Amwayi v Karuigi & 2 others; Amwayi (Interested Party) (Environment and Land Case E048 of 2025) [2026] KEELC 1664 (KLR)

c. An order for the plaintifi to refund the 1st defendant the sum due and owing, amounting to Kshs. 2,299,077/= comprising the said Kshs. 1,441,587.06/= and Kshs.769,090/= above, d. An order for the plaintifi to remit to the 1st defendant the said monthly premiums of Kshs. 240,264.50/= in the account of the 1st defendant in the Cooperative Bank, Limuru branch, being account number 01192244178000 for onward transmission to the 2nd defendant with efiect from 5/11/2025. e. If the plaintifi is unable to refund and remit his share of the monthly loan premiums for the money he received from the 1st defendant amounting to Kshs.6,600,000/=, plus interest of Kshs.2,049,522.52/=, the 1st defendant prays that he be allowed to solely liquidate the entire loan plus interest within the loan term of thirty-six (36) months. f. The 1st defendant prays that this court order that instead of transferring the entire parcel of the subject property back to the plaintifi after repaying the whole loan, the 1st defendant be allowed to retain a portion of the same equivalent to the sum of Kshs.10,948,599.52/= plus any other costs and/or interest, as per the variation that may have been made by the bank due and owing to the 1st defendant from the plaintifi, tabulated as: Kshs.2,299,077/=, Kshs.8,649,522.52/= (loan principle of Kshs.6,600,000/= plus interest of Kshs.2,049,522.52/=). 3. Through a reply to the defence and counterclaim dated 5/1/2026, the plaintifi denies all the contents therein. He specifically denies being party to the transaction and the loan agreement between the 1st and the 2nd defendants and states that he is not bound by the terms therein. 4. The plaintifi further states that the 1st defendant's claim for valuation fees, legal fees, transport costs, and property transfer costs is misinformed, since he was never a party to the transaction that gave rise to the alleged costs. The plaintifi states that the 1st defendant's demand for Kshs.10,000,000/= as compensation is malicious and misconceived, as the 1st defendant intends to avoid his obligations and liability under the loan agreement with the 2nd defendant. 5. In written submissions dated 3/2/2026, the applicant submits that this court lacks jurisdiction to hear and or determine the 1st defendant's counterclaim, as the issues raised therein are purely commercial and contractual in nature, arising from a charge instrument or an alleged commercial agreement and or a loan facility, and are therefore improperly before the court. 6. The applicant further submits that this court is a specialized court established pursuant to Article 162(2)(b) of the Constitution, as read together with Section 13 of the Environment and Land Court Act, to hear and determine disputes relating to the environment and the use, occupation, and title to land. 7. The applicant submits that the 1st defendant's counterclaim seeks to determine whether there exists a valid and enforceable commercial contract between the plaintifi and the 1st defendant; whether the plaintifi was privy to, or a party to, the charge instrument executed between the 1st and 2nd defendants; whether the plaintifi received any monies from the 1st defendant as alleged, and if so, the nature and quantum of such funds; whether the plaintifi can be compelled to refund any monies to the 1st defendant, if at all, together with interest allegedly accruing pursuant to the terms of a charge instrument to which the plaintifi is not a party. 8. Reliance is placed on Bank of Africa Kenya Limited & another v TSS Investment Limited & 2 others [2024] KECA 410 (KLR), that disputes arising from loan facilities and charge instruments are commercial disputes that fall within the jurisdiction of the High Court and not this court. It is https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/1664/eng@2026-03-24 2

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submitted that, therefore, a court without jurisdiction must down its tools, as held in Owners of the Motor Vessel ''Lillian S'' v Caltex Oil (Kenya) Ltd [1989] eKLR. 9. The 1st respondent relies on written submissions dated 6/2/2026. He submits that the preliminary objection is an abuse of the court process to delay the hearing and determination of this suit. The 1st defendant submits that a counterclaim is a suit within a suit, in which a defendant claims against a plaintifi, to avoid the costs and delays of multiple suits by resolving all disputes between the parties at the same time, since it arises from the same set of facts, events, or transactions that form the basis of the plaintifi’s original suit. 10. The 1st respondent submits that the counterclaim does not raise issues which are independent of the plaintifi's suit and is properly before this court as per Order 7 Rule 7 of the Civil Procedure Rules. The 1st defendant submits that if this court lacks the jurisdiction to hear and determine the counterclaim, it lacks the jurisdiction to hear and determine the plaintifi's suit, and the interim orders the plaintifi is enjoying are illegal and should be discharged. 11. Further, the 1st respondent submits that this court has the power to hear and determine disputes relating to public, private, and community land and contracts, choses in action, or other instruments granting any enforceable interests in land. The sole issue for determination is whether the preliminary objection is merited. A court bereft of jurisdiction must lay down its tools and cannot take any further steps. See Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd (supra). 12. Following Article 162(2)(3) of the Constitution, the Environment and Land Court Act, No. 19 of 2011, establishing the Environment and Land Court was enacted. The court has exclusive original and appellate jurisdiction to determine all matters referred to it relating to the environment and land. Section 13 of the said Act sets out the jurisdiction of the court, which includes the power to determine any disputes “ relating to public, private, and community land and contracts, choses in action or other instruments granting any enforceable interests in land. 13. The counterclaim is mainly based on the loan amount, payment of the premiums, and default of the loan agreement. It also focuses on money lent, due, and owing, to whom and by whom. 14. In Mbuki v Waweru & 3 others (Environment & Land Case E030 of 2025) [2025] KEELC 2932 (KLR) (25 March 2025) (Ruling), the court held that Section 13 of the Environment and Land Court Act exclusively defines the Environment and Land Court’s jurisdiction. In Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna & 5 others [2017] KECA 79 (KLR), the Court of Appeal determined that the Environment and Land Court is not vested with the jurisdiction to entertain disputes relating to charges, mortgages, or the statutory power of sale. See also Bank of Africa Kenya Limited & Another v TSS Investment Limited (supra). 15. From the foregoing, it is evident that the predominant issue in the counterclaim is the enforcement of the charge. It therefore falls under the Commercial Division of the High Court and not this court. Therefore, the preliminary objection is upheld; this court lacks the jurisdiction to hear and determine the 1st defendants counterclaim. It being an independent suit, it is struck out with costs. 16. Orders accordingly. RULING DATED, SIGNED, AND DELIVERED VIA MICROSOFT TEAMS/OPEN COURT AT KITALE, THIS 24TH DAY OF MARCH 2026. In the presence of:Court Assistant - Dennis https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/1664/eng@2026-03-24 3

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Obayi for the plaintifi present Nabwile for the 2nd defendant present Chilaka for the 3rd defendant absent Wanjiku Mwaura for the 1st defendant absent HON. C.K. NZILI JUDGE, ELC KITALE https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/1664/eng@2026-03-24 4

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