Kimathi v Standard Group PLC & another

2. The Claimant pleaded:(a) that at all material time relevant to the suit, the Claimant was employed by the 1st Respondent as its General Manager, Corporate Aairs & Marketing. (b) that due to the Claimant’s employment with the 1st Respondent, the 2nd Respondent took over the Claimant’s mortgage facility which he had taken with Housing Finance Corporation of Kenya Limited, and transferred to KCB Savings & Loan to nance acquisition of a matrimonial home, being the property known as Apartment No. 6D on Block 6, Maruti Apartments erected on L.R. No. 5/44, within Lavington Area of Nairobi County (the suit property). (c) that the Claimant’s mortgage repayment was tied to his monthly salary as received from the 1st Respondent, and that the 2nd Respondent approved continuation of the mortgage monthly instalment payments on condition that the Claimant’s account remained with the 2nd Respondent for the purpose of paying the mortgage through direct debit from the account. (d) that under the foregoing arrangement, the 1st Respondent would regularly deduct the mortgage repayment sum from the Claimant’s salary on month to month basis. (e) that in the year 2023, the 1st Respondent experienced a serious nancial deep dive which made it unable to pay salaries in time and/or at all, with the result that repayment of the Claimant’s mortgage went into default. (f) that arising from the default, the 1st Respondent approached the 2nd Respondent and that on 13th October, 2023, agreed on a direct mortgage repayment plan whereby the 1st Respondent would directly remit the mortgage repayments to the 2nd Respondent. (g) that the 1st Respondent informed the Claimant that it had taken over responsibility for the repayment of his mortgage, and that the amounts thereof would be deducted from his accrued salary arrears. (h) that the 1st Respondent defaulted the repayment commitment made to the 2nd Respondent; leading to a threat by the 2nd Respondent to dispose of the Claimant’s subject matrimonial home. (i) that numerous discussions were held between the 1st and 2nd Respondents, whereby assurance was issued by the 1st Respondent for settlement of the mortgage facility arrears. (j) that while the 1st Respondent continued to engage the 2nd Respondent on settlement of the mortgage facility, the 1st Respondent declared the Claimant redundant on 5th September, 2024; and terminated his services on account of redundancy. (k) that the Claimant’s terminal dues were tabulated and agreed at Kshs.12,184,822.78, and the accrued salary at Kshs.4,740,311/= (a total of Kshs.16,925,133.78). (l) that it was agreed that the 1st Respondent would pay the Claimant’s terminal dues of Kshs.12,184,822/= to settle the Claimant’s mortgage facility with the 2nd Respondent, which stood at Kshs.11,040,822/=. (m) that the 1st Respondent has not remitted the said sum of Kshs.11,040,010/= to the 2nd Respondent, with the result that the Respondent advertised the Claimant’s only place of aboard and matrimonial home for sale by public auction on 6th November, 2025. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2172/eng@2026-07-24 2

page 2 of 6

(n) 3. that failure by the 1st Respondent to remit the said sum to the 2nd Respondent to settle the outstanding facility is unjust, unfair and contrary to the Claimant’s legitimate expectation that the 1st Respondent would honour their agreement that the mortgage amounts would be settled from the Claimant’s terminal dues. The suit was led contemporaneously with an urgent application dated 27th October, 2025. The following orders are sought in the said application:(a) Spent. (b) Spent. (c) A temporary injunction restraining the 2nd Respondent by itself, agents, servants, employees or otherwise howsoever from selling, disposing, alienating and/or in any manner whatsoever dealing with and/or interfering with the Claimant’s proprietorship, occupation and use of the property known as Apartment No. 6D on Block 6, Maruti Apartments erected on L.R. No. 5/44 within the Lavington Area of Nairobi County, pending hearing and determination of the application. (d) An order compelling the 1st Respondent to forthwith release to the 2nd Respondent the sum of Kshs.11,040,010.80 from the Claimant’s uncontested terminal dues of Kshs.16,925,133.78 in nal settlement of the Claimant’s Mortgage facility. (e) A temporary injunction restraining the 2nd Respondent by itself, agents, servants, employees or otherwise howsoever from selling, disposing, alienating and/or in any manner whatsoever dealing with and/or interfering with the Claimant’s proprietorship, occupation and use of the property known as Apartment No. 6D on Block 6, Maruti Apartments erected on L.R. No. 5/44 within the Lavington Area of Nairobi County, pending hearing and determination of the claim. (f) Costs of the application be in favour of the Claimant. 4. The application is supported by the Claimant’s supporting adavit sworn on 27th October, 2025, in which matters stated in paragraph 2 of this Ruling are deponed to. 5. Documents annexed to the said adavit include:(a) The 1st Respondent’s letters to the 2nd Respondent Bank dated 13th October, 2023, 13th December, 2023 and 4th July, 2024. (b) The 2nd Respondent’s letter to the Claimant dated 26th September, 2023. 6. The application was placed before me under a certicate of urgency on 28th October, 2025, and I directed that the same be served, and xed the matter for mention on 30th October, 2025 for appropriate directions and/or orders. 7. There was no appearance on the part of the Respondents when the matter came up in Court on 30th October, 2025; and upon hearing submissions by Counsel for the Claimant/Applicant, I granted an interim restraining order (in terms of prayer (c) in the application). 8. The 2nd Respondent Bank led a Notice of Preliminary Objection dated 2nd December, 2025 and called for the Claimant’s suit against it and the application dated 27th October, 2025 to be struck o on grounds:- https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2172/eng@2026-07-24 3

page 3 of 6

(a) That there is no and has never been any employment or labour relationship between the Claimant and the 2nd Respondent. (b) That the only relationship between the Claimant and the 2nd Respondent is a bankercustomer relationship which is completely out of the jurisdiction of this Honourable Court, and is instead a purely commercial dispute vested exclusively in the High Court of Kenya, Commercial Division. (c) That it is plainly evident from the Claimant's pleadings that his dispute against the 2nd Respondent is solely based on the banking relationship between them in respect of which the Claimant seeks an injunction against the 2nd Respondent's intended exercise of its statutory power of sale over Apartment No. 6D, Block 6, Maruti Apartments erected on L.R. No. 5/44 as a result of the Claimant's default in repayment of the mortgage loan granted to him by the 2nd Respondent. (d) That by virtue of the provisions of Articles 162 (2) and 165 (3) of the Constitution of Kenya, Section 12 (1) of the Employment and Labour Relations Court Act, Cap 8E Laws of Kenya, and High Court Practice Directions dated 18th November 1997, this Honourable Court lacks jurisdiction to hear the commercial dispute between the 2nd Respondent and the Claimant. (e) That the Claimant's combination of his employment claim against his former employer, the 1st Respondent, and his commercial claim against his bank, the 2nd Respondent, is fatally defective as there is absolutely no nexus, contractual or other, between the 1st Respondent and the 2nd Respondent, nor any privity of contract between them. 9. On 3rd December, 2025, I ordered that the foregoing Preliminary Objection be taken rst, and directed parties herein to le written submissions thereon. Written submissions have since been led on behalf of the Claimant and the 2nd Respondent respectively. Counsel for the 1st Respondent informed the Court on 30th April, 2026 that the 1st Respondent did not intend to submit on the aforesaid Preliminary Objection. 10. The single issue for determination herein is whether this Court is seized of Jurisdiction to entertain, to hear and to determine the Claimant’s suit and application herein against the 2nd Respondent Bank. 11. As asserted by the 2nd Respondent, it is clear from the Claimant’s statement of claim that the dispute herein (against the 2nd Respondent) arises from commercial/banking transactions between the Claimant and the 2nd Respondent Bank, entered into and/or transacted by the two outside the scope of the Claimant’s employment with the 1st Respondent. There is not shown to have existed an employer/ employee relationship between the Claimant and the 2nd Respondent Bank. 12. I have noted from the letters listed at paragraph 5 of this Ruling that the dispute between the Claimant and the 2nd Respondent Bank arose from some three (3) outstanding facilities that the Claimant has with the 2nd Respondent Bank, being a mortgage facility, a personal loan and a card loan; advanced to the Claimant by the 2nd Respondent (the Bank) on dates that the Claimant has not stated. The date of the Claimant’s employment by the 1st Respondent is also not stated. 13. I have also noted from the aforesaid letters, and from the Claimant’s pleadings herein, that at a given point in time, the 1st Respondent (being the Claimant’s employer at the time) made a commitment to the 2nd Respondent Bank “regarding the payment of the arrears and continued servicing of the loans . . . anticipating that the loan servicing will return to its regular schedule to prevent any adverse actions https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2172/eng@2026-07-24 4

page 4 of 6

against Mr. Kimathi, his secured property or himself”. No agreement is shown to have been entered into between the 1st Respondent and the 2nd Respondent Bank in the foregoing regard. 14. The Claimant’s employment with the 1st Respondent is shown to have been terminated on 5th September, 2024 on account of redundancy. 15. As already stated in this Ruling, there is not shown to have been any privity of contract of employment between the Claimant and the 2nd Respondent. The facilities advanced by the 2nd Respondent to the Claimant are NOT shown to have been advanced within the context of an employer/employee relationship. The dispute herein does not fall within the parameters of Article 162(2)(a) of the Constitution of Kenya 2010, Section 12(1) of the Employment and Labour Relations Court Act, or even the disputes contemplated in the preamble to the said Act. I make a nding that this Court has no Jurisdiction to entertain, to hear and to determine the Claimant’s suit and Notice of Motion dated 27th October, 2025, to the extend that they relate to and/or touch on the 2nd Respondent. 16. The Supreme Court of Kenya stated as follows in the case of Samuel Kamau Macharia & Another – vs – Kenya Commercial Bank Limited & 2 Others [2012] eKLR:“ A Court’s Jurisdiction ows from either the Constitution or legislation or both. Thus, a court of law can only exercise Jurisdiction as conferred by the Constitution or other written law, and cannot arrogate to itself jurisdiction exceeding that which is conferred upon it by law . . . whether a court of law has jurisdiction to entertain a matter before it . . . goes to the very heart of the matter, for without Jurisdiction, the Court cannot entertain any proceedings.” 17. The Court of Appeal stated as follows in the case of Owners of Motor Vessel “Lilian S” – vs – Caltex Oil (Kenya) Limited [1989] (Nyarangi, JA):“ . . . I think it is reasonably plain that a question of jurisdiction ought to be raised at the earliest opportunity and the Court seized of the matter is then obligated to decide the issue straight away on the material before it. Jurisdiction is everything. Without it, a court has no power to make one more step. Where a Court has no Jurisdiction, there would be no basis for a continuation of the proceedings pending other evidence. A court of law down tools in respect of the matter before it the moment it holds the opinion that it is without Jurisdiction.” 18. This Court must down its tools regarding the Claimant’s suit against the 2nd Respondent Bank. 19. Consequently, and having considered written submissions led on behalf of the Claimant and the 2nd Respondent, both the Claimant’s suit and the Notice of Motion dated 27th October, 2025, against the 2nd Respondent Bank, are hereby struck o. 20. Each party shall bear its own costs of the proceedings so far. 21. It is so ordered. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 24TH DAY OF JULY 2026 AGNES KITIKU NZEI JUDGE Order https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2172/eng@2026-07-24 5

page 5 of 6

This Ruling has been delivered via Microsoft Teams Online Platform. A signed copy will be availed to each party upon payment of the applicable Court fees. AGNES KITIKU NZEI JUDGE Appearance: Mr. Agwara for the Claimant No appearance for the 1st Respondent Miss Karanja for the 2nd Respondent https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2172/eng@2026-07-24 6

page 6 of 6