ARC Petroleum Limited v Libya Oil Kenya Limited, District Land Registrar, Galaxia Energy Limited & Homenet Limited
The bottom line
#A Kenyan court blocked the transfer of a beachfront property sold at auction for far below its value, until the full case is heard.
What this practically means
#Executive summary
#Key legal issues
#Jurisdiction of the ELC over a chargee's exercise of statutory power of sale
The Court has jurisdiction; the dispute concerns the lawfulness of the disposition of an interest in land, not merely enforcement of a commercial obligation
The 1st Defendant invoked the predominant purpose test, relying on Co-operative Bank v Njuguna and Bank of Africa v TSS Investment that charges fall outside the ELC's 'use of land' jurisdiction. The Court accepted the general test but held that the Plaintiff's challenge targets the statutory realization process, notices, auction, valuation and intended transfer/registration - matters directly concerning title and disposition of land under Sections 13 ELC Act, 101 Land Registration Act and 150 Land Act.
Joinder of Homenet Limited as Interested Party
Joinder allowed; Homenet demonstrated an arguable interest, likely prejudice if unheard, and a distinct relevant case
Applying Order 1 Rule 10(2) and the tripartite test distilled from Kingori v Chege, Civicon and Kipkulei, the Court found Homenet's claimed purchaser interest is directly affected by the suit, that determining the sale's validity without hearing it would breach audi alteram partem and Article 50(1), and that its case on the auction and Memorandum of Sale is distinct. Joinder does not prejudge the legality of its purchase.
Temporary injunction against completion of the sale/transfer
Granted as preservatory orders; Plaintiff established a prima facie case and risk of injury not adequately compensable in damages
The Plaintiff's categorical denial of service of statutory notices under Sections 90 and 96 of the Land Act, the absence of demonstrated advertisement, and the gross disparity between the auction price (Kshs 38,350,000) and the valuation (market Kshs 148,000,000; forced sale Kshs 111,000,000) raised a genuine controversy under Section 97. Completing registration before trial would alter the substratum of the suit; the lower-risk course is preservation.
Costs of the interlocutory applications
Costs of both applications to abide the outcome of the main suit
Both applicants achieved only interlocutory success; the substantive questions remain for trial. Under Section 27 of the Civil Procedure Act and Jasbir Singh Rai, costs follow the event, but since neither determination resolves the ultimate questions, it was just that costs await the outcome of the main suit.
Legal principles established
#- The ELC's jurisdiction over charge/chargee disputes is determined by the gravamen of the dispute, not the mere involvement of land as security; disputes on the exercise of statutory power of sale and disposition of land fall within Article 162(2)(b) jurisdiction
- An intended interested party need only demonstrate an arguable, legally recognizable interest capable of being affected by the decision, not a perfected or certain-to-prevail interest
- Absence of completed registration does not render an auction purchaser a stranger to a suit challenging the legality of the auction
- Offering property as security does not licence a chargee to dispense with mandatory statutory safeguards in realization
- Interlocutory injunction may issue to preserve the substratum of litigation where completion of a contested transaction would render the eventual judgment difficult to implement
Court orders
#- 1.The Court found it has jurisdiction to hear and determine the suit and the applications
- 2.The Plaintiff's Notice of Motion dated 5th February 2026 allowed to the extent that, pending hearing and determination of the main suit, the 1st Defendant, its servants, agents, employees and/or persons acting under its instructions are restrained from transferring, registering, charging, selling, alienating, disposing of or completing the disposition of Land Parcel Number Kwale/Galu/Kinondo/533
- 3.The preservatory orders shall not be construed as a final determination on the legality of the statutory power of sale, the validity of the alleged auction or the rights of Homenet Limited, which remain live for trial
- 4.Homenet Limited's Notice of Motion dated 9th April 2026 allowed
- 5.Homenet Limited joined as an Interested Party
- 6.Homenet Limited to file and serve its pleadings within 14 days; existing parties at liberty to respond within 14 days of service
- 7.Mention on 27th October 2026 for compliance and Pre-Trial Conference under Order 11; hearing on 22nd October 2027 before the ELC No. 1 at Kwale
- 8.Costs of both applications to abide the outcome of the main suit
- Jurisdiction invoked
- Article 162(2)(b) of the Constitution; Section 13 of the Environment and Land Court Act, No. 19 of 2011; Section 101 of the Land Registration Act, No. 3 of 2012; Section 150 of the Land Act, No. 6 of 2012
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "ARC Petroleum Limited v Libya Oil Kenya Limited, District Land Registrar, Galaxia Energy Limited & Homenet Limited", Case Analysis (2026). ELC Case No. E006 of 2026. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/5973/eng@2026-09-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.