Ruai Family Hospital Ltd v Kenya Power & Lighting Company Ltd (Claim E4169 of 2024) [2025] SCC 47 (KLR)

In determining this issue, this court relies on the case of Mukisa Biscuit Manufacturing Co Ltd Vs West End Distributors Limited (1969)E.A 696 where it was held that: “A Notice of 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 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 exercise of judicial discretion.” The essence of a preliminary objection was given by Law, JA and Sir Charles Newbold P. in Mukisa Biscuits Manufacturing Co Ltd Vs West End Distributors (1969) EA 696. At page 700, Law, JA stated that: “…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.”(Emphasis added) From the authority cited above, it is clear that the first ingredient of a Notice of Preliminary Objection is that it must be based on pure points of law. The Respondent/Applicant is questioning the jurisdiction of this court to hear and determine the claim herein. In the locus classicus on the subject of jurisdiction, the High Court in the Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd. (1989): “Jurisdiction is everything. Without it a court has no power to make one more step. Where a court has no jurisdiction there would be no basis for a continuation of proceedings pending other evidence. A court of law downs its tools in respect of the matter before it the

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moment it holds the opinion that 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 judgment is given.” A reading of the authority above leaves no doubt in the mind of this court that the question of jurisdiction is a pure point of law. In addition to that, it is noteworthy that the consequence of finding that this court lacks the jurisdiction to entertain this claim will determine the instant claim. Given the foregoing, this court finds that the Notice of Preliminary Objection filed herein is properly before this court since it ticks all the boxes set out in the Mukisa Biscuits case (supra). Whether the Notice of Preliminary Objection is merited The jurisdiction of this court is set out under section 12 of the Small Claims Court Act in the following terms:(1) Subject to this Act, the Rules and any other law, the Court has jurisdiction to determine any civil claim relating to— (a) a contract for sale and supply of goods or services; (b) a contract relating to money held and received; (c) liability in tort in respect of loss or damage caused to any property or for the delivery or recovery of movable property; (d) compensation for personal injuries; and (e) set-off and counterclaim under any contract.

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(2) Without prejudice to the generality of subsection (1), the Court may exercise any other civil jurisdiction as may be conferred under any other written law. (3) The pecuniary jurisdiction of the Court shall be limited to one million shillings. (4) Without prejudice to subsection (3), the Chief Justice may determine by notice in the Gazette such other pecuniary jurisdiction of the Court as the Chief Justice thinks fit. The claim before this court is based on the insurer’s right under the doctrine of subrogation. A claim under the doctrine of subrogation is a claim relating to a contract for supply of insurance services. The foregoing shows that on the face of it, unless this court’s jurisdiction is limited by any other law, this court is clothed with the requisite jurisdiction to hear and determine all the claim before it. Be that as it may, this court agrees with the Respondent/Applicant that the doctrine of exhaustion, judicial abstention and judicial restraint may limit a court’s jurisdiction in the first instance. This was the holding in Benson Ambuti Adega & 2 Others v Kibos Distillers Limited & 5 Others [2020] eKLR, the Supreme Court of Kenya stated that; “Judicial abstention, as with judicial restraint, is a doctrine not founded in constitutional or statutory provisions, but one that has been established through common law practice. It provides that a court, though it may be vested with the requisite and sweeping jurisdiction to hear and determine certain issues as may be presented before it for adjudication, should nonetheless exercise restraint or refrain itself from making such determination, if there would be other appropriate legislatively mandated institutions and mechanism. “ Emphasize added

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The gist of the Respondent/Applicant’s Preliminary Objection was that this claim ought to have been filed before the Energy Tribunal in the first instance. The jurisdiction of the Energy Tribunal is established under Section 36 of the Energy Act as follows; 1.The Tribunal shall have jurisdiction to hear and determine all matters referred to it, relating to the energy and petroleum sector arising under this Act or any other Act. 2.The jurisdiction of the Tribunal shall not include the trial of any criminal offence. 3.The Tribunal shall have original civil jurisdiction on any dispute between a licensee and a third party or between licensees. (Emphasis added) 4.The Tribunal shall have appellate jurisdiction over the decisions of the Authority and any licensing authority and in exercise of its functions may refer any matter back to the Authority or any licensing authority for reconsideration. 5.The Tribunal shall have power to grant equitable reliefs including but not limited to injunctions, penalties, damages, specific performance. 6.The Tribunal shall hear and determine matters referred to it expeditiously. A plain reading of section 36(3) of the Energy Act may tempt one to conclude that the claim herein being a civil dispute between Kenya Power (a licensee) under the Act and the Respondent (a third party) is a matter that the tribunal possesses original civil jurisdiction to hear and determine.

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However, the law demands that a statute be read/interpreted as a whole, as held in Nicholas Mwiti & 22 others v Pharmacy and Poisons Board & another [2018] eKLR, where the court rendered itself thus: “A statute should also be looked at both textually and contextually as both are necessary interpretive tools in an attempt to understand what the legislature intended to achieve through that legislation. In this regard, the supreme Court of India state observed in Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd., 1987 SCR (2) 1 that; “Interpretation must depend on the text and the context. They are the basis of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute-maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context…This was emphasized by the Court of Appeal in the case of The Engineers Board of Kenya v Jesse Waweru Wahome & others Civil Appeal No 240 of 2013 when it stated; “One of the canons of statutory interpretation is a holistic approach…. no provision of any legislation should be treated as ‘stand -alone’ An Act of parliament should be read as a whole, the essence being that a proposition in one part of the Act is by implication modified by another proposition elsewhere in the Act.” A dispute is defined under the Energy (Complaints and Disputes Resolution) Regulations, 2012 as a disagreement that exists, the parties acting in good faith have failed to reach an amicable resolution of a complaint after all due

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efforts have been made to resolve it. That definition of a dispute under the Energy Act does not give an exhaustive list of disputes contemplated under the Act. Regulation 4 of said regulations, on the other hand, exhaustively lists all the disputes that the Tribunal and the Authority established under the Act are mandated to hear and determine in the first instance. The disputes are: (a) billing, damages, disconnection, health and safety, electrical installations, interruptions, licensee practices and procedures, metering, new connections and extensions, reconnections, quality of service, quality of supply, tariffs, way leaves, easements or rights-ofway in relation to the generation, transmission, distribution, supply and use of electrical energy. (b) damages, adulteration and under-dispensing of products, licensee practices and procedures, health and safety in relation to the importation, refining, exportation, wholesale, retail, storage or transportation of petroleum products; and (c) any other activity and/or matter regulated under the Act. The foregoing shows that the disputes contemplated under the Act are energy sector-specific disputes, but not any dispute involving a licensee under the Act. The mere fact that a licensee under the Energy Act has been sued in a civil court does not mean that such a civil dispute is a preserve of the Tribunal under the Act. Be that as it may, the question of the Energy Tribunal’s jurisdiction was well settled by.Magare J in Kahare v Kenya Power & Lighting Company Ltd (Civil Appeal E030 of 2022) [2024] KEHC 3175 (KLR) (15 March 2024) (Judgment) faulted a decision by an adjudicator declining to hear a debt recovery case against KPLC on the ground that such a dispute is within the province of the tribunal. The learned judge rendered himself thus:

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‘The Act does not envisage the end of the food chain, where small retailers are to be before the tribunal. The tribunal has no capacity to handle disputes of the nature that arise on a day to day. It cannot purport to hear disputes on Refund of amounts lawfully paid to the respondent, subrogation, and negligence disputes. That is within the purview of the Magistrates court Act. The act deals with the energy entities that have the means and wherewithal to travel to Nairobi to deal with the upstream and middle stream energy issues including down stream issues. Peripheral issues including positioning of poles, removal of poles, loses due to adulterated fuel, faulty power lines and such minor issues shall remain within the province of this court and the magistrate’s court….’ In view of the above, adopting the interpretation of a dispute under the Energy Act as proposed by the Respondent/Applicant on the tribunal’s jurisdiction would mean that even accident claims against a licensee under the Act will be a preserve of the tribunal. This court takes judicial notice of civil claims filed in civil courts against licensees recognised under the Energy Act. Interpreting section 36 of the Energy Act in the manner proposed by the Respondent/Applicant will be akin to granting the Tribunal under the Energy Act jurisdiction through judicial craft. A court’s or a tribunal’s jurisdiction can only be granted by the Constitution or a statute, as was well explicated by the Supreme Court in Samuel Kamau Macharia & Another v Kenya Commercial Bank Limited & 2 Others[2012] eKLR. As follows:-: “A court's jurisdiction flows 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. It cannot arrogate to itself jurisdiction exceeding that which is conferred by law. We agree with counsel for the first and second Respondents in his submission that the

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issue as to whether a court of law has jurisdiction to entertain a matter before it is not one of mere procedural technicality; it goes to the very heart of the matter, for without jurisdiction, the court cannot entertain any proceedings...Where the Constitution exhaustively provides for the jurisdiction of a court of law, the court must operate within the constitutional limits. It cannot expand its jurisdiction through judicial craft or innovation. Nor can Parliament confer jurisdiction upon a court of law beyond the scope defined by the Constitution. Where the Constitution confers power on Parliament to set the jurisdiction of a court of law or tribunal, the legislature would be within its authority to prescribe the jurisdiction of such a court or tribunal by statute law." Given the foregoing, it is evident that a claim under the doctrine of subrogation is not an energy sector-specific dispute contemplated under section 36 of the Energy Act….. Nyamu J. held the same view in OLUOCH –V- CHARAGU (SUPRA). The Learned Judge held that the omission to prove possession or power and the relevance of the documents to the issues in question was fatal to the Plaintiff’s application for discovery. This is a claim within the meaning of section 12 (1) (a) of the Small Claims Court Act. It is against this backdrop that this court declines the invitation by the Respondent/Applicant to find that this claim ought to have been filed before the Energy and Petroleum Tribunal in the first instance. DISPOSITION The upshot of the above is that the Respondent/Applicant’s Notice of Preliminary Objection dated 04th April 2025 is bereft of merit; thus, the same is dismissed with costs of Kshs. 10,000/= to the Claimant/Respondent. Read, signed, and delivered in open Court at Bungoma this 01 st day of July 2025

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T.O. OMONO ADJUDICATOR In the presence Ms. Ajwang for the Claimant/Respondent C/A: Albert

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