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MagistrateDismissedNot stated in judgment· [2026] KEMC 178 (KLR)

Ndururu v Green Dairy (K) Ltd & 4 others (Civil Suit E068 of 2026) [2026] KEMC 178 (KLR)

Magistrates' Court
24 June 2026
1,802 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 ruled that defendants who file a defence without first asking for arbitration lose their right to avoid court proceedings.

What this practically means

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Executive summary

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The 1st to 5th Defendants raised a Notice of Preliminary Objection dated 3rd March 2026 against the Plaintiff's suit for refund of Kshs. 5,600,000/= paid under a Binding Agreement for Fractional Sub-Lease dated 24th May 2016 for two fractional shares in Cottage No. 8B in a Naivasha resort development. They argued the suit was incompetent because Clauses 15.1 and 15.2 of the Agreement, read with Section 6 of the Arbitration Act, required amicable settlement, mediation and arbitration before litigation, and sought striking out or dismissal with costs. The Plaintiff opposed, contending the Defendants waived the arbitration clause by filing a Statement of Defence without seeking a stay under Section 6, and that she had rescinded the agreement following the Defendants' prolonged breach. The court framed five issues and found that although the objection raised a proper point of law, the Defendants failed to invoke Section 6 as prescribed: they entered appearance and filed a defence without any stay application, which amounted to submission to the Court's jurisdiction and waiver of the right to insist on arbitration. Applying Mukisa Biscuit and Court of Appeal authorities including Corporate Insurance v Wachira, Niazsons, Adrec and Mlagui, the court dismissed the objection and held itself properly seized of jurisdiction. Invoking Article 159(2)(c), however, it directed the parties to Court-Annexed Mediation or other agreed ADR within forty-five days, with a mention on 12th August 2026 to confirm compliance, failing which the suit proceeds to full trial. Costs of the objection were awarded to the Plaintiff.

Key legal issues

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01

Whether the preliminary objection raises a proper point of law

Holding

Yes - a jurisdictional challenge founded on an arbitration clause is a pure point of law properly taken as a preliminary objection

Reasoning

Applying Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd, the court accepted that a preliminary objection must raise a pure point of law capable of disposing of the matter without evidence, and held that an objection grounded on an arbitration clause satisfies that test even though the objection ultimately failed on waiver grounds.

02

Whether the Defendants properly invoked Section 6 of the Arbitration Act

Holding

No - Section 6(1) imposes two mandatory requirements and the Defendants satisfied neither

Reasoning

Section 6(1) requires an application for stay of proceedings, made not later than the time of entering appearance or otherwise acknowledging the claim. The record showed the Defendants entered appearance and filed a Statement of Defence without any application for stay or referral to arbitration, so the statutory gateway was never properly engaged.

p. 3
03

Whether the Defendants waived their right to insist on arbitration

Holding

Yes - filing a Statement of Defence without seeking a stay constituted waiver and submission to the Court's jurisdiction

Reasoning

Following Court of Appeal authority, filing a defence is an acknowledgment of the claim and a step inconsistent with reliance on the arbitration clause. The Defendants' defence on the merits and their subsequent insistence on the arbitration clause were mutually inconsistent positions; having elected to invoke the Court's jurisdiction they could not later challenge it. The court held itself bound by those decisions.

p. 3
04

Whether the Court should nonetheless promote ADR under Article 159(2)(c)

Holding

Yes - although the Court cannot compel arbitration after waiver, it directed Court-Annexed Mediation or other consensual ADR within 45 days

Reasoning

Article 159(2)(c) obligates courts to promote alternative forms of dispute resolution. Having found the statutory right to arbitrate waived, the court nonetheless retained a constitutional mandate to encourage consensual mechanisms, and considered that this long-running commercial dispute over a failed development project would benefit from a less adversarial process before trial.

p. 4

Legal principles established

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  • A party wishing to rely on an arbitration agreement must apply for a stay of proceedings not later than the time of entering appearance or otherwise acknowledging the claim; filing a defence amounts to submission to the Court's jurisdiction

Court orders

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  1. 1.The Notice of Preliminary Objection dated 3rd March 2026 is hereby dismissed
  2. 2.The Court finds and holds that it is properly seized of jurisdiction to hear and determine the Plaintiff's claim
  3. 3.The parties are directed to participate in Court-Annexed Mediation or such other mutually agreed alternative dispute resolution mechanism within forty-five (45) days from the date of this ruling
  4. 4.The matter shall be mentioned on 12th August, 2026 for purposes of confirming compliance and receiving a report on the outcome of the Mediation or ADR process
  5. 5.Should the parties fail to resolve the dispute through mediation or any other agreed ADR mechanism, the suit shall thereafter proceed to hearing and determination on its merits before this Court
  6. 6.The costs of the Preliminary Objection are awarded to the Plaintiff
Jurisdiction invoked
Not expressly stated; Magistrates' Court seized of a contractual claim under the Fractional Sub-Lease Agreement

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, "Ndururu v Green Dairy (K) Ltd & 4 others (Civil Suit E068 of 2026) [2026] KEMC 178 (KLR)", Case Analysis (2026). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2026/178/eng@2026-06-24

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