Zamzam v Gulf African Bank Limited (Cause E006 of 2022) [2022] KEELRC 1618 (KLR)
The bottom line
#Kenya's Employment Court cannot stop a bank from selling your property over a loan dispute; such cases belong in the Land Court.
What this practically means
#Executive summary
#Key legal issues
#Whether the ELRC has jurisdiction over disputes concerning a chargee's statutory power of sale
It does not; such matters fall within the Environment and Land Court's jurisdiction under Article 162(2)(b) and the Land Act and Land Registration Act.
The court distinguished the employment contract from the legal charge, holding they are separate contracts governed by distinct legal regimes: employment by the Employment Act, the charge and power of sale by the Land Act 2012 and Land Registration Act. Since the application sought to restrain sale of the charged property, it fell to the ELC. The court relied on Margaret Muthoni Njoroge v Housing Finance and Co-operative Bank v Patrick Kangethe Njuguna.
Whether the ELRC can determine computation of amounts payable under the charge or rewrite the loan terms
It cannot; accounting questions over amounts due under a charge fall outside both the ELRC and the ELC's statutory remit.
Following Co-operative Bank v Kangethe Njuguna, the court held that where the cause of action is not the charge instrument but the amount due thereunder, the ELC's exclusive jurisdiction under Article 162, Section 13 of the ELC Act and Section 150 of the Land Act does not cover accounting questions. The application raised both power-of-sale and computation issues, neither within the ELRC's competence.
Consequences of lack of jurisdiction
The application, being outside jurisdiction, was improperly before the court and incompetent, and was struck out.
Invoking the Supreme Court's decision in Samuel Kamau Macharia v KCB, the court held it could not arrogate to itself jurisdiction not conferred by the Constitution or written law. Lacking jurisdiction, it could not grant the injunctive relief sought; the proper course was to strike out the application rather than engage its merits.
Legal principles established
#- A court's jurisdiction flows from the Constitution or legislation and it cannot arrogate to itself jurisdiction exceeding that conferred by law
- The manner of exercise of a chargee's power of sale falls within the jurisdiction of the Environment and Land Court, not the ELRC
- Disputes concerning the amount owing under a charge (accounting questions) do not fall within the ELC's exclusive jurisdiction but that of the High Court
Court orders
#- 1.The Notice of Motion dated 13th April 2022 struck out with no orders as to costs
- Jurisdiction invoked
- Article 162(2) of the Constitution of Kenya 2010 (employment and labour relations jurisdiction)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Zamzam v Gulf African Bank Limited (Cause E006 of 2022) [2022] KEELRC 1618 (KLR)", Case Analysis (2022). Cause No E006 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1618/eng@2022-07-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.