Symon Muita Ngatia & Another v Easy Properties Limited & 4 Others

MANAGEMENT LTD…..……………………..…4TH COMPANY DEFENDANT EASY PRESTIGE (BLOCK D & E) MANAGEMENT COMPANY LTD…..……..…...……..…..…5TH DEFENDANT RULING Introduction 1. This Ruling determines the Defendants’ Notice of Preliminary Objection dated 6th July, 2026, which seeks the striking out of the Plaint on the grounds that the dispute ought to have been referred to arbitration and that the claim for transfer of the reversionary interest is premature. Background 2. The Plaintiffs instituted this suit by a Plaint dated 19 th April, 2025, suing as homeowners and representatives of the Estate Committee in a representative capacity on behalf of the registered homeowners of Easy Prestige Estate, Syokimau. They seek declarations that the open space within ELCLC E051 2025 RULING 2

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L.R. No. 12715/552 is held in trust for the homeowners and that the construction on it is unlawful and in breach of the lease covenants, permanent and mandatory injunctions to stop the construction and restore the land, specific performance of the 1st Defendant’s obligation to transfer the reversionary interest to a management entity representing the homeowners, failing which the Deputy Registrar would execute the necessary instruments and costs. They reserve a claim for general damages. 3. The Plaintiffs averred that the 1st Defendant developed Easy Prestige Estate on L.R. No. 12715/552, Syokimau, and marketed it as a gated residential community with shared amenities, including playground. They an open contended space that and the children’s homeowners purchased their units in reliance on representations that the disputed open space would remain available for their communal use. ELCLC E051 2025 RULING 3

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4. According to the Plaintiffs, the purchase price included payment for shares in the management companies and an interest in the estate’s common property. They averred that Clause 4 of the leases obligated the 1 st Defendant to transfer the reversionary interest to a management entity representing the homeowners upon the sale of all units. They maintained that the estate had been completed and fully sold more than a decade earlier, but the 1 st Defendant had neither transferred the reversionary interest nor handed over control of the management companies. 5. The Plaintiffs alleged that the 1 st Defendant had instead commenced construction on the disputed open space, thereby depriving residents of a communal amenity. They pleaded breach of the lease covenants, derogation from grant, breach of trust, misrepresentation and trespass. They also questioned compliance with planning and environmental requirements and alleged infringement of their constitutional rights. They joined the 2 nd to 5th ELCLC E051 2025 RULING 4

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Defendants as management companies through which the common property was intended to be held and managed. 6. Together with the Plaint, the Plaintiffs filed an application dated 19th April, 2025, seeking, inter alia, orders restraining construction on the disputed open space, removal of structures erected thereon, restrictions on the use of a building allegedly designated as a shopping centre, and the handover of the estate’s management office. 7. M/S Onyoni & Company Advocates came on record for all five Defendants through a Notice of Appointment of Advocates dated 9th June, 2025, and appeared for them before the Court on 10th June, 2025 for hearing of the Application. The Defendants opposed the application, contending that the Plaintiffs had no proprietary rights over the disputed open space and that the lease covenants did not prohibit the proposed development. They maintained that the necessary environmental approvals had been ELCLC E051 2025 RULING 5

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obtained and that the Plaintiffs had not established grounds for the injunctive relief sought. 8. In its ruling delivered on 25th February, 2026, the Court allowed the application in part and ordered that the status quo be maintained pending the hearing and determination of the suit. The Court declined to grant the mandatory orders sought at that interlocutory stage and directed that the costs of the application be in the cause. 9. The 1st Defendant subsequently filed a Statement of Defence and Counterclaim dated 6th July, 2026. It admitted being the developer and registered proprietor of L.R. No. 12715/552 but denied that the Plaintiffs had acquired proprietary or beneficial interests in the disputed land. It maintained that their contractual rights were confined to their respective units and the common areas appurtenant thereto. 10. The 1st Defendant further pleaded that the estate was being developed in phases and that the disputed area had been ELCLC E051 2025 RULING 6

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reserved for a clubhouse and ancillary facilities under the approved master plan. It denied that the area had been designated as a communal playground or that it had misrepresented the nature of the development to purchasers. 11. While admitting an obligation to transfer the reversionary interest eventually, the 1st Defendant contended that the obligation would arise only after all units had been sold and the leases registered. It averred that those conditions had not been fulfilled when the suit was instituted. It also relied on Clause 4(ii) of the leases, contending that the dispute ought to have been referred to arbitration before litigation. 12. In its Counterclaim, the 1st Defendant alleged that, in April, 2025, the Plaintiffs incited residents and their supporters to destroy a perimeter wall, enter the construction site and obstruct lawful development, thereby occasioning loss and damage. It sought judgment against the Plaintiffs jointly and severally for the following reliefs, in which the Plaintiffs are ELCLC E051 2025 RULING 7

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referred to as the Defendants and the 1 st Defendant as the Plaintiff: a) A declaration that the ongoing construction of the clubhouse and annex building is lawful, within the approved master plan, and does not constitute encroachment on communal property. b) A declaration that the Defendants’ demand for transfer of reversionary interest is premature and should await until all units are sold and leases registered in line with Clause vii of the lease. c) An injunction agents or restraining the Defendants, their sympathizers from interfering with, obstructing, or demolishing the Plaintiff’s lawful construction works on LR No. 12715/552. d) General damages against the Defendants for unlawful destruction of the perimeter wall and disruption of construction works as well as damages for unlawful interference with the Plaintiff’s proprietary rights. ELCLC E051 2025 RULING 8

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e) Costs of the counterclaim. f) Interest on (d) and (e) above. g) Any other just relief the court may deem just to grant. The Preliminary Objection and the Response 13. By a Notice of Preliminary Objection dated 6th July, 2026, bearing the same date as the Defence and Counterclaim, the Defendants seek the striking out of the Plaint on the following grounds: i. Lack of Jurisdiction by Virtue of Arbitration Clause: The Plaintiffs’ claims arise from and are founded upon the standard Sale Agreements and Leases executed between the 1st Defendant and the purchasers of units within Easy Prestige Estate. Clause 4(ii) of the said leases expressly provides that disputes arising therefrom shall be referred to arbitration under the Arbitration Act before any ELCLC E051 2025 RULING 9

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recourse to litigation. The present suit has been instituted in contravention of the said contractual provision, rendering it incompetent and this Honourable Court devoid of jurisdiction to entertain it. ii. Prematurity of the Suit: The Plaintiffs’ demand for transfer of reversionary interest is premature. The contractual obligation to transfer arises only upon completion of the development, sale of all units, and registration of leases. As at the time of filing, those conditions precedent had not been met. The suit is therefore premature and unsustainable. 14. The Plaintiffs opposed the Preliminary Objection through Grounds of Opposition dated 6 th August, 2026. They contended that the objection does not raise pure points of law but requires the ascertainment of disputed facts, that the Defendants did not invoke Section 6 of the Arbitration Act within the prescribed time, and that the suit raises claims extending beyond the obligation to transfer the ELCLC E051 2025 RULING 10

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reversionary interest. They urged the Court to dismiss the objection with costs. 15. On 23rd July, 2026, the Court directed that the Preliminary Objection be heard first and disposed of by way of written submissions. The Defendants were directed to file and serve their submissions within fourteen days, with the Plaintiffs to respond within fourteen days of service. Both parties filed submissions. The Defendants’ submissions, filed through M/S Onyoni & Company Advocates, are dated 4th August, 2026, while the Plaintiffs’ submissions, filed through M/S Otiang’a Owiti & Company Advocates, are dated 6th August, 2026. The Defendants’ Submissions 16. The Defendants submitted that the Preliminary Objection raises pure points of law capable of disposing of the suit. They relied on the Supreme Court decision in Hassan Ali Joho & Another v Suleiman Said Shahbal & 2 Others [2014] eKLR, which cited Mukisa Biscuit Manufacturing ELCLC E051 2025 RULING 11

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Co. Ltd v West End Distributors Ltd [1969] EA 696 on the nature of a preliminary objection. 17. On arbitration, the Defendants submitted that the Plaintiffs’ claims arise wholly from the sale agreements and leases through which they acquired their respective units. They contended that Clause 4(ii) of the leases requires disputes concerning their interpretation, performance or enforcement to be referred to arbitration before recourse to litigation. In their view, the Plaintiffs’ failure to invoke that mechanism rendered the suit incompetent and deprived this Court of jurisdiction. 18. The Defendants relied on Section 6(1) of the Arbitration Act, submitting that the Court is obliged to stay proceedings where a valid arbitration agreement exists unless the agreement is null and void, inoperative or incapable of being performed. They maintained that the Plaintiffs had neither attempted arbitration nor demonstrated that the arbitration clause was inapplicable or invalid. ELCLC E051 2025 RULING 12

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19. In support of the requirement to exhaust alternative dispute resolution Muthinja & mechanisms, another v the Henry Defendants & 1756 cited others [2015] KECA 304 (KLR), in which the Court of Appeal stated: “It is imperative that where a dispute resolution mechanism exists outside courts, the same should be exhausted before the jurisdiction of the courts is invoked. Courts ought to be the fora of last resort and not the first port of call the moment a storm brews within churches, as is bound to happen. The exhaustion doctrine is a sound one and serves the purpose of ensuring that there is a 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 of courts. This accords with Article 159 of the Constitution which commands ELCLC E051 2025 RULING 13

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Courts to encourage alternative means of dispute resolution.” 20. The Defendants further relied on Anne Mumbi Hinga v Victoria Njoki Gathara [2009] KECA 466 (KLR) for their submission that arbitration clauses ought to be respected and that the Court should not assume jurisdiction where the parties had agreed to submit their disputes to arbitration. 21. On prematurity, the Defendants submitted that the obligation to transfer the reversionary interest was subject to completion of the development, sale of all units and registration of the respective leases. They maintained that those conditions had not been fulfilled and that the Plaintiffs’ demand for transfer was therefore premature. 22. The Defendants contended that whether the obligation to transfer had crystallised was a question of contractual interpretation rather than factual proof. Relying on Kenya Commercial Bank Ltd v Osebe [1982] KLR 296, they ELCLC E051 2025 RULING 14

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submitted that courts cannot rewrite contracts for parties. They further maintained that the contractual provisions were admitted and referred to in the Plaint, and that their objection was argued on the assumption that the Plaintiffs’ pleaded facts were correct. 23. In conclusion, the Defendants urged the Court to uphold the Preliminary Objection and strike out the Plaint with costs. In the alternative, they prayed that the proceedings be stayed and the dispute referred to arbitration. Plaintiffs’ Submissions 24. The Plaintiffs submitted that neither ground raised by the Defendants constitutes a proper preliminary objection and that the objection ought to be dismissed with costs. 25. On arbitration, the Plaintiffs submitted that Section 6(1) of the Arbitration Act requires a party seeking reference to arbitration to apply for a stay of proceedings not later than the time of entering appearance or otherwise acknowledging ELCLC E051 2025 RULING 15

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the claim. They contended that the prescribed remedy is a timely application for stay and reference to arbitration, rather than the striking out of a Plaint through a preliminary objection. 26. The Plaintiffs argued that the Defendants had acknowledged the claim and opposed the interlocutory application on its merits before the Court delivered its ruling on 25th February, Defendants only 2026. They subsequently maintained raised the that the arbitration objection through the Notice dated 6th July, 2026. They further submitted that the reservation of a right to raise a jurisdictional objection in paragraph 26 of the 1 st Defendant’s Defence could not substitute for the application contemplated under Section 6 of the Arbitration Act. 27. The Plaintiffs also relied on the 1 st Defendant’s Counterclaim, through which it sought declarations, an injunction, general damages, interest and costs. They submitted that, by seeking substantive relief, the 1 st ELCLC E051 2025 RULING 16

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Defendant had affirmatively invoked the Court’s jurisdiction and could not simultaneously maintain that the Court lacked jurisdiction over the dispute. 28. In support of those arguments, the Plaintiffs cited Niazsons (K) Ltd v China Road & Bridge Corporation Kenya [2001] eKLR on the need to invoke an arbitration agreement promptly and the relevance of steps inconsistent with an intended reference. They also relied on UAP Provincial Insurance Company Ltd v Michael John Beckett [2013] eKLR regarding the statutory procedure under Section 6 of the Arbitration Act. Citing Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] KLR 1, they submitted that jurisdiction is derived from the Constitution and statute rather than private agreement. 29. On the threshold for a preliminary objection, the Plaintiffs relied on Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696, Oraro v Mbaja ELCLC E051 2025 RULING 17

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[2005] eKLR and Hassan Ali Joho & Another v Suleiman Said Shahbal & 2 Others [2014] eKLR. They submitted that a preliminary objection must raise a pure point of law on the assumption that the opposing party’s pleaded facts are correct and cannot require the ascertainment of facts or evaluation of evidence. 30. The Plaintiffs pointed out that paragraph 12 of the Plaint expressly pleaded that the estate had been completed and fully sold more than a decade earlier. They argued that the Defendants could not purport to accept the Plaintiffs’ pleaded facts while simultaneously maintaining that the development remained incomplete and units unsold. In their view, whether all units had been sold, the leases registered and the conditions for transfer fulfilled were contested matters requiring evidence. 31. The Plaintiffs further submitted that the Defendants had not produced leases executed by the named Plaintiffs and instead relied on a document described in their List of ELCLC E051 2025 RULING 18

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Documents as a “sample of standard Lease”. They contended that the existence, scope and binding effect of the arbitration agreement required evidential examination. They also alleged an inconsistency between the reference to Clause 4(ii) in the objection and the reference to Clause vii in prayer (b) of the Counterclaim. 32. The Plaintiffs maintained that the suit extended beyond the contractual demand for transfer of the reversionary interest. They submitted that it also concerned trespass, nuisance, derogation from grant, breach of trust, misrepresentation, planning and environmental compliance, and enforcement of rights under Articles 42 and 70 of the Constitution. They argued that these matters fell within the jurisdiction conferred upon this Court by Article 162(2)(b) of the Constitution and Section 13 of the Environment and Land Court Act. 33. The Plaintiffs also invoked Sections 4 and 88 of the Consumer Protection Act, submitting that a pre-dispute ELCLC E051 2025 RULING 19

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arbitration clause could not automatically defeat representative consumer claims arising from the marketing and sale of the residential units. They maintained that the applicability of those provisions raised mixed questions of fact and law unsuitable for determination through a preliminary objection. 34. Relying on the consensual nature of arbitration, the Plaintiffs further contended that the Defendants had not demonstrated that the arbitration agreement bound the 2 nd to 5th Defendants or all the homeowners represented in the suit. They also submitted that an arbitral tribunal constituted under the leases could not bind the National Environment Management Authority, the National Construction Authority or the County Government of Machakos. 35. On prematurity, the Plaintiffs submitted that the alleged construction on the communal space constituted a continuing interference with their rights for which immediate declaratory ELCLC E051 2025 RULING and injunctive relief was sought. They 20

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maintained that they could not be required to await an indefinite future transfer while the disputed property was being altered. They cited Taj Millenium Management Limited v Taj Mall Limited [2024] KEELC 5151 (KLR) in support of their argument that the nature and timing of a developer’s obligation to transfer the reversionary interest required consideration of the development documents and surrounding facts. 36. The Plaintiffs consequently urged the Court to dismiss the Preliminary Objection with costs and direct that the suit proceed to hearing. In the alternative, should the Court identify a discrete contractual issue suitable for arbitration, they prayed that only that issue be stayed, that the remaining claims proceed before this Court and that the preservatory orders issued on 25 th February, 2026, remain in force. In that regard, they relied on Section 7 of the Arbitration Act concerning interim measures of protection. Issues for Determination ELCLC E051 2025 RULING 21

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37. Having considered the Notice of Preliminary Objection, the Grounds of Opposition, the parties’ submissions and the authorities cited, the following issues arise for determination: a) Whether the arbitration clause in the leases ousts the jurisdiction of this Court to hear and determine the suit and, if not, whether the Defendants are entitled to a stay of proceedings and reference to arbitration under Section 6(1) of the Arbitration Act; b) Whether the prematurity of objection concerning the for claim the transfer alleged of the reversionary interest raises a pure point of law capable of disposing of the suit; c) Who should bear the costs of the Preliminary Objection? Analysis and Determination a) Whether the arbitration clause in the leases ousts the jurisdiction of this Court to hear and determine the suit and, if not, whether the Defendants are ELCLC E051 2025 RULING 22

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entitled to a stay of proceedings and reference to arbitration under Section 6(1) of the Arbitration Act. 38. The Defendants’ case is that Clause 4(ii) of the leases obliges the parties to submit their disputes to arbitration and that this Court is consequently without jurisdiction to entertain the suit. The Plaintiffs’ answer is that the Defendants did not invoke the arbitration agreement in the manner, or within the time, prescribed by Section 6 of the Arbitration Act. 39. The jurisdiction of this Court is conferred by Article 162(2) (b) of the Constitution and Section 13 of the Environment and Land Court Act, which together cloths it jurisdiction to hear and determine disputes relating to the environment and the use and occupation of, and title to, land, including disputes relating to contracts and other instruments granting enforceable interests in land. ELCLC E051 2025 RULING 23

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40. The present dispute concerns the use of an open space within L.R. No. 12715/552, the covenants in the leases granted over units in the estate and the transfer of the reversionary interest in that land. It falls within that jurisdiction. As the Plaintiffs correctly submitted, jurisdiction flows from the Constitution and statute. It can neither be conferred nor taken away by the agreement of the parties. An arbitration clause therefore does not oust the jurisdiction of this Court. What it confers is a contractual right, enforceable in the manner prescribed by the Arbitration Act, to have a dispute within its scope determined by arbitration. 41. The means by which a party may enforce that right in pending proceedings is prescribed by Section 6(1) of the Arbitration Act, which provides: “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 ELCLC E051 2025 RULING 24

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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 the parties with regard to the matters agreed to be referred to arbitration.” 42. The provision requires an application, and it requires that the application be made not later than the time when the applicant enters appearance or otherwise acknowledges the claim. The remedy it affords is a stay of the proceedings and a reference to arbitration, not the striking out of the suit. An arbitration clause cannot therefore be considered in isolation from the procedure by which it is invoked and the conduct of ELCLC E051 2025 RULING 25

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the party seeking to enforce it. Those statutory requirements are not displaced by describing the objection as one going to jurisdiction. 43. In Adrec Limited v Nation Media Group Limited [2017] KECA 106 (KLR), the Court of Appeal held at paragraph 14: “It should be emphasized that the right to seek and obtain stay of proceedings under section 6(1) of the Arbitration Act is lost the moment a defence is filed in the proceedings. By dint of the defence, the party filing it subjects itself to jurisdiction of the court and cannot thereafter resile from that position.” (Emphasis added) 44. In Kiunga v Wellendorf [2026] KEELC 491 (KLR), the Court stated at paragraph 277: ELCLC E051 2025 RULING 26

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“Accordingly, while the arbitration clause is valid, the parties conduct in fully participating in these proceedings referral to without arbitration promptly disentitles seeking them from invoking Section 6 of the Arbitration Act at this stage. In the given circumstances, therefore, the matter shall proceed before this Court for determination on merits.” 45. Under Section 6(1), the Defendants were required to apply for a stay not later than the time when they entered appearance or otherwise acknowledged the claim. M/S Onyoni & Company Advocates came on record for all five Defendants through a Notice of Appointment dated 9th June, 2025, and appeared for them before the Court on 10th June, 2025. By appearing in the suit through their advocates, the Defendants entered appearance, or at least acknowledged the claim, within the meaning of Section 6 (1) of the Arbitration Act. Any application for a stay ought therefore to have been made not later than 10 th June, 2025. The ELCLC E051 2025 RULING 27

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Defendants first invoked the arbitration agreement through the Notice of Preliminary Objection dated 6 th July, 2026, some thirteen months out of time. 46. The Court has also considered Clause 4(iv) of the lease, which appears at page 18 of the Plaintiffs’ bundle of documents and provides: “Notwithstanding the above provisions of this clause, a party is entitled to seek preliminary injunctive relief or interim measures from any or court conservatory of competent jurisdiction in Kenya” 47. The lease thus expressly preserves recourse to the court for protective orders notwithstanding the arbitration agreement. The Defendants’ opposition to the interlocutory application cannot, by itself, be treated as an abandonment of arbitration. The material considerations are whether the Defendants invoked Section 6(1) within the prescribed time, and whether their subsequent conduct was consistent ELCLC E051 2025 RULING 28

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with an intention to have the substantive dispute determined by arbitration. On the first consideration, I have already found that the Defendants invoked the arbitration agreement outside the period allowed by section 6(1) of the Arbitration Act. 48. On the second consideration, the conduct of the 1 st Defendant is inconsistent with any such intention. Its Statement of Defence dated 6th July, 2026 joins issue with the Plaintiffs on the merits, and its Counterclaim seeks declarations concerning the lawfulness of its construction and the alleged prematurity of the transfer claim, an injunction restraining interference with its development, and general damages. 49. The Defence pleads Clause 4(ii) and, at paragraph 26, reserves a right to raise a preliminary objection. A plea or reservation of that kind is not an application for stay under Section 6(1), and it cannot preserve a statutory remedy which the law requires to be exercised within a fixed time. ELCLC E051 2025 RULING 29

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On the principle stated in Adrec Limited v Nation Media Group Limited (supra), a party which defends the claim on its merits and seeks substantive reliefs from the Court cannot at the same time rely on the arbitration clause to contend that the Court is incapable of determining the dispute. 50. Although the Notice of Preliminary Objection bears the same date as the Defence and Counterclaim, the 1 st Defendant’s own pleading demonstrates that it elected to have the question determined by this Court. By prayer (b) of its Counterclaim, it asks the Court to declare that the demand for transfer of the reversionary interest is premature, which is the very question it says is reserved for arbitration. Having invited the Court to determine that question, the 1st Defendant cannot contend that it elected to arbitrate it. 51. The 2nd to 5th Defendants came on record on the same date as the 1st Defendant, through the same advocates and the ELCLC E051 2025 RULING 30

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same Notice of Appointment. They did not apply for a stay at that time or at any time before the Notice of Preliminary Objection. Time under Section 6(1) expired for each of them as it did for the 1st Defendant and their position does not depend on whether they have filed defences of their own. 52. The Court of Appeal addressed both the mode and the timing of an application under Section 6(1) in Yooshin Engineering Corporation v AIA Architects Ltd [2020] KECA 266 (KLR), stating at paragraph 24: “How should a party move the court to stay proceedings Although under the section section 6(1) does of not the Act? expressly prescribe the mode of moving the court, we do not think that a Notice of Preliminary Objection is the ideal tool. In our view, such a party should file a formal application.” 53. The Court further stated at paragraph 29: ELCLC E051 2025 RULING 31

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“But that is not all. Apart from filing an inappropriate Notice of Preliminary Objection instead of a notice of motion, the appellant’s attempt to challenge the trial court’s jurisdiction was not made within the prescribed time under section 6(1) of the Act.” 54. At paragraph 30, the Court stated: “The preliminary objection was raised four days after entry of appearance. This Court has severally held that the provisions of sections 6(1) of the Act must be construed strictly.” 55. This Court is bound by the foregoing decision, which requires Section 6(1) to be strictly construed. The seminal question is therefore not whether an arbitration agreement may be raised by way of preliminary objection, but whether the party relying on it invoked Section 6(1) within the time prescribed. The Defendants did not. It is accordingly ELCLC E051 2025 RULING 32

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unnecessary to decide whether the objection could otherwise have served as an application for stay. 56. The alternative prayer for a stay has been considered because both parties addressed it, and because the question of time disposes of it in whatever form it was made. 57. The Defendants also relied on Geoffrey Muthinja & Another v Samuel Muguna Henry & 1756 Others (supra) and Anne Mumbi Hinga v Victoria Njoki Gathara (supra), and on the duty of the courts under Article 159(2)(c) of the Constitution to promote alternative forms of dispute resolution. The Court accepts that duty. It is, however, discharged in accordance with the Arbitration Act and not in derogation from it. Where the agreed mechanism is arbitration, Parliament has prescribed in Section 6 how and when the obligation to arbitrate is to be enforced once a suit has been filed. 58. The doctrine of exhaustion does not relieve a party of the obligation to seek a stay in time, and it does not revive a ELCLC E051 2025 RULING 33

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statutory remedy after the party has submitted the substance of the dispute to the Court. Anne Mumbi Hinga v Victoria Njoki Gathara (supra) concerned the limits which Section 10 of the Arbitration Act places on the intervention of the court in matters governed by the Act. Section 6 is itself a provision which calls for the intervention of the court, and that decision does not relieve a party of the conditions which Section 6 imposes. 59. Even on the assumption that the arbitration agreement is valid and extends to the contractual dispute, the Defendants have not established a basis for a stay and reference under Section 6(1) of the Act. The Court therefore does not determine which of the represented homeowners are bound by the leases produced, whether every pleaded cause of action falls within the arbitration clause, whether the clause binds the 2nd to 5th Defendants, or whether Section 88 of the Consumer Protection Act limits its effect. Those questions do not arise for determination. ELCLC E051 2025 RULING 34

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60. In the result, the arbitration clause does not oust the jurisdiction of this Court and affords no basis for striking out the Plaint. The alternative prayer for a stay and reference to arbitration fails because it was not made within the time prescribed by Section 6(1) of the Arbitration Act. The first ground of the Preliminary Objection fails. b) Whether the prematurity objection of the concerning claim for the transfer alleged of the reversionary interest raises a pure point of law capable of disposing of the suit 61. The second ground is that the claim for transfer of the reversionary interest is premature because the conditions precedent to transfer have not been fulfilled: the development is said to be incomplete, not all units sold and the leases not all registered. The Plaintiffs dispute those facts and maintain that whether the conditions have been satisfied can only be established by evidence. ELCLC E051 2025 RULING 35

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62. The governing test was stated in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696, where Sir Charles Newbold, P. said at page 701: “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 has to be ascertained or if what is sought is the exercise of judicial discretion.” 63. In Oraro v Mbaja [2005] KEHC 3182 (KLR), Ojwang J (as he then was) stated: “Any assertion which claims to be a preliminary objection, and yet it bears factual aspects calling for proof, or seeks to adduce evidence for its authentication, is not, as a matter of legal principle, a true preliminary objection which the Court should allow to proceed.” ELCLC E051 2025 RULING 36

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64. At paragraph 12 of the Plaint, the Plaintiffs aver that the estate was completed and fully sold more than a decade before the suit was instituted. On a preliminary objection, that averment must be taken as true. If it is true, the conditions on which the Defendants rely were satisfied long ago, and the claim is not premature. The Defence pleads the contrary that the development is proceeding in phases and that the conditions for transfer have not been met. The objection can succeed only if the Court prefers the Defendants’ account to that pleaded by the Plaintiffs. That is a determination of fact which cannot be made on a preliminary objection. 65. The Defendants submit that the question is one of contractual interpretation, and rely on the principle that the Court cannot rewrite a contract for the parties. The principle is not in question. The Plaintiffs do not ask the Court to rewrite the leases. Even if the conditions governing transfer are clear, whether they have been fulfilled is a distinct question of fact. A term requiring the sale of all units or the ELCLC E051 2025 RULING 37

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registration of the leases does not establish that any unit remains unsold or that any lease remains unregistered. Those are matters to be proved by evidence, not resolved by construction. 66. There is a further reason why the second ground cannot succeed. The suit is not confined to the demand for transfer of the reversionary interest. It also seeks declaratory and injunctive reliefs to protect an open space said to have been reserved for communal use, founded on alleged breach of covenant, derogation from grant, breach of trust and other pleaded wrongs. Even if the claim for transfer were premature, that conclusion would not dispose of those claims and could not justify striking out the suit as a whole. 67. The second ground of objection depends on the ascertainment of disputed facts and would not dispose of the suit even if it were upheld. It does not meet the threshold in Mukisa Biscuit Manufacturing Co. Ltd v West End ELCLC E051 2025 RULING 38

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Distributors Ltd (supra). The ground is accordingly without merit. c) Who should bear the costs of the Preliminary Objection? 68. Section 27(1) of the Civil Procedure Act commits the award of costs to the discretion of the Court, subject to the rule that costs follow the event unless the Court, for good reason, otherwise orders. 69. The Plaintiffs have succeeded against the Preliminary Objection. There is no reason to depart from the general rule on costs. Accordingly, the costs of the Preliminary Objection are awarded to the Plaintiffs, to be borne by the Defendants. Disposition 70. Accordingly, the Court orders as follows: a) The Defendants’ Notice of Preliminary Objection dated 6th July, 2026, is dismissed. ELCLC E051 2025 RULING 39

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b) The Defendants shall bear the costs of the Preliminary Objection. c) The file is transferred to the Environment and Land Court at Mavoko for hearing and determination. It is so ordered. Delivered and Dated at Machakos this 8TH day of October, 2026. HON. J. N. KUYIONI JUDGE 08.10.2026 Ruling delivered virtually through Microsoft Teams Video Conferencing Platform In the presence of; Catherine Court Assistant. ELCLC E051 2025 RULING 40

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Ms. Maina for the Plaintiffs. Mr. Opini for the Defendants. ELCLC E051 2025 RULING 41

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