resolution and was not binding, that other directors were unwilling to defend the suit, and that their joinder was necessary for a fair and complete determination. The plaintiff opposed, maintaining the agreements were validly executed by two directors and binding. The defendant also opposed, contending the applicants, as directors, were already party to the suit. Applying Order 1 Rule 10(2) and the separate legal personality doctrine as stated in Omondi v National Bank of Kenya Ltd (citing Salomon v Salomon), the court held that the orders for joinder were not legally tenable, that the directors' divergent views were internal company affairs outside the court's jurisdiction, and that such views did not constitute a substantial and identifiable interest in the suit property. The application was dismissed with costs to the plaintiff only, given the applicants' directorship of the defendant.

Key legal issues

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01

Whether directors/shareholders of a defendant company can be joined as interested parties in a suit concerning company property

Holding

Joinder on that basis alone is not legally tenable

Reasoning

Relying on Order 1 Rule 10(2) and the separate legal personality principle from Salomon v Salomon as stated in Omondi v National Bank of Kenya Ltd, the court held that the company, not its directors, holds proprietary rights and capacity to litigate. The directors' internal disagreements are internal company affairs outside the court's ELC jurisdiction and do not constitute a substantial and identifiable interest in the suit land.

p. 16
02

Whether applicants met criteria for joinder as interested parties

Holding

Not determined - academic in light of finding on tenability

Reasoning

Having found the orders sought not legally tenable, the court declined to examine whether the applicants satisfied the substantive criteria for interested party joinder, holding that doing so would be an academic exercise.

p. 17
03

Merits of the application and costs

Holding

Application not merited; costs to plaintiff only

Reasoning

Following the dismissal, the court applied the general rule under section 27 of the Civil Procedure Act that costs follow the event, but in the particular circumstances, where the applicants are directors of the defendant company, confined the award of costs to the plaintiff/respondent.

p. 18

Legal principles established

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  • A company is a separate legal entity distinct from its directors and shareholders; only the company has capacity to enforce its legal rights and its directors have no proprietary rights to company property apart from their shares.
  • Divergent views among directors of a defendant company do not amount to a 'substantial and identifiable interest' in the suit property sufficient to ground joinder as an interested party.

Court orders

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  1. 1.The Notice of Motion dated 17th December, 2025 is dismissed with costs to the plaintiff/respondent.

Authorities

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Legislation

  • Civil Procedure RulesOrder 1 Rule 10(2)
  • Civil Procedure ActSection 27
  • Companies Act2015
  • Constitution of Kenyanot specified (as read with the ELC Act)

Cases cited (1)

  • Omondi v National Bank of Kenya Ltd
    [2001] eKLR
Jurisdiction invoked
Constitution of Kenya as read with 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, "Tejaswini Builders Ltd v Soi Dairies Industries Ltd & 2 others (Environment and Land Case E101 of 2025) [2026] KEELC 4682 (KLR)", Case Analysis (2026). ELCLC CASE NO. E101 OF 2025. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/4682/eng@2026-07-23

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