ARC Petroleum Limited v Libya Oil Kenya Limited, District Land Registrar, Galaxia Energy Limited & Homenet Limited

or otherwise dealing with land parcel known as Kwale/Galu/Kinondo/533 (Hereinafter referred to as the “The Suit Land”) pending the hearing and determination of the suit. 3. The application is supported by the affidavit of Mohamed Abukar sworn on 5th February, 2026 and a Further Affidavit sworn on 25th May, 2026. 4. The application is opposed by the 1st Defendant through the Replying Affidavit of Mwel Sharon Chepkorir sworn on 6th May 2026. 5. The second is the Notice of Motion application dated 9 th April, 2026, by the Intended Interested Party - Homenet Limited who sought to be joined to these proceedings as an Interested Party. The Plaintiff opposed the application for joinder through a Replying Affidavit sworn by Bashir Mohamed Abukar. 6. The applications arise from a dispute concerning the exercise of the 1st Defendant’s statutory power of sale over the suit property. The parties are substantially agreed that the Plaintiff is the registered proprietor of the suit land, which was offered as security in connection with financial and petroleum ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 2 of 103

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trading obligations involving the 1st Defendant and the 1st Interested Party. The principal controversy is whether the statutory power of sale was lawfully exercised, whether the requisite statutory and auction notices were properly served, whether the auction of 14th October, 2024 was lawfully conducted, and what consequences follow from the asserted sale to Homenet Limited. 7. According to the Plaintiff, it was unaware, when it instituted the suit, that the 1st Defendant had purportedly exercised its statutory power of sale. It states that unknown persons entered the property in or about January, 2026, threatened its employees and agents and attempted to assert control over the service station. The Plaintiff contends that it only became aware of the alleged auction upon being served with the 1 st Defendant’s Replying Affidavit. 8. The 1st Defendant, on the other hand, maintains that the suit property was charged to it, that the underlying obligations were not fully repaid, that the statutory notices were duly issued and served, and that the property was subsequently sold at a public auction to Homenet Limited. The Intended ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 3 of 103

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Interested Party similarly asserts that it participated in the auction, was declared the successful bidder, paid the purchase price, and has an existing and substantial interest in the outcome of these proceedings. The 1st Defendant’s affidavit identifies a certificate of sale and memorandum of sale in favour of Homenet Limited and states that completion of registration was interrupted by the institution of these proceedings. II. The Plaintiff’s Notice Of Motion Application Dated 5th February 2026 9. The Plaintiff sought for the following orders: a) Spent. b) That pending the inter partes hearing and determination of this Application, a temporary injunction do issue restraining the Defendants, whether by themselves, their servants, agents, employees, or unknown persons acting on their behalf, under their authority or with their acquiescence, from trespassing upon, entering, occupying, interfering with, damaging, alienating, developing, removing beacons or boundary marks from, constructing upon, or in any other manner dealing with all that parcel of land known as ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 4 of 103

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KWALE/GALU/KINONDO/533, situated in Kwale County ("the suit property"). AND THAT the Officer Commanding Station or the in-charge police officer, Diani Police Station, do take all necessary steps to ensure compliance and enforcement of this order. c) That pending the hearing and determination of this suit, a temporary injunction do issue restraining the Defendants, whether by themselves, their servants, agents, employees, or unknown persons acting on their behalf, under their authority or with their acquiescence, from trespassing upon, entering, occupying, interfering with, damaging, alienating, developing, removing beacons or boundary marks from, constructing upon, or in any other manner dealing with all that parcel of land known as KWALE/GALU/KINONDO/533, situated in Kwale County ("the suit property"). AND THAT the Officer Commanding Station or the in-charge police officer, Diani Police Station, do take all necessary steps to ensure compliance and enforcement of this order. d) That costs of this Application do abide the outcome of the main suit. 10. The application is premised on the grounds, testimonial facts and the averments made out under the twenty-three (23) Paragraphed Supporting Affidavit sworn on 5 th February, ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 5 of 103

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2026 by MR. MOHAMED ABUKAR, together with one annexture marked as “MA - 1” annexed hereto. He averred as follows that: a. He was the Managing Director of ARC Petroleum Limited, the Plaintiff herein, duly authorised, conversant with the facts of this matter, and therefore competent to swear this affidavit. b. He had read and understood the Notice of Motion application and Certificate of Urgency filed herewith, as explained to him by the Plaintiff's Advocates on record, and he swore this affidavit in support thereof. c. The Plaintiff was the lawful and registered proprietor of all that parcel of land known as KWALE/GALU/KINONDO/533 situated in Kwale County. The Certificate of Title Deed and a recent Certificate of Official Search ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 6 of 103

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evidencing ownership were annexed and marked as "MA - 1" – pages -1 – 4. d. The Plaintiff had at all material times been in continuous, peaceful and uninterrupted possession of the suit property as absolute proprietor, exercising full rights of ownership, control and management. e. The suit property was encumbered by a registered charge in favour of the 1st Defendant to secure an advance of a sum of Kenya Shillings Thirty Five Million (Kshs. 35,000,000/=) extended to the 2nd Defendant under a dealership agreement for operation of a petrol station, which agreement was cancelled or rescinded in or about year 2019, leading to closure of the station. f. Subsequent correspondence between the parties revealed a dispute as to the outstanding balance, the 2nd Defendant ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 7 of 103

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asserting that substantial repayment had been made and that only a sum of Kenya Shillings Fifteen 15,000,000/=) Million remained (Kshs. outstanding, while the 1st Defendant had demanded full repayment without invoking the statutory enforcement process under the Land Act, No. 6 of 2012. Copies of the correspondence were annexed within “MA - 1” Pages 5 to 7. g. In or about received 2023, correspondence Defendant's execution year the from Advocates of documents Plaintiff the 1st requesting to facilitate reconstruction of a missing Green Card/file at the Kwale Land Registry. h. The Plaintiff, acting in good faith, executed and returned the requested documents and fully co - operated with the re construction process in order to assist in ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 8 of 103

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restoration of accurate land records. Copies of the said correspondence and executed forms were annexed within annexture marked as “MA - 1” Pages 8 to 12. i. The Plaintiff's undertaken co without - operation prejudice to was its proprietary rights and without conceding any unlawful or premature enforcement of the charge. j. To the best of his knowledge, the 1 st Defendant had never exercised its statutory power of sale, nor obtained any court order granting possession, entry, or enforcement over the suit property. k. He was advised by the Counsel that under the Land Registration Act, No. 3 of 2012, the Land Registrar was the statutory custodian of the Land Register and Green Card and re - construction thereof never ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 9 of 103

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conferred possession or enforcement rights upon a Chargee. l. While the Plaintiff acknowledged the 1 st Defendant's registered interest as Chargee, the Plaintiff retained superior possessory rights as registered proprietor in actual occupation, protected under law. m. The Plaintiff had enjoyed quiet possession and peaceful occupation of the suit property for a considerable period and continues to lawfully manage and utilise it. n. Notwithstanding without any the court foregoing, order or and statutory compliance, the Defendants had recently engaged in unlawful interference with the Plaintiff's possession by deploying unknown persons acting on their behalf, or with their authority or acquiescence, to trespass onto the suit property. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 10 of 103

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o. In or about January, 2026, the said unknown persons unlawfully entered the suit property, threatened the Plaintiff's agents, workers and security personnel, attempted to assert control, and engaged in acts amounting to trespass, thereby disrupting the Plaintiff's quiet enjoyment and posing an imminent risk of further unlawful occupation and breach of peace. p. The said acts had occasioned fear, insecurity and apprehension of violent dispossession among the Plaintiff's representatives and workers on site. q. Under the provision Sections 90, 94 and 96 of the Land Act, No. 6 of 2012, a Chargee has no right of entry, possession or sale unless the prescribed statutory notices were duly issued and due process strictly followed, which had not occurred in this case. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 11 of 103

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r. The acts complained of amounted to unlawful trespass and illegal self-help, which courts had consistently held to be impermissible irrespective of the existence of a registered charge. s. Unless Court, restrained the by this Defendants' Honourable conduct would occasion irreparable harm incapable of compensation violent by damages, dispossession, including destruction of beacons and fixtures, and violation of the Plaintiff's constitutional and statutory property rights. t. He was advised by the Plaintiff's Advocates on record that the Plaintiff had established a prima facie case with a probability of success, and that the balance of convenience favours preservation of the status quo pending determination of this suit. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 12 of 103

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u. He now produce the documents annexed hereto and marked as "MA - 1" collectively. III. The Responses to the Notice of Motion Application dated 5th February, 2026 11. The 1st Defendant opposed the Plaintiff’s Notice of Motion Application dated 5th February, 2026 by filed a Replying Affidavit of MWEI SHARON CHEPKORIR sworn 6th May, 2026 when the deponent stated:a. He was the 1st Defendant's Legal Counsel, fully conversant with matters of fact giving rise to the suit and duly authorized to swear this affidavit on its behalf. b. He had read and understood the Plaintiff's Notice of Motion application dated 5 th February, 2026 and the Supporting Affidavit sworn by Mohamed Abukar on an even date. He responded as follows:-. c. Preliminarily, was informed by the Counsel on record that the ELC lacked jurisdiction ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 13 of 103

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to entertain claims relating to a Chargee's exercise of the statutory power of sale. d. Without prejudice, the Plaintiff sought an injunction on the grounds that (a) statutory notices had not been issued; and (b) the outstanding would amount was disputed. He show that both grounds lacked merit. e. The 1st Defendant advanced to Galaxia Energy Limited, the Interested Party, an advance discount of a sum of Kenya Shillings Thirty 35,000,000.00/=) Five on Million the terms (Kshs. of a Branded Products Supply Agreement dated 2nd February, 2017. Annexed and marked as “MS – 1” was a copy of the Branded Products Supply Agreement dated 2nd February, 2017. f. As security, the Plaintiff offered the title to the suit land and a Charge dated 25th ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 14 of 103

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September, 2017 was registered in favour of the 1st Defendant. He annexed and marked as “MS – 2” was a copy of the Charge dated 25th September, 2017. g. The advance recoverable discount monthly was from a loan revenues generated by the Interested Party. As at August, 2024, only six (6) instalments totaling a sum of Kenya Shillings One Million Nine Fourty Four Thousand Four Fifty Hundred (Kshs. 1,944,450.00/=) had been recovered. He annexed and marked as “MS – 3” was a copy of the statement of account as at August, 2024. h. Given the Interested Party's default, the 1st Defendant caused to be issued a three (3) months' statutory notice dated 2 nd March, 2020. He annexed and mark as “MS – 4” was a copy of the three (3) months' statutory notice dated 2nd March, 2020 and ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 15 of 103

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its Certificate of Posting. The 1st Defendant next caused to be issued a forty (40) days' notice to sell dated 2nd September, 2020. He annexed and marked as “MS – 5” was a copy of the forty (40) days' notice to sell dated 2nd September, 2020 and its Certificate of Posting). i. The 1st Defendant also caused to be issued a forty-five (45) days redemption notice and notification of sale dated 11th March, 2021. He annexed and marked as “MS – 6” was a copy of the redemption notice and notification of sale dated 11th March, 2021 and its Certificate of Posting. j. An auction was then conducted on 14 th October, 2024 where Homenet Limited emerged the highest bidder. A Certificate of Sale and Memorandum of Sale of an even date were duly executed. Annex and marked as “MS – 7” was a copy of the ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 16 of 103

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Certificate of Sale and Memorandum of Sale dated 14th October, 2024. k. A transfer was yet to be effected because the Plaintiff, in cahoots with government officers, had frustrated the issuance of a Land Control Board Letter of Consent. The 1st Defendant would move the court appropriately in that regard. l. Given the sale, he was informed by Counsel on record that the Plaintiff's equity of redemption had been extinguished. The injunction sought could not issue. m. The claim that there was a dispute on the amount due was to be rejected for two (2) reasons. First, it was not a ground for stopping the exercise of the statutory power of sale. n. Second, it was not a ground available to the Plaintiff. The Plaintiff was not a party to ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 17 of 103

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the contract that gave rise to the dispute on the amount due. o. Third, even if the ground was available, there was no evidence that a sum of Kenya Shillings Twenty Million (Kshs. 20,000,00.00/=) had been repaid, leaving a balance of a sum of Kenya Shillings Fifteen Million (Kshs. 15,000,000.00/=) as alleged by the Plaintiff. p. Having charged the property with the understanding that it would be sold in case of default, and default having been admitted, the power of sale crystallized and was rightly exercised q. The 1st Defendant never attempted to access the property after the sale. But in any event, such access would have been authorized under the charge and could not be a trespass. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 18 of 103

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r. The power of sale having crystalized and had been exercised, the Plaintiff's remedy, if any, was in damages. It could not obtain an injunction to forestall the transfer and taking of possession by the auction purchaser. s. Therefore, he prayed that the application be dismissed with costs. 12. The 2nd Interested Party filed a Replying Affidavit in response to the Application dated 5th February, 2026 by NORMAN SOMBA MUTISO sworn on 4th May, 2026. He deponed:a. He was a male adult of sound mind and a Director of the 2nd Interested Party with full knowledge of the facts surrounding this matter and duly authorized hence competent to swear this Affidavit. Annexed and marked as “NM – 1 and 2” was a copy of the Director's National Identity Card and Homenet Limited CR12 Form respectively ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 19 of 103

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b. He had read and understood the Notice of Motion application dated 5th February, 2026 and the Supporting Affidavit sworn on even date. He swore this affidavit in opposition to the Application. c. The facts and matters deponed to herein were derived partly from his own knowledge acquired in his capacity and partly from information and advice received by himself from the 2 nd Interested Party's advocate. To the extent that any statement made herein was based on information or belief. d. From a reading of the Application, he noted that the Plaintiff/Applicant sought inter alia, the following prayers from this Honourable Court:i. A temporary injunction pending the inter partes determination ELCLC E006 of 2026 hearing of HON. JUSTICE L.L NAIKUINI the and Application Page 20 of 103

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dated 5th February, 2026 restraining the Defendants and/or their servants and agents from dealing with the suit land in any way; ii. A temporary injunction pending the hearing and determination of the suit restraining their the Defendants servants and and/or agents from dealing with the suit land in any way; iii. The Officer Commanding Station or the in-charge police officer, Diana Police Station do take all' necessary steps to ensure compliance and enforcement of the court orders. e. The Application was opposed on the following grounds:i) The orders sought, if allowed, have the effect of dispossessing me of my interest over property title no. Kwale/Galu/Kinondo/533. This will be ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 21 of 103

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contrary to Article 40 of the Constitution. ii) The orders sought would have the effect of interfering with the process of transfer of the subject property following a legitimate public auction i.e Transfer by Chargee to Homenet Limited - the 2nd Interested Party herein. f. He wished to provide a background in order for the court to appreciate the pertinent issues related to the matter. The Background i) The subject property registered in the name of the Plaintiff. It was charged in favour of the 1st Defendant for a total sum of Kenya Shillings Thirty Five Million (Kshs. 35,000,000/=). ii) It was sold at a public auction conducted on 14th October, 2024 by ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 22 of 103

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Regent Auctioneers instructions of the on 1st the Defendant. Annexed and marked as “NM – 3” was a copy of the title over the suit land with the Chargee's interest duly noted in the encumbrance section iii) Vide a Memorandum of Sale dated 14th October, 2024. He was declared the purchaser at the auction and paid a sum of Kenya Shillings Three Million Eight Thirty Five Thousand (Kshs. 3,835,000/=) as deposit of the purchase price to the auctioneers. iv) The balance in the sum of Kenya Shillings Thirty Fifteen Four Million Thousand Five (Kshs. 34,515,000/=) was to be settled in 90 days from the date of the Memorandum of Sale. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 23 of 103

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v) He subsequently held discussions with the 1st Defendant in his capacity as Director of the 2nd Interested Party and agreed to extend the completion date to 1st December, 2025. vi) The outstanding payments for the balance of the purchase price was settled and the 1st Defendant forwarded the completion documents to the 2nd Interested Party's advocates to enable procuring the LCB Letter of Consent to Transfer and registration in favour of Homenet Limited. His advocates began the process of having the title transferred to the company's name which process stalled upon the institution of the present case and issuance of interim orders by the court. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 24 of 103

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g. Contrary to the averments in paragraph 10 of the Supporting Affidavit, he stated that the 1st Defendant complied with all the necessary requirements in the exercise of statutory power of sale specifically the issuance of the notices which were forwarded to his Advocates vide the 1st Defendant's Advocate's letter dated 2 nd December, 2025. h. He was advised by his advocates that the effect of the orders sought if granted would be to:a) Dispossess him of the subject property when he had an interest in the subject property. b) Unnecessarily deny him his right to utilize the subject property in accordance with Article 40 of the Constitution. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 25 of 103

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c) Lead to untold loss as he had already settled the full purchase price and began the transfer process in favour of Homenet Limited. i. He stated that the auction process was properly conducted and he was declared the successful bidder. Consequently, the Plaintiff/Applicant's interest in the property was extinguished and Plaintiff/Applicant no recognizable interest legal longer the had a capable of protection by injunction. j. In view of the foregoing, he held that the Application was without merit and ought to be dismissed with costs. IV. Further Affidavit by the Plaintiff/Applicant 13. In rejoinder to the Replying Affidavit by the 1 st Defendant’s sworn on 6th May, 2026, the Applicant filed a 20 Paragraphed ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 26 of 103

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Further Affidavit sworn on 25th May, 2026 by the said MR. BASHIR MOHAMED ABUKAR. He averred as follows that:a. He was the Managing Director of ARC Petroleum Limited, the Plaintiff herein and hence duly authorized and conversant with the facts giving rise to this suit. b. He swore this Further Affidavit in response to the 1 st Defendant's Replying Affidavit sworn by Mwei Sharon Chepkorir on 6th May, 2026, and to supplement the averments in his Supporting Affidavit sworn on 5 th February, 2026 c. The 1st Defendant's Replying Affidavit was self-serving, deliberately misleading. It attempted to sanitize an unlawful and malicious interference with the Plaintiff's property. d. As pleaded in their Plaint dated 5th February, 2026, the 1st Defendant's aggressive actions against the suit property was inextricably linked to an underlying commercial dispute regarding the Likoni Road Service Station lease. e. The 1st Defendant's bad faith and malice was deeply rooted in their subsequent mismanagement of the said ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 27 of 103

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Likoni Road facility. The handover of the station was not an abandonment, but a mutual, transparent agreement. Specifically, following an email inquiry from the 1 st Defendant's official, Sonia Chege, he responded unequivocally via email confirming the loan repayment and formally authorizing them to take over the station. Annexed hereto and mark as "BMA - 1" were a bundle of this May 2018 email correspondence and handover letters confirming their good faith surrender of the station. f. Despite of this transparent handover with his full blessing, the 1st Defendant unilaterally gave the station to a thirdparty dealer of their own choosing, whose incompetence led to the station being closed for a period of one (1) year and two (2) months. g. During this fourteen-month closure, the Plaintiff and the Interested Party were forced to pay rent and overheads from their own pockets. Furthermore, the 1 st Defendant's actions, negligence, and threats to auction their equipment resulted in substantial damage to the property and machinery at the station. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 28 of 103

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h. Following these massive losses, they rightfully called for a reconciliation of accounts. Annexed hereto and mark as "BMA - 2" was a copy of a formal Demand and Termination Letter from our Advocates dated 10 th April, 2019, wherein they formally quantified the damage to their machinery at a sum of Kenya Shillings Ten Million (Kshs. 10,000,000.00/=) and demanded a strict reconciliation of accounts before any settlement of the advance discount. i. To further demonstrate that the actual quantum of the debt was heavily disputed and un-reconciled, he annexed hereto and mark as "BMA - 3" a bundle of email correspondence between the 1st Defendant's officials and himself. Notably, in an email dated 9 th April, 2019, he explicitly demanded clarity on the balance of the advance discount account and a statement for the same, a request the 1st Defendant blatantly ignored. j. The 1st Defendant adamantly refused to reconcile the accounts or provide the requested statements. Instead, they maliciously opted to weaponize the Charge and rush ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 29 of 103

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to auction their unrelated prime property over a strictly disputed debt. k. He categorically denied that the Plaintiff received the alleged 3-month, 40-day, and 45-day statutory notices under the Land Act, 2012. He was advised by the Plaintiff's Advocates on record that the 1 st Defendant's reliance on mere postal dispatch receipts never constituted conclusive proof of actual delivery or service in law. l. Regarding the purported auction allegedly conducted on 14th October, 2024, he stated that the 1 st Defendant completely failed to advertise the intended sale in any newspaper of nationwide circulation. He was advised by their Advocates that this was a blatant violation of the mandatory provisions of the Land Act, 2012, rendering the purported auction a secretive, illegal, and null exercise. m. The Plaintiff vehemently denied the occurrence of any lawful public auction. Hence, the Plaintiff put the 1 st ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 30 of 103

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Defendant to strict proof thereof, including proof of public advertisement. n. Without prejudice to the foregoing denial, and assuming that any such purported, secretive sale was attempted on 14th October, 2024, the alleged figure of a sum of Kenya Shillings Thirty Eight Million Three Fifty Thousand (Kshs. 38,350,000/=) represented an unconscionable and extreme undervaluation of a prime beachfront property. o. To demonstrate this, the Plaintiff commissioned an independent valuation by Avenue Valuers. He annexed hereto and mark as "BMA - 4" was a соpy of the Valuation Report dated 20th May, 2026 confirming that the property's true market and forced sale values are vastly superior to the paltry sum allegedly realized. p. The Plaintiff was never served with a contemporaneous Forced Sale Valuation Report prior to the alleged auction date of 14th October, 2024. He was advised by his Advocates that the 1st Defendant acted in flagrant breach of its mandatory statutory duty under the provision of Section 97(1) of the Land Act, No. 6 of 2012. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 31 of 103

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q. In response to the 1st Defendant's assertion that the Plaintiff's equity of redemption had been extinguished, he was by their Advocates on record that an alleged, unproven, unadvertised, and irregular auction could not validly extinguish the equity of redemption prior to the lawful registration of a transfer. r. He annexed hereto and marked as "BMA - 5" was a Certificate of Electronic Evidence executed pursuant to the provision of Section 106B of the Evidence Act, Cap. 80 verifying the integrity and admissibility of the electronic mail correspondence produced herein as "BMA - 1" and 3". s. If the 1st Defendant was not injuncted, the Plaintiff would suffer an irreparable loss of unique real estate that could not be compensated by an award of damages, effectively destroying the substratum of their suit. V. The Notice of Motion Application dated 9th April, 2026 by Intended Interested Party 14. The Applicant sought for the following orders: - ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 32 of 103

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a) The Intended Interested Party HOMENET LIMITED be joined to these proceedings as an Interested Party; b) The Applicant, upon joinder, be allowed by the Honourable court and/or be at liberty to file any such pleadings that it may desire in propagating its case herein; c) Costs of the application be provided for. 15. The application was premised on the grounds, testimonial facts and the averments made out under the fourteen (14) Paragraphed Supporting Affidavit sworn on 9th April, 2026 by MR. NORMAN SOMBA MUTISO, together with annextures marked as “NMS - 1 to 10” annexed hereto. He averred as follows that: a) He was an adult of sound mind and the Director of the Intended Interested Party and, therefore, was competent and duly authorised to swear the affidavit on behalf of the Company. b) By virtue of a Memorandum of Sale dated 14 th October, 2024, the Intended Interested Party was declared the purchaser at a public auction conducted by Regent ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 33 of 103

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Auctioneers, pursuant to the instructions of the 1st Defendant, over the suit property. c) The Intended Interested Party duly paid a deposit of a sum of Kenya Shillings Three Million Eight Thirty Five Thousand (Kshs. 3,835,000/=), while the balance of a sum of Kenya Shillings Thirty Four Million Five Fifteen Thousand (Kshs. 34,515,000/=) was to be settled within ninety (90) days from the date of the Memorandum of Sale. d) Subsequently, the Deponent, in his capacity as a Director of the Intended Interested Party, held discussions with the 1st Defendant, during which it was agreed that the completion date would be extended to 1st December, 2025. e) Upon settlement of the outstanding balance of the purchase price, the 1st Defendant's advocates duly forwarded the completion documents to facilitate the procurement of the requisite Land Control Board Letter of Consent to Transfer and the subsequent registration ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 34 of 103

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of the property in the name of the Intended Interested Party. f) The Intended Interested Party's advocates thereafter proceeded to lodge the necessary documents for the Land Control Board Consent to Transfer. However, the process was not completed following the institution of the present suit by the Plaintiff and the issuance of interim orders directing that the status quo be maintained in respect of the suit property. g) Consequently, the Intended Interested Party had been unable to finalise the registration process in its favour, and no further steps towards completion of the transfer had been undertaken pending the directions and further orders of the Court. h) The Deponent further averred that the 1st Defendant had complied with all the necessary requirements in the exercise of its statutory power of sale, and had, inter alia, issued the following notices and undertaken the following steps: - ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 35 of 103

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i. A 30 - day default notice dated 13 th 2020, together with the relevant January, postage stamps; ii. A 90-day statutory notice dated 2 nd March, 2020, together with the relevant postage stamps; iii. A 40-day notice to sell dated 2 nd September, 2020; iv. A 45-day redemption notice dated 11th March, 2021, issued by Regent Auctioneers; v. A 14-day notification of sale issued by Regent Auctioneers dated 11th March, 2021; and vi. An advertisement of the public auction over the property in a newspaper of 27 th September, 2024. i) The Deponent maintained that the auction process was properly conducted and that the Intended Interested Party was declared the successful bidder and, consequently, acquired a proprietary and beneficial interest in the suit property. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 36 of 103

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j) The Intended Interested Party averred that it stood to suffer substantial loss and prejudice if it was not joined in the proceedings, considering that it had lawfully acquired an interest in the suit property through the public auction and had paid the purchase price. k) Further, the participation of the Intended Interested Party in the proceedings was necessary to enable the Court to effectively and completely adjudicate upon and settle all the questions involved in the suit, since any determination made in its absence was likely to directly affect and prejudice its proprietary and economic interests. l) The Intended Interested Party further averred that no prejudice would be occasioned to the existing parties to the suit if the orders sought were granted. m) Finally, the Intended Interested Party stated that it was in the interests of justice and fairness that it be joined to the proceedings and be afforded an opportunity to be heard before any determination ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 37 of 103

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capable of affecting its asserted interest in the suit property was made. VI. The responses by the Plaintiff to Application dated 9th April, 2026 by the Intended Interested Party. 16. Upon being served with the application, the Plaintiff opposed it vide the Replying Affidavit dated 25 th May, 2026 by MR BASHIR MOHAMED ABUKAR wherein he deponed as follows: a. He was the Managing Director of ARC Petroleum Limited, the Plaintiff herein, and duly authorized to swear this Affidavit in opposition to the Intended Interested Party's Notice of Motion Application dated 9 th April, 2026. b. He had read the Supporting Affidavit of Norman Somba Mutiso sworn on 9th April, 2026 on behalf of Homenet Limited. The Plaintiff had no knowledge of, and vehemently denied the occurrence of, the alleged public auction purportedly held on 14th October, 2024. The purported Memorandum of Sale annexed to their application was a self-serving document that could not bind the Plaintiff. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 38 of 103

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c. As extensively pleaded in the Plaintiff's Plaint and Notice of Motion Application both dated 5 th February, 2026, the 1st Defendant (the Chargee) failed to serve the mandatory statutory notices under the Land Act, No. 6 of 2012. Therefore, any purported auction that Homenet Limited claims to have participated in on 14 th October, 2024 was a legal nullity ab initio. d. He was advised by their Advocates on record, that a party claiming to be a purchaser at a contested and unproven public auction never acquired an indefeasible interest in the property merely by producing an alleged Memorandum of Sale. e. He was further advised by his Advocates that under the provision of Section 99 of the Land Act, No. 6 of 2012, an auction purchaser's title was only protected upon the lawful registration of the transfer. To date, no transfer had been registered in favor of Homenet Limited. f. Consequently, the Plaintiff's equity of redemption remained strictly intact and superior to any unperfected, ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 39 of 103

page 39 of 103

alleged contractual rights Homenet Limited claims to hold. g. The primary dispute before this Honourable Court was strictly between the Chargor (Plaintiff) and the Chargee (1st Defendant) regarding the legality of the 1 st Defendant's actions and the alleged exercise of the Statutory Power of Sale. h. He was advised by their Advocates that if Homenet Limited suffered any detriment by participating in a purported public auction on 14th October, 2024 that was statutorily defective, their legal remedy lied strictly in a claim for damages or a refund against the 1 st Defendant and the Auctioneer, not in seeking to forcefully acquire the Plaintiff's property in these proceedings. i. Joining Homenet Limited to these proceedings was not necessary for the court to determine whether the 1 st Defendant breached the Land Act. Their joinder would only serve to unnecessarily expand the scope of the pleadings, delay the expeditious disposal of the suit, and prejudice the Plaintiff's pursuit of justice. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 40 of 103

page 40 of 103

VI. Submissions 17. On diverse dates of 16th April, 2026 and 7th May, 2026 respectively, while all parties were present in Court were directed to dispose off all the application by way of written submissions thereof. 18. Pursuant to that they all obliged. The Honourable Court reserved 23rd September, 2026 for the delivery of the Ruling accordingly. A. The Written Submissions by the Plaintiff 19. Pursuant to the directions issued by the Honourable Court on 7th May, 2026, the Plaintiff filed through the Law firm of Messrs Ahmed Luqmaan & Company Advocates filed their Written Submissions. It addressed both the Notice of Motion applications dated 5th February, 2026 and 9th April, 2026. Mr. Ahmed Luqmaan Advocate commenced his submissions by providing the Court with a brief background of the matter. The Learned Counsel submitted that the Plaintiff was the registered proprietor of the suit land, situate in Kwale County. The suit property had been charged in favour of the 1st Defendant as security for financial accommodations and ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 41 of 103

page 41 of 103

petroleum trading obligations arising from a Branded Products Supply Agreement dated 2nd February, 2017 between the 1st Defendant and the Interested Party, Galaxia Energy Limited. 20. The Learned Counsel informed the Court that, pursuant to the said arrangement, the Interested Party operated the Likoni Road Service Station under a dealership arrangement involving the supply and resale of petroleum products. Subsequently, the Interested Party allegedly experienced operational and financial difficulties, whereupon the 1 st Defendant assumed operational control of the service station under an interim arrangement pending negotiations concerning the continued operations and restructuring of the obligations arising from the dealership relationship. It was submitted that the negotiations were never concluded and that the 1st Defendant subsequently ceased operations at the service station and purported to invoke remedies under the charge instrument, including the alleged exercise of its statutory power of sale over the suit property. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 42 of 103

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21. The Learned Counsel averred that the purported realization process was fundamentally unlawful and procedurally defective, having allegedly been undertaken without service of the mandatory statutory notices required under the Land Act. The Learned Counsel further submitted that, in or about January, 2026, unknown persons entered the suit property, threatened the Plaintiff’s agents and employees and attempted to assert control over the service station. According to the Plaintiff, it was only upon being served with the 1st Defendant’s Replying Affidavit that it became aware that the 1st Defendant purported to have exercised its statutory power of sale. Prior thereto, the Plaintiff maintained that it had never been served with any statutory notices, redemption notices, notifications of sale or notices of public auction. 22. On the Plaintiff’s Notice of Motion application dated 5 th February 2026. The Learned Counsel submitted that the principal issue for determination was whether the Plaintiff had satisfied the threshold for the grant of temporary injunctive orders as established in the case of “Giella – ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 43 of 103

page 43 of 103

Versus – Cassman Brown & Company Limited [1973] EA 358.” The Learned Counsel consequently invited the Court to consider whether the Plaintiff had established a prima facie case, whether it was likely to suffer irreparable harm and whether the balance of convenience tilted in its favour. 23. On the question of whether the Plaintiff had established a prima facie case. The Learned Counsel relied on the decision in the case of “Mrao Limited – Versus – First American Bank of Kenya Limited & 2 Others [2003] eKLR” , on the meaning and nature of a prima facie case. The Plaintiff submitted that its proprietary rights over the suit property had been apparently infringed through the alleged unlawful exercise of the 1 st Defendant’s statutory power of sale and that the circumstances surrounding the impugned realization process required explanation and rebuttal by the 1st Defendant. 24. The Learned Counsel further argued that the 1 st Defendant had failed to comply with the mandatory requirements of the provision of Sections 90 and 96 of the Land Act No. 6 of 2012 concerning the issuance and service of statutory notices. It was contended ELCLC E006 of 2026 that there was HON. JUSTICE L.L NAIKUINI also no evidence Page 44 of 103

page 44 of 103

demonstrating compliance with the Auctioneers Rules requiring the advertisement of the intended public auction in a newspaper of nationwide circulation. Therefore, the Plaintiff asserted that the alleged public auction conducted on 14th October, 2024 was procedurally opaque and unlawful. 25. The Plaintiff further challenged the alleged sale price of the suit property. It was submitted that the 1 st Defendant purportedly sold the suit property at a sum of Kenya Shillings Thirty Eight Million Three Fifty Thousand (Kshs. 38,350,000.00/=), whereas the valuation report by Avenue Valuers dated 20th May, 2026 placed the market value of the suit property at a sum of Kenya Shillings One Fourty Eight Million (Kshs. 148,000,000.00/=) and its forced sale value at a sum of Kenya Shillings One Eleven Million (Kshs. 111,000,000.00/=). Thus, the Learned Counsel argued that the alleged sale had been undertaken at a gross undervalue and in breach of the statutory duty imposed upon a Chargee under the provision of Section 97 of the Land Act, No. 6 of 2012. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 45 of 103

page 45 of 103

26. In support of the foregoing legal preposition, reliance was placed on the decision in the case of:- “Kioleken Ole Kiplonka Orumoi – Versus – Mellech Engineering and Construction Limited [2015] eKLR”, which the Plaintiff submitted stood for the proposition that a Chargee was required to undertake a proper contemporaneous forced - sale valuation and that a sale at a gross undervalue may amount to a breach of the Chargee’s statutory duty of care. Consequently, the Learned Counsel urged the Court to find that the Plaintiff had established a prima facie case capable of succeeding and to grant the temporary orders of injunction sought. 27. On the issue of irreparable harm. The Learned Counsel submitted that, at the time of instituting the suit, the Plaintiff was unaware that the 1st Defendant had purportedly exercised its statutory power of sale and believed that the 1 st Defendant had no right to enter, trespass upon or assert control over the suit property. It was submitted that unless injunctive orders were granted, the alleged acts of trespass, interference and damage to the Plaintiff’s property would continue and thereby violate the Plaintiff’s constitutional ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 46 of 103

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right to property under the provision of Article 40 of the Constitution. 28. The Learned Counsel further emphasized that the suit property was a prime and highly developed beachfront property situated in Diani, the County of Kwale. It was therefore a unique and irreplaceable asset. The Plaintiff asserted that the completion and registration of the transfer in favour of Homenet Limited would result in the permanent extinguishment of the Plaintiff’s equity of redemption and would irreversibly alter the proprietary status of the suit property before the legality of the impugned realization process had been judicially interrogated. It was further contended that the substratum of the suit would thereby be destroyed and that an award of damages would not constitute an adequate remedy. 29. On the balance of convenience. The Learned Counsel averred that the scales of justice tilted overwhelmingly in favour of the Plaintiff. It was argued that should the Court decline to issue injunctive orders, the 1 st Defendant would proceed with the registration of the transfer to Homenet ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 47 of 103

page 47 of 103

Limited, thereby permanently and irreversibly extinguishing the Plaintiff’s equity of redemption over the suit property on the basis of an auction process which the Plaintiff contended was clandestine, unadvertised and statutorily defective. 30. On the issue of jurisdiction. The Plaintiff submitted that the jurisdiction of this Honourable Court was properly invoked under the provision of Article 162(2)(b) of the Constitution, Section 13 of the Environment and Land Court Act, No. 19 of 2011 and Sections 150 and 101 of the Land Act, No. 6 of 2011. The Learned Counsel maintained that the dispute concerned the legality of the purported exercise of the statutory power of sale over the suit property, the validity of the alleged auction and intended transfer and the alleged unlawful interference with the Plaintiff’s proprietary interests in land. It was therefore submitted that the dispute directly concerned title to land, disposition of interests in land and enforcement of interests created under the Land Act and thus fell squarely within the jurisdiction of this Honourable Court. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 48 of 103

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B. The Written Submissions by the Plaintiff in Opposition to the Intended Interested Party’s Application 31. Turning to the Intended Interested Party’s Notice of Motion application dated 9th April, 2026, the Learned Counsel for the Plaintiff submitted that Homenet Limited sought to be joined to the proceedings on the basis that it was the alleged successful bidder and holder of a Memorandum of Sale arising from the purported public auction conducted on 14 th October, 2024. 32. The Plaintiff opposed the application through the Replying Affidavit of Bashir Mohamed Abukar and maintained that the core cause of action in the suit related to alleged statutory breaches committed by the 1st Defendant in the exercise of its statutory power of sale. 33. The Plaintiff distilled two principal issues for determination in relation to the joinder application, namely whether the joinder of the Intended Interested Party would unlawfully mutate the Plaintiff’s cause of action and whether Homenet Limited constituted a necessary party within the meaning of Order 1 Rule 10(2) of the Civil Procedure Rules, 2010. The ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 49 of 103

page 49 of 103

Learned Counsel submitted that the application for joinder was also premised upon Section 99 of the Land Act, 2012. 34. On the question of whether joinder would mutate the Plaintiff’s cause of action. The Learned Counsel acknowledged that Homenet Limited claimed an interest in the suit property arising from the alleged public auction of 14th October, 2024. However, it was submitted that the Plaintiff’s principal grievance remained directed against the conduct of the 1st Defendant in the purported exercise of its statutory power of sale, including the alleged non-service of statutory notices, procedural irregularities in the auction process and the alleged sale of the suit property at a gross undervalue. 35. The Plaintiff maintained that any interest claimed by Homenet Limited was purely derivative and contingent upon the legality of the realization process undertaken by the 1 st Defendant. The Learned Counsel further submitted that no transfer had been registered in favour of the Intended Interested Party and that any interest claimed by it therefore remained unperfected and subject to the determination of ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 50 of 103

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the legality of the impugned realization process. The Plaintiff contended that Homenet Limited could not acquire greater rights than those lawfully flowing from a valid exercise of the statutory power of sale. 36. On the question of whether Homenet Limited was a necessary party to the suit. The Learned Counsel referred to the provision of Order 1 Rule 10 (2) of the Civil Procedure Rules, 2010 and submitted that the test for joinder was whether the presence of the proposed party was necessary to enable the Court effectually and completely adjudicate upon and settle all the questions involved in the suit. The Plaintiff argued that Homenet Limited had failed to satisfy that threshold because the principal questions concerning the validity of the statutory notices, the alleged exercise of the statutory power of sale and the valuation and sale process could be determined between the Plaintiff and the 1st Defendant. 37. The Learned Counsel further submitted that Homenet Limited’s reliance on the statutory protection afforded to a purchaser was ELCLC E006 of 2026 premature and misconceived. HON. JUSTICE L.L NAIKUINI It was Page 51 of 103

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contended that the provision of Section 99 (1) of the Land Act contemplated protection arising upon the lawful registration of the transfer of the charged land and that such protection did not crystallise merely upon the fall of the hammer or execution of a Memorandum of Sale. Since no transfer had been registered in favour of Homenet Limited, the Plaintiff maintained that it could not invoke the protection of the said provision. 38. To buttress on the foregoing position, reliance was placed on the decision of the Supreme Court in the case of:- “Dina Management Limited – Versus – County Government of Mombasa & 5 Others (Petition 8 (E010) of 2021) [2023] KESC 30 (KLR)”, on the proposition that where the root of a claimed title was challenged, the party claiming the resultant proprietary interest must establish the legality of that root. The Plaintiff submitted that since the legality of the 1 st Defendant’s exercise of the statutory power of sale remained under challenge, the root of Homenet Limited’s alleged interest was itself in dispute. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 52 of 103

page 52 of 103

39. The Learned Counsel submitted that the Intended Interested Party’s remedy, should it ultimately suffer loss arising from the impugned transaction, lay in pursuing an appropriate claim against the 1st Defendant for damages or refund. 40. Therefore, the Plaintiff urged the Court to find that Homenet Limited had failed to establish the requisite locus or necessity for joinder and to dismiss the Notice of Motion application dated 9th April 2026 with costs. C. The Written Submissions by the 1st Defendant 41. As indicated above, the 1st Defendant opposed the Notice of Motion application dated 5th February, 2026 by the Plaintiff. Through the Law firm of Messrs. Murui Mungai & Company Advocates filed their written submissions. Mr. Kongere Advocate raised the issue of the jurisdiction of this Honourable Court and submitted that the gravamen of the dispute concerned the enforcement of a commercial security and the exercise of a Chargee’s statutory power of sale. The Learned Counsel submitted that the mere fact that land had been offered as security did not, by itself, render every dispute arising from the underlying commercial arrangement ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 53 of 103

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a dispute falling within the jurisdiction of the Environment and Land Court. 42. In support of the foregoing proposition, the Learned Counsel relied on the decisions in the case of:- “Diamond Trust Bank Kenya Limited – Versus – FHH [2022] KECA 769 (KLR)” and “Registered Trustees; Kenya Ports Authority Pension Scheme – Versus – Bwana [2023] KECA 772 (KLR)”, submitting that the substance and gravamen of the dispute, rather than the mere involvement of land as security, was determinative of the appropriate jurisdiction. Therefore, the 1 st Defendant urged the Court to find that the present dispute principally concerned the enforcement of commercial obligations and the realization of security. 43. Without prejudice to the issue of jurisdiction, the Learned Counsel proceeded to address the Plaintiff’s application on its merits and relied on the principles in “Giella – Versus – Cassman Brown (Supra).” It was submitted that the Plaintiff was required to establish a prima facie case with a probability of success, demonstrate the likelihood of suffering irreparable injury incapable of compensation by ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 54 of 103

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damages and, where necessary, establish that the balance of convenience tilted in its favour. 44. On whether the Plaintiff had established a prima facie case. The 1st Defendant relied on the decision in “Mrao Limited – Versus – First American Bank of Kenya Limited (Supra)” and submitted that the Plaintiff had failed to demonstrate an apparent infringement of a legal right requiring explanation or rebuttal. The Learned Counsel contended that the 1 st Defendant had lawfully exercised its rights under the charge instrument following default. 45. The Learned Counsel submitted that the Plaintiff’s allegation regarding non-service of statutory notices was unfounded because the 1st Defendant had placed before the Court the relevant notices and evidence of their dispatch to the addresses provided by the Plaintiff in the charge documentation. It was contended that the requisite statutory notices, including the three-month statutory notice, notice to sell, redemption notice and notification of sale, had been duly issued and served in accordance with the law. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 55 of 103

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46. In support of the submission concerning service of statutory notices, reliance was placed on the case of:- “Jamber Enterprises Limited – Versus – NIC Bank Kenya Plc & Another [2019] KEHC 882 (KLR)”, where the Learned Counsel submitted that the Court considered the burden resting upon a Chargee where service of statutory notices is disputed and recognized that evidence demonstrating proper addressing and posting of the notices may discharge that burden. 47. The 1st Defendant further argued that the dispute concerning the precise amount allegedly outstanding was insufficient to warrant the grant of an injunction. Reliance was placed on the cases of:- “Robert Njoya Muthara & Another – Versus – Barclays Bank of Kenya Limited & Another [2017] KECA 685 (KLR)” and “Rukundo Limited – Versus – Jamii Bora Bank Limited & 2 Others [2018] KEHC 5773 (KLR)”, for the proposition that a mere dispute regarding the amount due does not ordinarily restrain a chargee from exercising its statutory power of sale where default is otherwise established. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 56 of 103

page 56 of 103

48. On the question of irreparable injury. The Learned Counsel asserted that the suit property had voluntarily been offered as security and was consequently available for realization upon default. It was further submitted that any loss allegedly suffered by the Plaintiff was quantifiable and compensable by an award of damages and that the Plaintiff had not demonstrated that the 1st Defendant would be incapable of satisfying any damages ultimately awarded by the Court. 49. The Learned Counsel urged the Court to find that the Plaintiff had failed to satisfy the second limb under the principles in “Giella – Versus – Cassman Brown (Supra)”. The 1st Defendant maintained that the Plaintiff had neither established a prima facie case nor demonstrated irreparable injury and consequently urged the Court to dismiss the Plaintiff’s Notice of Motion application dated 5th February, 2026 with costs. VII. Analysis and Determination 50. I have keenly considered all the applications fied herein by parties, the Supporting and Further Affidavits thereto together with all the annexures thereof, the Replying Affidavits and Grounds of ELCLC E006 of 2026 Opposition filed in response HON. JUSTICE L.L NAIKUINI thereto, the Page 57 of 103

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respective written submissions by the parties, the myriad of cited authorities and the relevant provisions of the Constitution of Kenya, 2010 and the law. 51. In order to arrive at a just, fair, reasonable and informed decision, this Honourable Court has framed the following four (4) salient issues for its determination: a) Whether this Honourable Court has jurisdiction to hear and determine the dispute and the two ( 2 ) applications herein; b) Whether the Plaintiff through its Notice of Motion application dated 5th February, 2026 meets the threshold for granting interim temporary injunction and preservatory orders as provided for in Law. c) Whether the Intended Interested Party through its Notice of Motion application dated 9th April, 2026 has satisfied the legal threshold to be joined in these proceedings as an Interested Party; d) Who should bear the costs of the two ( 2 ) applications. ISSUE No. a) Whether this Honourable Court has jurisdiction to hear and determine the dispute and the two ( 2 ) applications herein. 52. Prior to embarking on the substantive analysis of the applications, this Honourable Court considers it necessary to ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 58 of 103

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briefly restate the factual background giving rise to the two applications. The dispute revolves around the suit land. The Plaintiff contends that the 1st Defendant unlawfully exercised its statutory power of sale over the suit property. The Plaintiff particularly challenges the service of the statutory notices, the conduct of the alleged public auction, the adequacy of the sale price and the intended transfer and registration of the suit property in favour of Homenet Limited, which claims to have emerged as the successful purchaser at the public auction. 53. On the other hand, the 1st Defendant, maintains that the Plaintiff was in default of its obligations under the relevant security documents and that the statutory power of sale lawfully accrued. It is the 1 st Defendant’s case that the requisite notices were duly issued and served and that the realization process, including the alleged public auction, was undertaken in accordance with the law. 54. Against this background, the legal entity trading in the names and style of Homenet Limited subsequently formally moved the Court through filing of its Notice of Motion application ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 59 of 103

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dated 9th April, 2026. Principally, it sought to be joined in these proceedings as an Interested Party. It asserts that it participated in the public auction concerning the suit property and in the process, emerged as the successful purchaser and acquired an interest which is likely to be directly affected by the eventual determination of this suit. That is adequate for the facts of the case. 55. Now turning to the issues for analysis. Critically speaking, the 1st Defendant challenged the jurisdiction of this Court to hear and determine this matter. Essentially, the 1 st Defendant vehemently attacked the legal mandate of the Court to entertain the issues based on what is now commonly referred to as “the Doctrine of Pre – Dorminant Purpose test” in the legal parlance. These pertained to matters that were involved in mixed contract and bearing aspects of mortgage, Accounts or Charge. I shall come back on this aspect later on in this Ruling. 56. Strictly and legally speaking, without jurisdiction, a Court acts in vain and any proceedings undertaken or orders issued without jurisdiction are a nullity. The ‘Classicus locus” ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 60 of 103

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on this fundamental legal principle remains the decision of the Court of Appeal in the celebrated case of: “Owners of the Motor Vessel ‘Lillian S’ – Versus – Caltex Oil (Kenya) Limited [1989] KLR 1,” where Nyarangi, JA, held that jurisdiction is everything and that, without it, a Court has no power to make one more step. The Learned Judge in the said case expressed himself in the following memorable terms: “Jurisdiction is everything. Without it, a court has no power to make one more step. Where a court has no jurisdiction, there would be no basis for a continuation of proceedings pending other evidence. A court of law downs tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.” 57. Nonetheless, I strongly defer with the assertion by the 1 st Defendant and hold that the Court is well clothed with the jurisdiction to entertain the matter for the following reasons. Firstly, this Court is a creature of the Constitution of kenya, 2010. Its jurisdiction is constitutionally established under the provision of Article 162(2)(b) of the Constitution of Kenya, 2010, which provides for the establishment of Courts with the ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 61 of 103

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status of the High Court to hear and determine disputes relating to the environment and the use and occupation of, and title to, land. Pursuant to Article 162 (3) thereof, Parliament enacted the Environment and Land Court Act, No. 19 of 2011. 58. The jurisdiction of this Court is further elaborated under the provision of Section 13 (1) of the Environment and Land Court Act, which provides that this Court shall have original and appellate jurisdiction to hear and determine all disputes in accordance with Article 162(2)(b) of the Constitution and with the provisions of the Act or any other applicable law relating to the environment and land. 59. More particularly, the provision of Section 13 (2) of the Environment and Land Court Act clothes this Court with jurisdiction to determine disputes relating to, inter alia, environmental planning and protection, climate issues, land use planning, title, tenure, boundaries, rates, rents, valuations, mining, minerals and other natural resources, compulsory acquisition of land, land administration and management, public, private and community land and ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 62 of 103

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contracts, choses in action or other instruments granting any enforceable interests in land. 60. Additionally, the jurisdiction of this Honourable Court over disputes arising from the realization of interests in land is further reinforced by the provision of Section 101 of the Land Registration Act, No. 3 of 2012 and Section 150 of the Land Act, No. 6 of 2012 and, which provides that the Environment and Land Court established under the Environment and Land Court Act shall have jurisdiction to hear and determine disputes, actions and proceedings concerning land under the Act. 61. Secondly, as indicated above, I hold that the legal position based on the argument that the Court lacks jurisdiction based on the “Doctrine of the Pre – Dorminant Purpose Test” is not applicable to this case. The 1 st Defendant has contended, in substance, that the dispute is fundamentally commercial in nature and arises from the enforcement of contractual and financial obligations, the fact that land was offered as security notwithstanding. This Court agrees with the general proposition that the mere mention or involvement of land in a ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 63 of 103

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commercial transaction does not, automatically and without more, confer jurisdiction upon the Environment and Land Court. 62. Indeed, Kenyan jurisprudence has consistently emphasized that the Court must ascertain the true nature, substance and gravamen of the dispute rather than merely rely on the manner in which the pleadings have been couched. At this very early stage, I wish to distinguish this argument by drawing attention of the parties, in particular the 1 st Defendant, to the binding decision of the Court of Appeal in the now famous case on this aspect of:- “Co - operative Bank of Kenya Limited – Versus - Patrick Kangethe Njuguna & 5 Others (2017) KECA 79 (KLR)”, wherein the Learned Judges of Appeal held that the jurisdiction of this Court to deal with disputes relating to contracts under Section 13 of the Environment and Land Court Act ought to be understood within the context of the Court’s jurisdiction to deal with disputes connected to the “use” of land; that such contracts ought to be incidental to the “use” of land; and that they do ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 64 of 103

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not include mortgages, charges, collection of dues and rents, which fall within the civil jurisdiction of the High Court. 63. Further reliance was placed on the more recent decision of the Court of Appeal sitting at Mombasa in the case of: “Bank of Africa Kenya Limited & Another – Versus - TSS Investment Limited & 2 Others (Civil Appeal No. E055 of 2022) (2024) KECA 410 (KLR)”, delivered on 26th April, 2024, which re - affirmed that this Court only has jurisdiction to deal with disputes connected to the “use” of land and contracts incidental thereto, which do not include mortgages and charges, and that a charge is a disposition that has no direct contractual relation to the “use” of a chargor’s land. Certainly, from the facts of this case, the issue of the legal ownership and such related matters on the use, title and occupation of the suit land are at stake in the instant case. Therefore, I hold that, this Honourable Court is fully conscious that jurisdiction is the bedrock upon which the authority of a Court to entertain and determine a dispute rests. 64. The Court of Appeal has considered this question in disputes arising from commercial transactions in which land was ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 65 of 103

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charged or otherwise offered as security, including in the cases of: “Diamond Trust Bank Kenya Limited (Supra)” and “Registered Trustees; Kenya Ports Authority Pension Scheme – Versus – Bwana [2023] KECA 772 (KLR).” 65. Furthermore, the question, therefore, is not simply whether the parties entered into a commercial or lending transaction. Rather, the Court must interrogate whether the dispute before it substantially concerns the use, occupation, title to, disposition or realization of an interest in land under the applicable land statutes. 66. Applying this legal test to the instant matter, this Court notes that the Plaintiff is not merely seeking an account of the outstanding debt or challenging the computation of interest under a commercial facility. The Plaintiff has directly challenged the process by which the 1st Defendant allegedly exercised its statutory power of sale over the suit property. 67. Finally, the issues raised include whether the notices contemplated under the provision of Sections 90 and 96 of the Land Act, No. 6 of 2012 were issued and duly served; whether the statutory power of sale lawfully crystallized; ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 66 of 103

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whether the conducted; subsequent whether the auction 1st process Defendant was lawfully discharged the statutory duty of care imposed under the provision of Section 97 of the Land Act; and whether the suit property may lawfully be transferred and registered in favour of the alleged purchaser, Homenet Limited. 68. These are, in the considered view of this Court, matters which arise directly from the statutory framework governing charges and the exercise of the statutory power of sale over land. The dispute goes beyond the ordinary enforcement of a commercial obligation and extends to the lawfulness of the proposed or completed disposition of an interest in immovable property. 69. The Supreme Court, in the case of: “Republic – Versus – Karisa Chengo & 2 Others [2017] eKLR, ” emphasized that the Courts established under Article 162(2) of the Constitution derive their jurisdiction from the Constitution and the statutes establishing them. Each Court must therefore exercise jurisdiction over the matters specifically assigned to it by the Constitution and the relevant legislation. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 67 of 103

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70. For the foregoing reasons, this Court finds and holds that the gravamen of the dispute before it concerns the alleged exercise of statutory remedies under the Land Act and the consequential disposition and registration of an interest in the suit property. The dispute therefore falls within the jurisdiction expressly conferred upon this Court under the provision of Article 162(2)(b) of the Constitution, Section 13 of the Environment and Land Court Act, No. 19 of 2011, Section 101 of Land registration Act, No. 3 of 2012 and Section 150 of the Land Act, No. 6 of 2012. 71. Accordingly, this Honourable Court finds and holds that it has the requisite jurisdiction to hear and determine the dispute and the two applications presently before it. ISSUE No. b). Whether Homenet Limited has satisfied the legal threshold to be joined in these proceedings as an Interested Party; 72. Under this Sub – heading, the Honourable Court shall be examining whether Homenet Limited ought to be joined in these proceedings as an Interested Party. The Applicant’s case is that it participated in the alleged public auction ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 68 of 103

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concerning the suit property, emerged as the successful purchaser and entered into a Memorandum of Sale. It contends that the orders sought in the suit and in the Plaintiff’s application are likely to directly affect its interest. 73. On the issue of joinder, The Black’s Law Dictionary defines “Interested Party” as:“A party who has a recognizable stake (and therefore standing) in a matter.” 74. The stating point on the joinder is Order 1 Rule 10 (2) of the Civil Procedure Rules, 2010, which states as follows:“The court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the court to be just, order …that the name of any person who ought to have been joined, whether as Plaintiff or defendant, or whose necessary in order presence to enable before the the court court may effectually be and completely to adjudicate upon and settle all questions involved in the suit, be added.” [Emphasis mine] 75. This provision empowers the Court, at any stage of the proceedings, to order that the name of any person who ought to have been joined, or whose presence before the Court may be ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 69 of 103

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necessary to enable the Court effectually and completely adjudicate upon and settle all questions involved in the suit, be added. The discretion is wide but must be exercised judiciously. 76. This statutory discretion is reinforced by the provision of Article 159 (2)(b) and (d) of the Constitution of Kenya, 2010, which obliges courts to ensure justice is not delayed and to administer justice without undue regard to procedural technicalities. Thus, the Constitution elevates substantive justice above rigid adherence to form, ensuring that courts are not constrained by technical omissions when the real issues in controversy demand full participation of all necessary parties. 77. With the passage of time, the High Court has expansively deliberated on this jurisprudence. Hence, this Court will not be re – inventing the wheel. It will proceed to make reference to just but a few of the precedents. To begin with, the case of:- “Kingori – Versus - Chege & 3 Others [2002] 2 KLR 243 ” the court provided the following guiding principles for joinder of a party to a suit: a. He must be a necessary party. b. He must be a proper party. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 70 of 103

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c. In the case of the Defendant there must be a relief flowing from that Defendant to the Plaintiff. d. The ultimate order or decree cannot be enforced without his presence in the matter. e. His presence is necessary to enable the Court effectively and completely adjudicate upon and settle all questions involved in the suit. 78. Similarly, in the case of:- “Meme – Versus - Republic, [2004] 1 EA 124”, the High Court observed that a party could be enjoined in a matter for the reasons that:i. Joinder of a person because his presence will result in the complete settlement of all the question involved in the proceedings; ii. Joinder to provide protection for the rights of a party who would otherwise be adversely affected in law; iii. Joinder to prevent a likely course of proliferated litigation. 79. Further, in the case of:- “Departed Asians Property Custodian Board – Versus - Jaffer Brothers Limited [1999] 1 EA 55”, the Court held that:“A clear distinction is called for between joining a party who ought to have been joined as a defendant and one ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 71 of 103

page 71 of 103

whose presence before the Court is necessary in order to enable the court effectually and completely adjudicate upon and settle all questions involved in the suit. A party may be joined in a suit, not because there is a cause of action against it, but because that party’s presence is necessary in order to enable the court effectually and completely adjudicate upon and settle all the questions involved in the cause or matter…For a person to be joined on the ground that his presence in the suit is necessary for effectual and complete settlement of all questions in the suit one of two things has to be shown. Either it has to be shown that the orders, which the Plaintiff seeks in the suit, would legally affect the interests of that person, and that it is desirable, for the avoidance of multiplicity of suits, to have such a person joined so that he is bound by the decision of the Court in that suit. Alternatively, a person qualifies, (on an application of a Defendant) to be joined as a co-defendant, where it is shown that the Defendant cannot effectually set a defence he desires to set up unless that person is joined in it, or unless the order to be made is to bind that person.” 80. Additionally, in the case of:- “Civicon Limited – Versus Kivuwatt Limited and 2 Others [2015] eKLR” the court observed as follows: ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 72 of 103

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“Again the power given under the Rules is discretionary which discretion must be exercised judicially. The objective of these Rules is to bring on record all the persons who are parties to the dispute relating to the subject matter, so that the dispute may be determined in their presence at the time without any protraction, or inconvenience and to avoid multiplicity of proceedings. Thus, any party reasonably affected by the pending litigation is a necessary and proper party, and should be enjoined…from the foregoing, it may be concluded that being a discretionary order, the court may allow the joinder of a party as a defendant in a suit based on the general principles set out in Order I rule 10 (2) bearing in mind the unique circumstances of each case with regard to the necessity of the party in the determination of the subject matter of the suit, any direct prejudice likely to be suffered by the party and the practicability of the execution of the order sought in the suit, in the event that the plaintiff should succeed. We may add that all that a party needs to do is to demonstrate sufficient interest in the suit, and the interest need not be the kind that must succeed at the end of the trial.” 81. Additionally, the principle was echoed in case of:- “Mukira & 2 Others – Versus - County Government of Nyeri [2026] KEELC ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 73 of 103

page 73 of 103

2997 (KLR)”, reiterated where that the joinder Environment is justified and where Land Court the party’s participation is essential to resolve the real issues in controversy and to avoid multiplicity of suits. Also, in the case of:- “Lalji Shivji Kerai – Versus - Municipal Council of Eldoret [2014] KEELC 488 (KLR)”, the Court held that joinder should be allowed if it enables the Court to resolve the dispute comprehensively and avoid piecemeal litigation. 82. Further, in the case of:- “Zephir Holdings Limited – Versus Mimosa Plantations Limited, Jeremiah Maztagaro and Ezekiel Misango Mutisya (2014) eKLR”, the Court stated that:“A proper party is one who is impleaded in the suit and qualifies the threshold of a Plaintiff or Defendant under Order 1 Rules 1 and 2 respectively, or as a third party or as an Interested Party and whose presence is necessary or relevant for the determination of the real matter in dispute or to enable the court effectually and completely adjudicate upon and settle all questions involved in the suit.” 83. Still on this issue, the Supreme Court in the case of:“Communications Commission of Kenya & 4 Others – Versus Royal Media Services Limited & 7 others (2014) eKLR” stated: ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 74 of 103

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“An Interested Party is one who has a stake in the proceedings, though he or she was not a party to the cause ab initio. He or she is the one who will be affected by the decision of the Court when it is made either way. Such a person feels that his or her interests will not be well articulated unless he himself or she herself appears in the proceedings, and champions his or her cause. A party could be enjoined in a matter for the reason that; i. Joinder of a person because his presence will result in the complete settlement of all the questions involved in the proceedings; ii. Joinder to provide protection of the rights of a party who would otherwise the adversely affected in law; iii. Joinder to prevent a likely course of proliferated litigation. 84. On the threshold to be reached by a party seeking joinder, the holding by Muriithi J. in the case of:- “Benjamin K Kipkulei – Versus - County Government of Mombasa & Another [2015] eKLR” is useful:“….The test for joinder of a party as an interested party is not that the applicant must show a stake or interest that must prevail in the suit, as that is not possible before the full hearing ELCLC E006 of 2026 of the matter; the HON. JUSTICE L.L NAIKUINI applicant should Page 75 of 103

page 75 of 103

demonstrate a legal interest that calls for hearing before a decision on the dispute before the court is adjudicated. In common judicial parlance, I would say that the applicant ought to show on ‘an arguable case’ basis that he has an interest recognized in the law and capable of protection….” 85. The above principles are supplemented by the guiding considerations enunciated in the case of “ Kingori – Versus – Chege (Supra)”, to the effect that the applicant must be a necessary and proper party whose presence is necessary to enable the Court to effectively and completely adjudicate upon and settle all questions involved in the suit. Distilled to their essence, therefore, the applicable considerations are threefold: first, an identifiable and proximate stake or interest in the subject matter of the proceedings; secondly, demonstrable prejudice to be suffered in the event of nonjoinder; and thirdly, the relevance and non-replicative character of the case the intended interested party intends to advance. 86. The Court now proceeds to apply the above tripartite test to the circumstances of the instant application. The above principles may, for purposes of the instant application, be ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 76 of 103

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distilled into three principal considerations. Firstly, whether Homenet Limited has demonstrated an identifiable and proximate stake or interest in the subject matter of the proceedings; secondly, whether it is likely to suffer prejudice if it is not joined; and thirdly, whether its intended participation will be relevant and useful to the Court without merely duplicating the case of the existing parties. 87. Turning to the first limb of an identifiable and proximate interest, Homenet Limited has asserted that it participated in the alleged public auction concerning the suit property, emerged as the successful bidder and entered into a Memorandum of Sale. The very transaction from which it claims an interest is one of the central matters challenged by the Plaintiff in these proceedings. 88. The Plaintiff has argued that Homenet Limited has not demonstrated a perfected proprietary interest because the suit property has not been transferred and registered in its name. This Court agrees that the extent and validity of the interest claimed by Homenet Limited remain matters that may require determination at the full hearing. However, the ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 77 of 103

page 77 of 103

absence of a completed registration does not, in itself, render the Applicant a stranger to a suit whose express purpose includes challenging the legality of the auction and restraining the completion of the transaction from which the Applicant claims its interest. 89. At the joinder stage, this Court is not called upon to make a conclusive determination as to whether Homenet Limited lawfully acquired the rights it claims. To require the Applicant to conclusively establish the validity of its alleged purchase before being joined would amount to determining, at an interlocutory stage, one of the substantive controversies which the main suit itself seeks to resolve. 90. The relevant question is whether the Applicant has established an arguable and legally recognizable interest capable of being affected by the decision of this Court. In the case of: “Benjamin K. Kipkulei – Versus – County Government of Mombasa & Another [2015] eKLR,” the Court held that the test for joinder is not whether the Applicant has established an interest that must necessarily prevail at the end of the suit, but whether the Applicant has demonstrated an arguable ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 78 of 103

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legal interest that calls for hearing before the dispute is finally determined. 91. In the instant case, this Court finds that Homenet Limited has demonstrated such an interest. If the Court were to ultimately uphold the statutory realization process and the alleged auction, such a determination would directly concern the interest asserted by Homenet Limited. Conversely, if the Court were to find that the process was unlawful and proceed to invalidate or interfere with the transaction, Homenet Limited’s alleged interest would equally be directly affected. 92. On the second limb concerning prejudice, the Court notes that the Plaintiff expressly seeks orders capable of preventing the completion, transfer and registration of the suit property in favour of Homenet Limited. A determination concerning the validity of the alleged sale without affording the alleged purchaser an opportunity to be heard would undoubtedly expose that party to direct legal prejudice. 93. The right to be heard before a decision adversely affecting a person’s legally recognizable interests is made is a cardinal principle of natural justice. It is equally reflected in the ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 79 of 103

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constitutional guarantee under the provision of Article 50(1) of the Constitution of Kenya, 2010, which provides that every person has the right to have any dispute that can be resolved by the application of law decided in a fair and public hearing before a Court or, if appropriate, another independent and impartial tribunal or body. 94. The well-known principle of “Audi Alteram Partem,” literally meaning that no person should be condemned unheard, is therefore directly applicable. If the Plaintiff’s prayers concerning the alleged sale and intended transfer are determined without the participation of the party claiming to be the successful purchaser, the Court risks rendering a decision affecting that party’s asserted interest without according it an opportunity to place its case before the Court. 95. On the third limb concerning the relevance and distinctiveness of the Applicant’s intended case, the Court finds that Homenet Limited is not seeking joinder merely to support the 1st Defendant’s case. Its asserted position is based on its alleged participation in the auction and the ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 80 of 103

page 80 of 103

independent interest it claims to have acquired as a result thereof. 96. Homenet Limited may therefore advance matters concerning, inter alia, its participation in the auction, the Memorandum of Sale, the circumstances under which it claims to have emerged as the successful purchaser and the prejudice it may suffer should the transaction be invalidated. These matters are directly relevant to the dispute and cannot necessarily be articulated with the same degree of particularity by either the Plaintiff or the 1st Defendant. 97. The Court has also considered the Plaintiff’s contention that the joinder of Homenet Limited will mutate or fundamentally alter the Plaintiff’s cause of action. With tremendous respect, this Court is unable to agree with that proposition. The Plaintiff’s cause of action remains anchored upon its challenge to the exercise of the statutory power of sale and the consequential disposition of the suit property. The joinder merely brings before the Court a party claiming an interest arising from the very transaction under challenge. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 81 of 103

page 81 of 103

98. The joinder of Homenet Limited will, in fact, advance the overriding objective of the law. Under the provisions of Sections 1A and 1B of the Civil Procedure Act, Cap. 21, and Section 3 of the Environment & Land Court Act, No. 19 of 2011 the Court is required to facilitate the just, expeditious, proportionate and affordable resolution of civil disputes. 99. Further, the provision of Article 159 (2)(d) of the Constitution requires justice to be administered without undue regard to procedural technicalities. The joinder of a person whose interest may be directly affected by the ultimate judgment accords with the constitutional imperative of substantive justice and reduces the likelihood of subsequent and multiplicity of proceedings over the same transaction and subject matter. 100. The Court is alive to the fact that joinder is discretionary and is not automatic. However, the discretion must be exercised judiciously and in a manner that facilitates the complete and conclusive determination of the real issues in controversy. In the peculiar circumstances of this case, this Court is ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 82 of 103

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persuaded that Homenet Limited is a proper and necessary participant in the litigation. 101. The upshot of the foregoing analysis is that Homenet Limited has demonstrated an identifiable and proximate interest in the subject matter of the proceedings, has established the likelihood of prejudice should the matter proceed without its participation and has demonstrated that the case it intends to advance is relevant and distinct from that of the existing parties. 102. Accordingly, this Honourable Court finds and holds that the Notice of Motion application dated 9 th April, 2026 by Homenet Limited is merited. For the avoidance of doubt, however, the joinder of Homenet Limited as an Interested Party does not amount to a finding that its alleged purchase was lawful or that it has acquired a perfected proprietary interest in the suit property. Those questions remain live issues for determination upon the hearing of the substantive suit and upon adducing of “Viva Voce” evidence. ISSUE No. c) Whether the principles for ELCLC E006 of 2026 Plaintiff the has grant satisfied of HON. JUSTICE L.L NAIKUINI the the legal interlocutory Page 83 of 103

page 83 of 103

injunctive and preservatory orders sought in the Notice of Motion application dated 5 th February, 2026; 103. The Plaintiff seeks interlocutory orders intended to restrain the further transfer, registration, alienation or completion of the disposition of the suit property pending the hearing and determination of the main suit. The applicable principles governing the grant of a temporary injunction are now well settled in Kenyan jurisprudence. 104. There are two types of injunction (temporary) and mandatory. The orders – Interim granting of interim injunctive orders are governed under the provision of Order 40 Rules, 1, 2 & 3 of the Civil Procedure Rules, 2010. It provides as follows:1.Where in any suit it is proved by affidavit or otherwise— a. That any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 84 of 103

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b.…the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further orders. 105. The starting point is the celebrated and “Classicus Locus” case of: “Giella – Versus – Cassman Brown (Supra),” where the Court laid down the three cardinal principles that an Applicant must establish before the grant of an interlocutory injunction, namely: a) That the Applicant has established a prima facie case with a probability of success; b) That the Applicant stands to suffer irreparable injury which would not adequately be compensated by an award of damages; and c) If the Court is in doubt, the application should be determined on a balance of convenience. 106. The Court of Appeal subsequently elaborated on the sequential nature of these principles in the case of: “Nguruman Limited – Versus – Jan Bonde Nielsen & 2 Others ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 85 of 103

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[2014] eKLR.” The Court held that the three conditions are sequential hurdles and that an Applicant must first establish a prima facie case before the Court proceeds to consider the question of irreparable injury and, if necessary, the balance of convenience. 107. The meaning of “a prima facie case” was authoritatively explained by the Court of Appeal in the case of: “Mrao Limited – Versus – First American Bank of Kenya Limited (Supra)” where the Court stated: “A prima facie case in a civil application includes but is not confined to a ‘genuine and arguable case’. It is a case which, on the material presented to the court, a conclude tribunal that properly there exists directing itself will a which has right apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter.” 108. Applying the first limb of the Giella principles to the instant case, the gravamen of the Plaintiff’s complaint is that the 1st Defendant unlawfully exercised its statutory power of sale over the suit property. The Plaintiff specifically denies having ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 86 of 103

page 86 of 103

been served with the mandatory statutory notices and further challenges the legality of the subsequent auction and the proposed transfer of the suit property. 109. The starting point is the provision of Section 90 (1) of the Land Act, No. 6 of 2012, which provides that where a Chargor is in default of any obligation and continues to be in default for one month, the chargee may serve upon the chargor a notice in writing requiring the chargor to pay the money owing or to perform and observe the agreement. 110. The provision of Section 90(2) of the Land Act further prescribes the mandatory contents of such notice. The notice must adequately inform the Chargor of the nature and extent of the default, the amount that must be paid to rectify the default, the period within which the default must be remedied and the consequences of failing to comply with the notice. 111. The statutory notice issued under Section 90 of the Land Act is not a mere procedural formality. It is a substantive safeguard designed to ensure that a Chargor is fully informed of the default and afforded a lawful opportunity to ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 87 of 103

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remedy the breach before the drastic remedy of sale of the charged property is undertaken. 112. Upon the expiry of the notice contemplated under the provision of Section 90, the Chargee may proceed in accordance with Section 96 of the Land Act. However, under the provision of Section 96 (2), the Chargee is required to serve the Chargor with a notice to sell in the prescribed form and is prohibited from completing any contract for the sale of the charged land until at least forty (40) days have elapsed from the date of service of the said notice. 113. The requirement of service of statutory notices has received judicial consideration in numerous decisions. In the case of: “Nyagilo Ochieng & Another – Versus – Fanuel B. Ochieng & 2 Others [1995–1998] 2 EA 260,” the Court held that where service of the requisite statutory notice is denied, the burden rests upon the party asserting service to demonstrate that the notice was indeed served. 114. Similarly, the Court in: “Jamber Enterprises Limited – Versus – NIC Bank Kenya Plc & Another [2019] eKLR,” considered the nature of the evidentiary burden imposed upon a Chargee ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 88 of 103

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where a Chargor disputes service of statutory notices. The issue is whether sufficient evidence has been placed before the Court demonstrating compliance with the applicable statutory requirements and the agreed mode of service. 115. In the instant case, the Plaintiff has denied receiving the statutory notices, redemption notices, notification of sale and notice of the alleged public auction. The 1 st Defendant has, conversely, maintained that all the requisite notices were issued and dispatched in accordance with the law and the relevant security documents. 116. These competing positions raise substantial factual controversies concerning the issuance, service, contents and legal sufficiency of the notices. At this interlocutory stage, the Court is required to avoid conducting a mini-trial or making final findings on contested matters of fact which are properly reserved for intensive interrogation during the substantive hearing. 117. The role of the Court at this stage is therefore to determine whether, on the material presently before it, the Plaintiff has demonstrated an apparent infringement of a legal right ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 89 of 103

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sufficient to call for an explanation or rebuttal and whether the subject matter should consequently be preserved pending a final determination of the dispute. 118. This Court finds that the Plaintiff’s categorical denial of service, when considered together with the broader challenge to the statutory realization process, raises a genuine and substantial controversy requiring investigation at the trial. This finding should not be misconstrued as a final determination that the statutory notices were not served. The issue remains contested and must be determined upon the production and interrogation of the evidence at the full hearing. 119. The Plaintiff has also challenged the alleged sale price of the suit property. This brings into operation the provision of Section 97 of the Land Act, which imposes upon a Chargee exercising the Statutory Power of Sale a duty of care to obtain the best price reasonably obtainable at the time of sale. 120. The provision of Section 97 (1) of the Land Act provides that a Chargee who exercises the power of sale owes a duty of ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 90 of 103

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care to the Chargor, any subsequent Chargee and any other person with an interest in the charged land to obtain the best price reasonably obtainable at the time of sale. 121. Further, under the provision of Section 97 (2) of the Land Act, a Chargee is required, before exercising the right of sale, to ensure that a forced sale valuation is undertaken by a qualified valuer. The purpose of this statutory obligation is to guard against the arbitrary sacrifice or disposal of charged property at an unjustifiable undervalue. 122. The Court has considered the decisions in the case of: “Palmy Company Limited – Versus – Consolidated Bank of Kenya Limited [2014] eKLR” and “Kioleken Ole Kiplonka Orumoi – Versus – Mellech Engineering and Construction Limited [2015] eKLR,” in which the Courts emphasized the importance of compliance with the statutory duty imposed under Section 97 of the Land Act and the obligation of a Chargee to obtain the best price reasonably obtainable. 123. The Plaintiff has placed before the Court a valuation report dated 20th May, 2026, indicating a market value of Kenya Shillings One Forty Eight Million (Kshs. 148,000,000.00/=) ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 91 of 103

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and a forced sale value of Kenya Shillings One Eleven Million (Kshs. 111,000,000.00/=). The Plaintiff contrasts these figures with the alleged auction sale price of Kenya Shillings Thirty Eight Million, Three Hundred and Fifty Thousand (Kshs. 38,350,000.00/=). 124. This Court is alive to the fact that the mere existence of a valuation report indicating a value higher than an alleged sale price does not automatically establish a breach of Section 97 of the Land Act. Valuations may differ depending on the valuation date, methodology, market conditions and the particular assumptions employed by the respective valuers. 125. Nonetheless, where there is a substantial disparity between the value asserted by a party and the alleged sale price and where the legality of the realization process is independently contested, the Court must carefully interrogate whether the statutory duty of care was discharged. Such an inquiry is particularly necessary where the Plaintiff’s complaint is not based on valuation alone but forms part of a wider challenge ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 92 of 103

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concerning statutory notices, the conduct of the auction and the alleged disposition of the suit property. 126. Having considered the totality of the material presently before it, this Court is satisfied that the Plaintiff has established “a prima facie case” with a probability of success within the meaning assigned to that phrase in the case of:“Mrao Limited – Versus – First American Bank of Kenya Limited” 127. The Court now turns to the second limb, namely whether the Plaintiff is likely to suffer irreparable injury incapable of adequate compensation by an award of damages. The Plaintiff’s case is that unless the Court intervenes, the transfer and registration of the suit property in favour of Homenet Limited may be completed before the legality of the statutory realization process is determined. 128. The 1st Defendant has argued that the suit property was voluntarily offered as security and that any loss suffered by the Plaintiff is capable of being quantified and compensated by damages. It is indeed correct that a Chargor who voluntarily offers property as security must reasonably ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 93 of 103

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contemplate the possibility of realization in the event of default. 129. However, the fact that property has been offered as security does not grant a Chargee a licence to dispense with the mandatory safeguards established by statute. The exercise of the statutory power of sale remains subject to strict compliance with the applicable provisions of the Land Act and the rules governing realization of charged property. 130. In the case of: “Joseph Okoth Waudi – Versus – National Bank of Kenya Limited [2006] eKLR,” the Court recognized that the statutory power of sale is not exercised in a vacuum and remains subject to the procedural and substantive safeguards established by the law. 131. The crucial consideration in this matter is not merely that the suit property has an ascertainable monetary value. The Plaintiff alleges that its proprietary interest is being disposed of through a process which it asserts is unlawful. The Court must therefore consider whether completion of the impugned transaction before the hearing of the suit may ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 94 of 103

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fundamentally alter the subject matter and render the eventual decision of the Court difficult to implement. 132. Once the suit property is transferred and registered in favour of another party, the legal and factual circumstances may substantially change. Questions may thereafter arise regarding the nature of the purchaser’s rights and interests and the statutory consequences flowing from the completed transaction. The Court may consequently be required to determine a substantially different dispute from the one presently before it. 133. The equitable purpose of an interlocutory injunction includes the preservation of the substratum of the litigation pending the final determination of the rights of the parties. In the case of: “Films Rover International Limited – Versus – Cannon Film Sales Limited [1986] 3 All ER 772,” a principle which has found acceptance in Kenyan jurisprudence, the Court stated that, where appropriate, the Court should adopt the course which appears to carry the lower risk of injustice should it later turn out to have been wrong. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 95 of 103

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134. In the peculiar circumstances of this case, this Honourable Court finds that the completion and registration of the impugned transaction before the determination of the substantive suit may materially alter the substratum of the proceedings. Therefore, the Court is persuaded that the Plaintiff has demonstrated a real risk of injury which, in the circumstances, may not be adequately remedied by damages alone. 135. Having found that the Plaintiff has satisfied the first and second limbs of the Giella principles, it is not strictly necessary to consider the balance of convenience. Nevertheless, and in the event that this Court were to be found to be in doubt on either of the preceding limbs, the balance of convenience would still favour the preservation of the suit property. 136. The Plaintiff seeks to preserve the prevailing position pending the hearing and determination of the substantive suit. The 1st Defendant and Homenet Limited, on the other hand, seek to proceed with or benefit from a transaction ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 96 of 103

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whose legality and consequences are directly in controversy before the Court. 137. The course carrying the least risk of injustice is, therefore, to preserve the suit property until the Court has had the benefit of hearing all the parties and considering the evidence “Viva Voce.” Such preservation does not determine the dispute in favour of the Plaintiff, nor does it extinguish the rights claimed by the 1st Defendant or Homenet Limited. It merely maintains the substratum of the suit so that the ultimate judgment will not be rendered nugatory. 138. The Court is further guided by the overriding objective under Sections 1A and 1B of the Civil Procedure Act, Cap 21 and Section 3 of the Environment & Land Court Act, No. 19 of 2011 and the constitutional obligation under Article 159(2) (d) of the Constitution. The preservation of the suit property, in the circumstances of this case, will facilitate the just, proportionate and effective determination of the real questions in controversy. 139. The upshot of the foregoing analysis is that the Plaintiff has satisfied the legal threshold for the grant of interlocutory ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 97 of 103

page 97 of 103

preservatory orders. I therefore discern that the Notice of Motion application dated 5th February, 2026 is merited to the extent necessary to preserve the suit property pending the hearing and determination of the main suit. ISSUE No. d). Who should bear the costs of the two applications. 140. It is well established that the issue of costs is at the discretion of the Court. Costs mean the award that a party is granted at the conclusion of a legal action or proceedings in any litigation. The provision of Section 27(1) of the Civil Procedure Act, Cap. 21 establishes the general principle that costs follow the event unless the Court, for good reason, orders otherwise. By the event it means the results or outcome of the legal action. 141. Further, the provision of Section 27 (2) of the Act, provides:“The Court or Judge may give interest on costs at any rate not exceeding fourteen per cent per annum, and such interest shall be added to the costs and shall be recoverable as such.” 142. This provision empowers the Court not only to award costs but also to grant interest on those costs, subject to a ceiling ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 98 of 103

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of 14% per annum. It is a recognition that costs are not merely compensatory but also restorative, ensuring that a successful litigant is not disadvantaged by the time taken to recover expenses incurred in litigation. 143. In the case of:- “Jasbir Singh Rai & 3 others – Versus Tarlochan Singh Rai & 4 others [Supra]”, where the Supreme Court emphasized that costs are a natural consequence of litigation and should ordinarily be borne by the party whose conduct necessitated judicial intervention. 144. The Applicants in the respective applications have achieved interlocutory success. Homenet Limited has succeeded in establishing that it ought to be joined to the proceedings, while the Plaintiff has succeeded in establishing that the suit property ought to be preserved pending the determination of the substantive dispute. 145. However, none of these determinations resolves the ultimate questions in the suit. The legality of the statutory power of sale, the adequacy and service of the statutory notices, the validity of the alleged public auction, the extent of the interest claimed by Homenet Limited and the final rights of ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 99 of 103

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the parties remain matters for determination at the full hearing. 146. In these circumstances, and bearing in mind that the applications are interlocutory and the substantive suit remains pending, this Court finds it just, fair and reasonable that the costs of the two ( 2 ) applications dated 5 th February, 2026 and 9th April, 2026 respectively do abide the outcome of the main suit. VIII. Conclusion and Disposition 147. Ultimately, having conducted an elaborate, in-depth and analytical review of the framed issues herein, this Honourable Court based on the Principeles of Preponderance of Probabilities and the balance of Convenience, finds that it possesses jurisdiction to hear and determine the dispute; that Homenet Limited has satisfied the legal threshold for joinder as an Interested Party; and that the Plaintiff has established the necessary threshold for the grant of interlocutory preservatory orders pending the hearing and determination of the substantive suit. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 100 of 103

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148. Consequently, and for the avoidance of any doubt, this Honourable Court proceeds to make the following orders: a) THAT this Honourable Court be and is hereby found to have jurisdiction to hear and determine the suit and the applications herein; b) THAT the Notice of Motion application dated 5th February, 2026 by the Plaintiff be and is hereby allowed to the extent that, pending the hearing and determination of the main suit, the 1st Defendant, its servants, agents, employees and/or any other persons acting under its instructions be and are hereby registering, restrained charging, from transferring, selling, alienating, disposing of, or in any other manner completing the disposition of Land Parcel Number Kwale/Galu/Kinondo/533; c) THAT for the avoidance of doubt, the preservatory orders herein shall not be construed as a final determination on the legality or otherwise of the 1st Defendant’s exercise of its statutory power of ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 101 of 103

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sale, the validity of the alleged public auction or the rights, if any, acquired by Homenet Limited, all of which issues remain live for determination upon adducing of “Viva Voce” evidence at the full trial; d) THAT the Notice of Motion application dated 9th April, 2026 by Homenet Limited be and is hereby allowed. e) THAT Homenet Limited be and is hereby joined in these proceedings as an Interested Party; f) THAT Homenet Limited shall file and serve its pleadings WITHIN FOURTEEN (14) DAYS from the date of this Ruling, whereupon the existing parties shall be at liberty to file and serve their respective responses thereto, where necessary, WITHIN FOURTEEN (14) DAYS of such service. g) THAT for expeditious sake, there shall be a mention of the matter on 27th October, 2026 to ascertain full compliance and conducting of a final Pre – Trial Conference pursuant to the provision of ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 102 of 103

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Order 11 of the Civil Procedure Rules, 2010. Thereafter a hearing of the matter shall take place on 22nd October, 2027 before the ELC No. 1 at Kwale preferably through Physical means. h) THAT the costs of both the applications shall abide the outcome of the main suit. IT IS SO ORDERED ACCORDINGLY. RULING DELIVERED THROUGH MICROSOFT TEAM VIRTUAL MEANS, SIGNED AND DATED AT KWALE THIS……23 RD …… DAY OF ………SEPTEMBER…..…..2026. …………………………………. HON. MR. JUSTICE L. L. NAIKUNI ENVIRONMENT AND LAND COURT, AT KWALE. Ruling delivered in the presence of: a) Mr. Daniel Disii, the Court Assistant. b) Mr. Ahmed Advocate for the Plaintiff. c) Mr. Kongere Advocate for the 1st Defendant. d) Mr. Okoko Advocate for the 1st Interested Party. e) No appearance for the 2nd Interested Party. ELCLC E006 of 2026 HON. JUSTICE L.L NAIKUINI Page 103 of 103

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