Solutions General Limited v Zamani Business Park Limited

6813/3; a declaration that the Plaintiff has fulfilled all the terms of the agreement for sale dated 20 th March 2019 and is entitled to a transfer of unit Number A.1.2 (initially Unit No. A.1.1.) on first floor, Block A, Zamani Business Park; a declaration that the Plaintiff is entitled to two (2) parking bays in the suit property, among others. Contemporaneously with the plaint, the Plaintiff filed a Notice of Motion dated 11th May 2026, seeking temporary injunction restraining the Defendant from interfering with its possession of the suit property. 2. In opposition, the Defendant filed a Notice of Preliminary Objection dated 29th May 2026 which is for determination. It contends that the dispute as pleaded arises from a sale agreement which contains an arbitration clause thus by operation of Section 6(1) of the Arbitration Act, this Court is mandated to refer the dispute to arbitration. Further, that this Court lacks jurisdiction over the subject matter as the dispute is purely commercial in nature, and that the ELC L CASE NO. E196 OF 2026 Page 2 of 12 Ruling

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application and suit are incompetent as they exhibit a litany of prayers unknown to law by amalgamating mutually inconsistent and procedurally irreconcilable prayers seeking simultaneously the protection of this Court and a reference to arbitration. 3. The Preliminary objection was canvassed by way of written submissions. Submissions 4. The Defendant submits that it has met the test for a Preliminary Objection as set out in Mukisa Biscuits Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696, as it challenges the Court’s jurisdiction, since the sole issue in the suit is whether the Plaintiff is indebted to the Defendant in the sum of kshs.16,174,080/=, being the alleged outstanding balance of the purchase price under the sale agreement between the parties. It argues that the said issue does not relate to ownership, title, occupation, use, possession, ELC L CASE NO. E196 OF 2026 Page 3 of 12 Ruling

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tenure, boundaries, or any interest in land as contemplated under Article 162 (2) (b) of the Constitution and Section 13 of the Environment and Land Court Act. Further, that the proper forum, would be the Commercial and Tax Division of the High Court as the dispute is purely commercial in nature. 5. It also submits that the dispute as pleaded arises from a sale agreement whose Clause 11 is a binding arbitration clause, providing that all disputes arising from it, should be referred to arbitration, thus by dint of Section 6(1) of the Arbitration Act, the dispute should be resolved through arbitration. 6. To buttress its averments, the Defendant relied on the following decisions: Owners of the Motor Vessel “Lilian S” V Caltex Oil Kenya Ltd [1989]; Samuel Kamau Macharia & another v Kenya Commercial Bank Limited & 2 others [2012] eKLR; Korea Nyamai v Neema Parcels Limited [2021] KEHC 6029 KLR; Republic v Magistrate Court, Mombasa; Absin Synergy Limited (Interested (KLR); Parties) ELC L CASE NO. E196 OF 2026 Page 4 of 12 [2022] KEHC Ruling 10

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Masumbuko v National Bank Kenya Ltd (Environment & Land Case 113 of 2020) [2024] KEELC 5454(KLR); Co-operative Bank Of Kenya Limited v Patrick Kangethe Njuguna & 5 others [2017]KECA 79 (KLR); Pindoria & another v Patel (Environment & Land Case E031 OF 2023) [2023] KEELC 22041(KLR) (30 November 2023) (Ruling); Speaker of the National Assembly v Njenga Karume [19972] eKLR and National Bank of Kenya Ltd v Pipeplastic Samkolit (k) Ltd & another (Civil Appeal 95 of 1999)[2001]KECA 362(KLR). 7. On its part, the Plaintiff does not deny that the agreement between the parties has an arbitration clause. However, it submits that the Defendant actions, including issuing a termination notice and locking it out of the suit property without first invoking the arbitration clause meant that it abandoned the said Clause, thus it should not invoke it. It ELC L CASE NO. E196 OF 2026 Page 5 of 12 Ruling

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argues that the Defendant’s said conduct does not bar the Court from proceeding with the matter. 8. It submits that if the Court is minded to refer the matter to arbitration, then then it should stay the suit and issue orders sought in its Notice of Motion dated 11th May 2026, pending hearing and determination of the matter before an arbitrator. It also submits that the suit property is erected on LR No. 6813/3 and 6813/3 and that the suit raises ownership issues thus this Court has jurisdiction. On allegations that its prayers are ambiguous, it submits that it is an issue of fact to be determined by the Court upon hearing. Analysis and Determination 9. I have considered the instant Notice of Preliminary Objection including the respective submissions and the only issue for determination is whether this Court has jurisdiction to handle this matter and if the Preliminary Objection is merited. ELC L CASE NO. E196 OF 2026 Page 6 of 12 Ruling

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10. The Defendant’s Preliminary Objection is raised on grounds that the Court lacks jurisdiction to determine the suit because it raises purely commercial issues that are outside this Court’s jurisdiction by dint of Article 162(2) (b) of the Constitution as read with Section 13 of the Environment and Land Court Act. It insists that the dispute is pegged on a sale agreement between the parties, dated 20 th March 2019, whose Clause 11 contemplates that disputes arising from the sale of the suit property shall be referred to arbitration. 11. On its part, the Plaintiff admits to the impugned arbitration Clause in the sale agreement dated 20 th March 2019 but contends that the Defendant’s conduct in the matter, including issuing a termination notice and locking it out of the suit property without first invoking the arbitration clause meant that it abandoned the said clause, thus it should not invoke it. 12. It is settled that a Preliminary Objection must be on a pure point of law and cannot be raised if any facts have to be ELC L CASE NO. E196 OF 2026 Page 7 of 12 Ruling

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ascertained. This principle was captured in the case of Mukisa Biscuits Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696 as follows: “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”. 13. The Court will determine whether the dispute herein falls within its mandate under Article 162(2) (b) of the Constitution or whether it is a commercial dispute as alleged. Jurisdiction is everything, according to the holding in The Owners of Motor Vessel “Lillian S” v Caltex Oil (Kenya) Limited (1989) KLR 1. Similarly, in Samuel Kamau Macharia & another v Kenya Commercial Bank Limited & 2 others (2012) eKLR the Supreme Court stated thus: ELC L CASE NO. E196 OF 2026 Page 8 of 12 Ruling

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“A court’s jurisdiction flows from either the Constitution or statute or both. Thus, a court of law can only exercise jurisdiction conferred by the Constitution or any other written law. It cannot arrogate to itself jurisdiction exceeding that which was conferred upon it by law.” 14. It is not in dispute that Clause 11 of the Sale Agreement dated 20th March 2019 between the parties herein contemplates that disputes arising from the said sale would be referred to arbitration. Section 6 of the Arbitration Act, provides that: “Stay of legal proceedings(1)A court before which proceedings are brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than the time when that party enters appearance or otherwise acknowledges the claim against which the stay of proceedings is sought, stay the proceedings and refer the parties to arbitration unless it finds— (a)that the arbitration agreement is null and void, inoperative or incapable of being performed; or(b)that there is not in fact any dispute between ELC L CASE NO. E196 OF 2026 Page 9 of 12 Ruling

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the parties with regard to the matters agreed to be referred to arbitration.(2)Proceedings before the court shall not be continued after an application under subsection (1) has been made and the matter remains undetermined.(3)If the court declines to stay legal proceedings, any provision of the arbitration agreement to the effect that an award is a condition precedent to the bringing of legal proceedings in respect of any matter is of no effect in relation to those proceedings.” 15. In Geoffrey Muthiga Kabiru & 2 others v Samuel Munga Henry & 1756 others [2015] eKLR, the Court of Appeal stated that: “It is imperative that where a dispute resolution mechanism exists outside courts, the same be exhausted before the jurisdiction of the courts is invoked. Courts ought to be fora of last resort and not the first port of call the moment a storm brews…The exhaustion doctrine is a sound one and serves the purpose of ensuring that there is a ELC L CASE NO. E196 OF 2026 Page 10 of 12 Ruling

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postponement of judicial consideration of matters to ensure that a party is first of all diligent in the protection of his own interest within the mechanisms in place for resolution outside the courts. The ex parte applicants argue that this accords with article 159 of the Constitution which commands courts to encourage alternative means of dispute resolution.” 16. In the foregoing, while relying on the legal provisions cited and associating myself with the decisions quoted, I find that since there was an express clause in the impugned Sale Agreement which indicated that in case of a dispute emanating therefrom, the matter should be referred to arbitration, and will proceed to do so. Further, noting that the Defendant did not dispute that it had previously locked the Plaintiff out of the suit premises despite the existence of an arbitration clause and since the Court had granted orders of status quo, I opine that the said Orders should subsist until an arbitrator is appointed. ELC L CASE NO. E196 OF 2026 Page 11 of 12 Ruling

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17. In the foregoing, I find the instant Notice of Preliminary Objection merited and will allow it. I direct that the obtaining status quo be maintained until an arbitrator is appointed. 18. Each party to bear their own costs. DATED SIGNED AND DELIVERED AT NAIROBI THIS 7TH DAY OF OCTOBER, 2026 CHRISTINE OCHIENG JUDGE In the presence of: Ms Motari for Maina for Defendant Onindo for Plaintiff Court Assistant: Joan ELC L CASE NO. E196 OF 2026 Page 12 of 12 Ruling

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