Kwale Cement Factory Limited & Another v Kenya Deposit Insurance Corporation (KDIC) (As Receiver for Chase Bank (K) Limited)

Cement Factory Limited and Rising Star Commodities Limited, the 1st and 2nd Plaintiff herein be struck out in limine with costs to the Defendant herein. II. Submissions 3. Pursuant to that, while in the presence of all the parties, the Honourable Court directed as a matter of precedence that the Preliminary Objection be canvassed by way of written submissions. Hence, the Defendant filed its written submissions dated 23rd May, 2026 through the Law Firm of Messrs. Miller and Company Advocates, while the Plaintiffs filed their written submissions in opposition thereto dated 8th June, 2026 through the Law Firm of Messrs. Birir and Company Advocates. 4. I have carefully considered the said rival submissions and the authorities cited thereunder, and I proceed to summarize them hereunder. A. The Written Submissions by the Defendant 5. As already indicated, the Defendant raised its submissions based on the Honourable Court lacking Jurisdiction to deal with the matter herein. Mr. Miller Advocate commenced his submissions bye stating that the law governing a valid preliminary objection is well settled as enunciated in the locus classicus case of “Mukisa Biscuit Manufacturing Co. Ltd – Versus - West End Distributors Limited (1969) EA 696”, to the effect that a preliminary objection consisted of a pure point of law which had been pleaded, or which arose by clear implication out of the pleadings. According to the Counsel, if argued as a preliminary point, may dispose of ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 2 of

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the suit. He contended that the question of the subject – matter jurisdiction of this Court admits of a pure legal analysis on the face of the Plaint without resort to evidence or the exercise of judicial discretion, and hence the threshold was squarely satisfied. 6. On the substantive question of jurisdiction. The Learned Counsel anchored its objection on the celebrated decision of “The Owners of the Motor Vessel “Lillian S” – Versus Caltex Oil (Kenya) Limited (1989) KLR 1” on the centrality of jurisdiction, and on the constitutional architecture delineating the respective mandates of the High Court and this Court. The Defendant submitted that whereas the provision of Article 165 (3) (a) of the Constitution of Kenya, 2010 vested the High Court with unlimited original jurisdiction in criminal and civil matters, the provision of Article 162 (2) (b) thereof confined the mandate of the Environment and Land Court to disputes relating to the environment and the use and occupation of, and title to, land, as operationalized under the provision of Section 13 of the Environment and Land Court Act, No. 19 of 2011. 7. To buttress on this legal preposition, the Learned Counsel placed heavy reliance on the binding decision of the Court of Appeal in the case 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 the provision of Section 13 of the Environment and Land Court Act ought to ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 3 of

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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 not include mortgages, charges, collection of dues and rents, which fall within the civil jurisdiction of the High Court. 8. 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. 9. Critically, the Defendant emphasized that the said decision emanates from the very appellate court with supervisory jurisdiction over this Court, and was therefore binding upon it. On the same issue, the Learned Counsel also cited the persuasive decision of the Environment and Land Court at Eldoret in the case of “Kisekem Limited – Versus - National Bank of Kenya Limited (Land Case E014 of 2023) (2024) KEELC 5233 (KLR)”, where a preliminary objection on all fours with the instant one was upheld. 10. Applying “the dominant question” or “substratum” test, the Defendant submitted that the essential character of this litigation was the relationship between a bank (or its ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 4 of

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receiver) and commercial borrowers under a financing contract secured by charges over land. As far as the Defendant was environmental concerned, harm, no the Plaintiffs boundary dispute plead no and no controversy over title; and that no amount of creative pleading or framing of the Plaint in terms of land rights could transform a banking dispute into a land dispute, as Courts look to the substance of a dispute and not the labels attached by the Advocates. 11. Therefore, in conclusion, the Learned Counsel urged the Court to hold that proceeding without jurisdiction would render all the orders of this Court void ab initio, waste judicial and party resources and impede the lawful administration of the Chase Bank liquidation. He prayed that the Preliminary Objection be upheld, the Plaint dated 3rd July, 2017 be struck out forthwith, and the costs thereof be awarded to the Defendant. B. The Written Submissions by the 1st & 2nd Plaintiffs 12. While opposing the Preliminary Objection, the 1 st and 2nd Plaintiffs through their esteemed Advocates submitted accordingly. Mr. Birir Advocate, to begin with averred that the Defendant filed a very detailed Amended Counter - Claim dated 2nd October, 2017 whereby it willingly submitted to the jurisdiction of this Court. Therefore, it should estopped from now turning around to challenge the very jurisdiction it invoked. His contention was that the objection was misconceived and ill – advised in view of the said ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 5 of

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Defence and Counter - Claim, which constructively submitted to the jurisdiction of this Honourable Court. 13. The Plaintiffs further submitted that the issues in this suit were centred on matters land and those incidental thereto, which this Honourable Court has jurisdiction to deal with. 14. Nonetheless, in as much as they were not disputing the commercial aspect of the matter, but rather it would be noted that all the suit properties, being Title Numbers KWALE/SHIMONI ADJ/47, 616, 730, 762 and 766 were registered in the name of the 1 st Plaintiff and were being dealt with by the Defendant called for the intervention of this Court and not any other in the given circumstances whatsoever. The Learned Counsel argued that a commercial court has no jurisdiction to deal with the prayers sought in the Plaint, and made specific reference to prayer (b) thereof seeking a permanent injunction restraining the Defendant from selling the suit properties pursuant to the purported statutory power of sale, submitting that such a prayer can only be granted by the Environment and Land Court. 15. Additionally, the Learned Counsel contended that the mere existence transaction of a involving commercial aspect land ousted never in a the jurisdiction of the Environment and Land Court where the main and central issue concerned land rights and ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 6 of

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interests. To support this argument in law, the Learned Counsel took refuge under the provisions of Article 159 (2) (d) of the Constitution of Kenya, 2010, submitting that serious matters calling for serious consideration could not be whimsically struck out simply because they were wrongly filed in one jurisdiction, whereby the same can be transferred at the discretion of the Court to uphold substantive justice. To him these tantamounted to procedural technicalities. The Counsel posited that there was no absence of total jurisdiction and that the issue was merely which appropriate forum could determine the dispute, inviting the Court to distinguish between a court lacking total constitutional mandate and the instant case where part of the prayers ought to be dealt with by a court of equal status. 16. As such, the Learned Counsel branded the Preliminary Objection a red herring brought purposely to defeat justice and to disadvantage the Plaintiffs, who were aggrieved by the threats to sell their properties without due regard to the rule of law. 17. In conclusion, Honourable the Court Learned to Counsel dismiss the urged the Preliminary Objection with costs and let the matter proceed on for determination on its own merit. . III. Analysis and Determination 18. I have keenly considered the Notice of Preliminary Objection, the pleadings by the parties herein, the ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 7 of

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rival written authorities, submissions, the relevant the myriad of cited provisions of the Constitution of Kenya, 2010 and the law. a) For the Honourable Court to reach an informed, reasonable and just decision, it has framed the following four (4) salient issues for its determination arising therefrom. These are: b) Whether the Notice of Preliminary Objection dated 24 th April, 2026 by the Defendant meets the legal threshold of a preliminary objection based on Law and Precedents. c) Whether this Honourable Court is clothed with the requisite jurisdiction to hear and determine the suit herein. d) Depending on the outcome of Issue No. (b) above, whether the suit herein should be struck out or be transferred to the High Court, and what is the fate of the Counterclaim. e) Who will bear the costs of the Preliminary Objection and of the suit. ISSUE No. a). Whether the Notice of Preliminary Objection dated 24th April, 2026 by the Defendant meets the legal threshold of a preliminary objection based on Law and Precedents. 19. Before embarking on the analysis under this sub – heading, and although taking cognizance of the fact that Preliminary objections are mainly on issues of law and not facts, it is imperative to extrapolate on some brief facts of the case for ease of reference going forward. From the filed pleadings, the matter was initiated through a Plaint dated 3 rd July, 2017 by the Plaintiffs which were a limited liability company incorporated in the Republic of Kenya. ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 8 of

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20. The Defendant is a body corporate that was appointed as a receiver for Chase Bank Limited by the Central Bank of Kenya pursuant to the provisions of section 43(1) and (2) and 53 (1) of the Kenya Deposit Insurance Act, 2012. The 1 st Plaintiff held that at all material times was and still is the registered owner of all those properties known as TITLE NO. KWALE/SHIMONI ADJ/47, 616, 730, 762 and 766 - the suit properties. Whist, the 2 nd Plaintiff was at all material times the owner of commodities namely 42,040 bags of rice and 99 bags of Sugar Chattels. Pursuant to an Agreement dated 2 nd April, 2014, the Defendant advanced various credit facilities to the 2nd Plaintiff for purposes of financing the purchase of the aforesaid chattels. The 1 st Plaintiff offered the suit properties to the Defendant to act as securities for the loans granted by the Defendant to the 2nd Plaintiff for which a charge was registered in favour of the Defendant. Defendant was also to hold a right of lien over the 2nd Plaintiffs chattels. 21. Accordingly, it is claimed that the 2 nd Plaintiff had been making payments towards repayment of the loan facility however due to financial constraints it had delayed to make payments to the Defendant. 22. By a notification of sale dated 26 th May, 2016, the Defendant instructed the auctioneers to sell the aforesaid chattels belonging the 2nd Plaintiff. By a ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 9 of

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notification of sale dated 2nd May, 2017 the Defendant instructed Keysian Auctioneers to sell the suit properties by public auction. According to the Plaintiffs, the intended public auction of the sale of immovable properties owned by the Plaintiff was premature, an abuse of its statutory power of sale. It was tainted with grave illegalities. The Plaintiffs claimed against the Defendant is for an injunction to restrain the Defendant by itself and or agents from selling the suit properties known as TITLE NO. KWALE/SHIMONI ADJ/47, 616, 730, 762 and 766 by auction. Further, the Plaintiffs prayed for a declaration that the purported sale by auction of the suit property is in all the circumstances illegal, wrongful, null and void ab initio unless the Defendant adheres to the law. In a nutshell, the Plaintiffs prayed for Judgment against the Defendant for: a) A declaration that the purported public auction sale by the Defendants, of the 15t Plaintiff's properties known as TITLE NO. KWALE/SHIMONI ADJ/47, 616, 730, 762 and 766is illegal, null and void ab initio unless the Defendant complies with the law. b) A Permanent Injunction restraining the Defendant by itself, its 1Plaintiff's agents and/or properties KWALE/SHIMONI ADJ/47, servants from selling the known as. TITLE NO. 616, 762 and in 730, 766 pursuance of the purported Defendant's statutory power of sale. c) Costs of the suit. d) Interest on (c) above ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 10 of

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e) Any other relief that this Honourable Court may deem fit to grant. That is adequate on the brief facts. 23. Now turning to the issues under this Sub – heading. The Honourable Court notes that the main substratum of the matter is a preliminary objection by the Objector to the whole suit. For this reason, in determining this instant Notice of Preliminary Objection, the Court will first consider what amounts to a Preliminary Objection and then Juxtapose the said description herein and come up with a finding on whether what has been raised herein fits the said description. 24. According to the Black Law Dictionary “ a Preliminary Objection” is defined as:In case before the tribunal, an objection that if upheld, would render further proceeding before the tribunal impossible or unnecessary…….” 25. To start us off, the court in the now famous case of “Mukisa Biscuits Manufacturing Co Ltd (Supra)” which laid down a clear foundation on what a preliminary objection entailed as hereunder: 'So far as I am aware, a Preliminary Objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the jurisdiction of the court or a plea of limitation, or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration.' ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 11 of

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Sir Charles Newbold, JA in the same case stated that: 'A Preliminary Objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact had to be ascertained or if what is sought is the exercise of judicial discretion. The improper raising of points by way of Preliminary Objection does not nothing but unnecessarily increase costs and, on occasion, confuse the issue. The improper practice should stop.' 26. With the passage of time, High Court has extensively deliberated on this concept and hence there will be no need to re – invent the wheel. For instance in the cases of “Nitin Properties Limited – Versus - Singh Kalsi & Another [1995] eKLR” the court stated thus:'A Preliminary Objection raises a pure point of law, which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion.' 27. The Tanzanian Court of Appeal sitting in Dar es Salaam, in the case of:- “Karata Ernest & others – Versus - Attorney General (Civil Revision No 10 of 2020) [2010] TZCA 30 (29 December 2010)” , (Luanda, JA, Ramadhani, CJ, Rutakangwa, JJA), expounded the issue of preliminary objections in a more exhaustive manner as follows: “At the outset we showed that it is trite law that a point of preliminary objection cannot be raised if any ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 12 of

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fact has to be ascertained in the course of deciding it. It only "consists o f a point of law which has been pleaded, or which arises by dear implication out of the pleading obvious examples include: objection to the jurisdiction of the court; a plea of limitation; when the court has been wrongly moved either by non-citation or wrong citation of the enabling provisions of the law; where an appeal is lodged when there is no right of appeal; where an appeal is instituted without a valid notice of appeal or without leave or a certificate where one is statutorily required; where the appeal is supported by a patently incurably defective copy of the decree appealed from; etc. All these are clear pure points of law. All the same, where a taken point of objection is premised on issues of mixed facts and law that point does not deserve consideration at all as a preliminary point of objection. It ought to be argued in the "normal manner" when deliberating on the merits or otherwise of the concerned legal proceedings.’ 28. The Supreme Court addressed its mind on this issue in the case of “Aviation & Allied Workers Union Kenya – Versus - Kenya Airways Limited & 3 Others [2015] eKLR” and stated: “Thus, a Preliminary Objection may only be raised on a ‘pure question of law’. To discern such a point of law, the Court has to be satisfied that there is no proper contest as to the facts.” 29. Therefore, from the above holdings of the Courts, it is clear that a preliminary Objection must be raised on a pure point of law and no fact should be ascertained from elsewhere. See also the case of “In the matter of ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 13 of

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Siaya Resident Magistrate Court Kisumu HCCMisc. App No. 247 of 2003” where the Court held that; “A Preliminary Objection cannot be raised if any facts has to be ascertained.” 30. I have further relied on the decision of “Attorney General & Another – Versus - Andrew Mwaura Githinji & another [2016] eKLR”: - as it explicitly extrapolates in a more concise and surgical precision what tantamount to the scope, nature and meaning of a Preliminary Objection inter alia: (i) A Preliminary Objection raised a pure point of law which is argued on the assumptions that all facts pleaded by other side are correct. (ii) A Preliminary Objection cannot be raised if any fact held to be ascertained or if what is sought is the exercise of judicial discretion; and (iii) The improper raise of points by way of preliminary objection does nothing but unnecessary increase of costs and on occasion confuse issues in dispute. 31. The preliminary objection herein questions this court’s jurisdiction to handle this suit. It is well settled that jurisdiction is the backdrop against with the court is mandated to engage in determination of any matter brought before it, without it the court has no business proceeding with the matter. 32. Thus, the preliminary objection in the instant case, is founded on the notion that this court lacks jurisdiction to hear and determine this suit as the issue of monies owed and or due fall within the Civil Jurisdiction of the High Court ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 14 of

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(Commercial and Tax Division) by dint of Article 165 of the Constitution of Kenya. The issue of jurisdiction is an issue of law and as such the preliminary objection is properly raised. ISSUE No. b). Whether this Honourable Court is clothed with the requisite jurisdiction to hear and determine the suit herein. 33. Under this sub – heading, the significance of jurisdiction to any judicial proceeding cannot be gainsaid. Jurisdiction is the fountain from which the exercise of all judicial power flows, and without it, a court of law is bereft of the power to take even a single step. The locus classicus on this point remains the decision of the Court of Appeal in the case of “Owners of Motor Vessel “Lilian S” – Versus - Caltex Oil (Kenya) Limited (Supra)” dealt with a court, jurisdiction thus: “Jurisdiction is everything. Without it, a court has no powers to make one more step. Where a court has no jurisdiction there would be no basis for a continuation of the proceedings pending other evidence. A court of law downs its tools in respect of the matter before it the moment it holds the opinion it is without jurisdiction…………where a court takes it upon itself to exercise jurisdiction which it does not possess, its decision amounts to nothing. Jurisdiction must be acquired before Judgement is given”. 16. Additionally, still on the same point, in the case of “County Government of Migori – Versus - I N B Management IT Consultant Limited (2019) ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 15 of

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eKLR” whereby court being faced with an objection regarding jurisdiction, analyzed the law and observed as follows: “10- The jurisdiction point raised by the Respondent herein clearly meets the foregone criteria being a pure point of law. That jurisdiction is everything is a well settled principle in law. My Lordship Ibrahim, JSC in Supreme court of Kenya Civil application No 11 of 2016- “Hon (Lady) Justice Kalpana H Rawal Versus Judicial Service Commission and others when in demystifying jurisdiction quoted from the decision in Supreme court of Nigeria supreme case No 11 of 2012“Ocheja Immanuel Dangama – Versus - Hon. Atoi Aidoko Aliaswan and 4 others where Walter Samuel Nkanu Onnoghen, JSC and expressed himself as follows; “......it is settled that jurisdiction is the life blood of any adjudication because a court or tribunal without jurisdiction is like an animal without blood, which means it is dead. A decision by a court or tribunal without requisite jurisdiction is a nullity dead on arrival and of no legal effect whatever that is why an issue of jurisdiction is granted and fundamental in adjudication and has to be dealt with first and foremost.....” 34. Furthermore, the Court of Appeal stated in the ase of:- “Nakuru Civil Appeal No. 119 of 2017 Public Service Commission & 2 Others – Versus - Eric Cheruiyot & 16 Others consolidated with Civil Appeal No. 139 of 2017 County Government of Embu & Another – Versus - Eric Cheruiyot & 15 Others (unreported)” in a decision ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 16 of

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rendered on 8th February, 2022 expressed itself on the doctrine of jurisdiction in general as follows: “Jurisdiction is everything, it is what gives a court or a tribunal the power, authority and legitimacy to entertain a matter before it. John Beecroft Saunders in “Words and Phrases Legally Defined”, Volume 3 at Page 113 defines court jurisdiction as follows: By jurisdiction is meant the authority which a court has to decide matters that are litigated before it or to take cognizance of the matters presented in a formal way for its decision. The limits of this authority are imposed by the statute, charter, or commission under which the court is constituted, and may be extended or restricted by the like means. If no restriction or limit is imposed the jurisdiction is said to be unlimited. A limitation may be either as to kind and nature of the actions and matters of which the particular court has cognizance, or as to the area over which the jurisdiction shall extend, or it may partake of both these characteristics. If the jurisdiction of an inferior court or tribunal (including an arbitrator) depends on the existence of a particular state of facts, the court or tribunal must inquire into the existence of the facts in order to decide whether it has jurisdiction; but, except where the court or tribunal has been given power to determine conclusively whether the facts exist. Where a court takes it upon itself to exercise a jurisdiction which it does not possess, its decision amounts to ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 17 of

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nothing. Jurisdiction must be acquired before judgment is given”. 35. Primarily, the Environment and Land Court is a creature of the Constitution of Kenya. The provision of Article 162(2)(b) of the Constitution states that this Court shall have jurisdiction over disputes relating to the environment, the use and occupation of, and title to land. In addition, the provision of Section 13 of the Environment and Land Court Act, No. 19 of 2011 expounds on the jurisdiction of this Court as follows:“(1) The 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 this Act or any other law applicable in Kenya relating to environment and land. (2) In exercise of its jurisdiction under Article 162(2)(b) of the Constitution, the Court shall have power to hear and determine disputes— (a) relating to environmental planning and protection, climate issues, land use planning, title, tenure, boundaries, rates, rents, valuations, mining, minerals and other natural resources; (b) relating to compulsory acquisition of land; (c) relating to land administration and management; (d) relating to public, private and community land and contracts, choses in action or other instruments granting any enforceable interests in land; and (e) any other dispute relating to environment and land.” 36. The precise question raised herein, being whether a dispute arising from a charge over land created as ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 18 of

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security for banking facilities falls within the jurisdiction of this Court or that of the High Court, is not novel. What is at stake here is what has come to be known in the legal parlance as “The Pre – Dorminant Purpose test”. The doctrine where there exists ‘a Mixed Grill” of legal issues has been extensively deliberated on in a plethora of cases. However, it was authoritatively settled by the Court of Appeal in the case of “Co - operative Bank of Kenya Limited – Versus - Patrick Kangethe Njuguna & 5 Others (2017) KECA 79 (KLR)”, where the Learned Judges of Appeal (Visram, Karanja & Koome, JJ.A, as they then were) held as follows: “By definition, a charge is an interest in land securing the payment of money or money’s worth or the fulfillment of any condition (see Section 2 of the Land Act). As such, it gives rise to a relationship where one person acquires rights over the land of another as security in exchange for money or money’s worth. The rights so acquired are limited to the realization of the security so advanced (see Section 80 of the Land Act). The creation of that relationship therefore, has nothing to do with use of the land (as defined above). Indeed, that relationship is simply limited to ensuring that the chargee is assured of the repayment of the money he has advanced the chargor … Furthermore, the jurisdiction of the ELC to deal with disputes relating to contracts under Section ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 19 of

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13 of the ELC Act ought to be understood within the context of the court’s jurisdiction to deal with disputes connected to ‘use’ of land as discussed herein above. Such contracts, in our view, ought to be incidental to the ‘use’ of land; they do not include mortgages, charges, collection of dues and rents which fall within the civil jurisdiction of the High Court … By parity of reasoning, the dominant issue in this case was the settlement of amounts owing from the respondents to the appellant on account of a contractual relationship of a banker and lender.” 37. The above position was emphatically reaffirmed by the Court of Appeal sitting at Mombasa – the immediate appellate forum for this Court – in the case of “Bank of Africa Kenya Limited & Another – Versus - TSS Investment Limited (Supra)” (Murgor, Laibuta & Odunga, JJ.A), where the Learned Judges of Appeal held that: “The Environment and Land Court only had jurisdiction to deal with disputes connected to ‘use’ of land and contracts incidental to the ‘use’ of land, which did not include mortgages, charges, collection of dues and rents which fell within the civil jurisdiction of the High Court. Moreover, a charge was a disposition that had no direct contractual relation to ‘use’ (by a tenant or licensee) as in the instant case, of a chargor’s land.” ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 20 of

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38. This Honourable Court is alive to “the doctrine of stare decisis” entrenched under the provision of Article 163 (7) of the Constitution and the hierarchy of our courts. The decisions of the Court of Appeal cited above are binding on this Court and it would be judicial heresy for this Court to depart therefrom. Indeed, applying the same principles, the Environment and Land Court at Eldoret in the case of “Kisekem Limited Case (Supra)” upheld a preliminary objection on grounds identical to the instant one, holding that the substratum of a suit revolving around the exercise of a bank’s statutory power of sale falls within the civil jurisdiction of the High Court and not this Court. 39. The applicable test where a dispute appears to straddle the boundary between the jurisdiction of this Court and that of the High Court is the “dominant question”, “predominant issue” or “substratum” test. The Court must look through the form of the pleadings to the substance of what is truly in contest. A dispute is not transformed into a land dispute merely because a piece of land forms part of the factual matrix. As was aptly observed by Munyao, J. (as he then was) in the case of “Lydia Nyambura Mbugua – Versus - Diamond Trust Bank Kenya Limited & Another (2018) eKLR”, in making a choice of which court to appear before, one needs to find out what the predominant issue in his case is, and if the ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 21 of

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litigant’s predominant issue touches on the use of land, or occupation of land, or a matter that affects title to land, then such issue would fall for determination before this Court. 40. Turning to the instant case and applying the above principles to the Plaint dated 3rd July, 2017 as drawn, this Honourable Court makes the following observations. First, the genesis of the relationship between the parties is a banker – customer relationship under which Chase Bank (Kenya) Limited extended credit facilities to the Plaintiffs. Secondly, the suit properties were offered as collateral to secure the repayment of those facilities by way of registered charges. Thirdly, the gravamen of the Plaintiffs’ grievance, epitomized by prayer (b) of the Plaint, is to restrain the Defendant from exercising its statutory power of sale over the suit properties. Fourthly, the Plaintiffs plead no environmental harm, no boundary dispute, no controversy over the tenure or title of the suit properties as between themselves and the Defendant, and no question of the use or occupation of land properly so called. Indeed, and most significantly, the Plaintiffs themselves candidly concede at paragraph 3 of their written submissions that they “are not disputing the commercial aspect of the matter but the manner in which the properties … are dealt with by the Defendant”. ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 22 of

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41. The inescapable conclusion is that the dominant question and the very substratum of this suit is the validity, scope and enforcement of banking securities – the charges – and the exercise by the Defendant, as receiver, of the statutory power of sale thereunder. That is a quintessentially commercial and civil dispute reserved to the unlimited original jurisdiction of the High Court under the provision of Article 165 (3) (a) of the Constitution. The land offered as collateral is merely the mechanism by which the bank secured its commercial exposure, and its existence does not transform a banking dispute into a land dispute. 42. Before concluding on this issue, this Honourable Court must now deal with the three (3) main ripostes advanced by the Plaintiffs. The first one is the argument on estoppel, being that the Defendant, by filing its detailed Amended Counter - Claim dated 2 nd October, 2017, willingly submitted to the jurisdiction of this Court and is thereby estopped from challenging it. With profound respect to Learned Counsel for the Plaintiffs, this argument is not only unfounded, baseless but also untenable in law. It is trite that jurisdiction is conferred by the Constitution and statute, and not by the consent, waiver, acquiescence, conduct or estoppel of the parties. Parties cannot, by their own conduct, confer jurisdiction upon a court which it does not possess, ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 23 of

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nor can a party be estopped from raising a question of jurisdiction, which question may be raised at any stage of the proceedings, and even on appeal. As held in “the Lillian “S” case (Supra), a question of jurisdiction once raised by a party or by a court on its own motion must be decided forthwith on the material before the court. Proceedings conducted without jurisdiction are void ab initio and cannot be cured or validated by consent, acquiescence or the passage of time. Thus, the argument on the defence of the Principle of Estoppel under the provision of Section 120 of the Evidence Act, Cap. 80 must fail. 43. The second riposte is the invocation of the provision of Article 159 (2) (d) of the Constitution on substantive justice. Again, with due respect, this argument conflates procedural technicalities with jurisdiction. The question of jurisdiction is not a mere procedural technicality; it goes to the very root and competence of the Court to entertain the proceedings at all. The provision of Article 159 (2) (d) of the Constitution is not a panacea for all manner of shortcomings, and it certainly cannot be deployed to manufacture or donate jurisdiction where the Constitution itself has withheld it. A court cannot, in the name of substantive justice, exercise a jurisdiction that it does not have, for its decision, however well – intentioned, would amount to nothing. ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 24 of

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44. The third riposte is the invitation to this Court, instead of striking out the suit, to transfer the same to the High Court in the exercise of its discretion. This Honourable Court shall revert to and determine this limb under Issue No. (c) hereunder. Suffice it at this juncture to hold, in answer to the second issue as framed, that this Honourable Court is not clothed with the requisite jurisdiction to hear and determine the suit herein, the substratum whereof is a commercial banking dispute over the enforcement of charges, which dispute falls within the exclusive preserve of the High Court under Article 165 (3) (a) of the Constitution of Kenya, 2010. 45. The long and short of the foregoing analysis is that the dispute herein, being one arising from the enforcement of charges securing commercial credit facilities, falls within the province of the unlimited original civil jurisdiction of the High Court under the provision of Article 165 (3) (a) of the Constitution of Kenya, 2010, and outside the jurisdiction of this Court as delineated under Article 162 (2) (b) of the Constitution as read with Section 13 of the Environment and Land Court Act, No. 19 of 2011. Accordingly, the second framed issue is answered in the negative. I discern strongly that this Honourable Court is not clothed with the requisite jurisdiction to hear and determine the suit herein. ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 25 of

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ISSUE No. c). Depending on the outcome of Issue No. (b) above, whether the suit herein should be struck out or be transferred to the High Court, and what is the fate of the Counter - claim. 46. Under this sub – heading, having found that this Honourable Court is devoid of jurisdiction, the next logical question is what consequential orders should follow. The Plaintiffs urged the Court to transfer the suit to the High Court rather than strike it out. The legal position on the transfer of suits filed before a court without jurisdiction is, however, well settled. In the case of “Kagenyi – Versus - Musiramo & Another (1968) EA 43”, it was held that an order for the transfer of a suit from one court to another cannot be made unless the suit was, in the first instance, instituted in a court having jurisdiction to entertain and determine it. Similarly, the Court of Appeal in the case of “Phoenix of E.A. Assurance Company Limited – Versus - S. M. Thiga t/a Newspaper Service (2019) eKLR” reiterated that a suit filed in a court devoid of jurisdiction is a nullity in law, and whatever is a nullity in law is, in the eyes of the law, nothing, and there would be nothing capable of being transferred. This Court cannot, therefore, transfer a nullity to the High Court. Certainly, and legally speaking the invitation to transfer the suit is declined. 47. As regards the Counter – Claim filed by the Defendants , this Honourable Court takes cognizance of the fact that a Counter - Claim is, for all intents ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 26 of

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and purposes, an independent and separate suit in which the Defendant is the claimant. The Amended Counter - Claim dated 2nd October, 2017 herein seeks the recovery of the monies due and owing to the Defendant from the Plaintiffs on account of the very same banker – customer relationship and credit facilities forming the substratum of the main suit. It follows, as night follows day, and by parity of reasoning, that the Counterclaim equally revolves around a commercial banking dispute over which this Court has no jurisdiction. This Court cannot approbate and reprobate by downing its tools in respect of the Plaint while retaining the Counter Claim founded on the very same substratum. Consistency and constitutional fidelity dictate that the Counter - Claim must suffer the same fate as the Plaint. 48. In the given circumstances, both parties are, however, at liberty to pursue their respective claims before the High Court, being the court clothed with the requisite jurisdiction, subject to the applicable law. ISSUE No. d). Who will bear the costs of the Preliminary Objection and of the suit. 49. It is now well established that the issue of Costs is the discretion of Courts. Costs mean the award that a party is award at the conclusion of any legal action or proceeding in any litigation process. According to the ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 27 of

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Black Law Dictionary, “Cost” is defined to mean, “the expenses of litigation, prosecution or other legal transaction especially those allowed in favour of one party against the other”. The provisions of Section 27 (1) of the Civil Procedure Act, Cap. 21 holds that Costs follow events. By the events, it means the results or outcome of any legal action or proceedings thereafter. 50. These legal principles were upheld in the Supreme Court case of: “Jasbir Rai Singh – Versus – Tarchalans Singh, (2014) eKLR” and the Court of Appeal cases of “Cecilia Karuru Ngayu – Versus – Barclays Bank of Kenya & Ano. (2016) eKLR” the Courts held:“……….the basic rule on attribution of costs is that costs follow the event…..it is well recognized that the principles costs follow the event is not to be used to penalize the losing party rather it is for compensating the successful party for the trouble taken in presenting or defending the case”. 51. In the instant matter, whereas the Defendant has succeeded on its Preliminary Objection, this Court cannot lose sight of two considerations. First, the objection has been taken close to nine (9) years after the institution of the suit, and long after the Defendant had itself filed a Statement of Defence and an Amended Counterclaim before this very Court, thereby proceedings. actively Secondly, participating the in these Defendant’s own Counterclaim has, by parity of reasoning, equally been struck out. In these peculiar circumstances, the ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 28 of

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interests of justice dictate that each party should bear its own costs of the Preliminary Objection and of the suit IV. Conclusions & Disposition 52. Ultimately, and flowing from the elaborate analysis of the framed issues hereinabove, this Honourable Court finds the Notice of Preliminary Objection dated 24 th April, 2026 by the Defendant to be merited. For the avoidance of doubt, the Court proceeds to make the following final orders: a. THAT the Notice of Preliminary Objection dated 24th April, 2026 by the Defendant be and is hereby upheld. b. THAT this Honourable Court being bereft of the requisite jurisdiction, the Plaint dated 3 rd July, 2017 by the Plaintiffs be and is hereby struck out for want of jurisdiction. c. THAT for the same reasons, the Amended Counter - Claim dated 2nd October, 2017 by the Defendant be and is hereby equally struck out for want of jurisdiction. d. THAT the parties be and are hereby granted liberty to institute their respective claims afresh before the High Court of Kenya, being the court seized of the requisite jurisdiction, subject to the applicable law. And limitation of action ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 29 of

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e. THAT for the avoidance of doubt, any interim orders subsisting in this suit be and are hereby discharged forthwith; and f. THAT each party shall bear its own costs of the Preliminary Objection and of the suit. IT IS ORDERED ACCORDINGLY. RULING DELIVERED THROUGH THE MICRO – SOFT TEAMS VIRTUAL MEANS, THIS…………28th SIGNED ………. DAY AND DATED AT KWALE OF ………... SEPTEMBER ………….2026 ……………………………… HON. MR. JUSTICE L.L NAIKUNI, ENVIRONMENT & LAND COURT AT KWALE. Ruling delivered in the presence of: a) Mr. Daniel Disii, the Court Assistant. b) Mr. Birir for the 1st & 2nd Plaintiffs. c) Mr. Kiptoo Losiamoi Advocate holding brief for Mr. Miller Advocate for the Defendant/Objector. ELCC 317A of 2021 30 HON. JUSTICE L.L NAIKUINI Page 30 of

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