AC Africane Holdings Limited v Lamuria Properties Limited (Environment and Land Miscellaneous Case E009 of 2025) [2026] KEELC 4191 (KLR) (17 June 2026) (Ruling)

AC Africane Holdings Limited v Lamuria Properties Limited (Environment and Land Miscellaneous Case E009 of 2025) [2026] KEELC 4191 (KLR) (17 June 2026) (Ruling) Neutral citation: [2026] KEELC 4191 (KLR) Republic of Kenya In the Environment and Land Court at Nanyuki Environment and Land Miscellaneous Case E009 of 2025 LN Mbugua, J June 17, 2026 Between AC Africane Holdings Limited Applicant and Lamuria Properties Limited Respondent Ruling 1.Before me is a notice of motion application dated 9.10.2025 where the applicant seeks the following orders;1.This application be certified urgent and heard ex parte in the first instance.2.There be a temporary stay of execution and/or enforcement of the Order issued on 1st October 2025, requiring the applicant to deposit the amount of ksh 2,411,670/- as alleged rent arrears within fourteen (14) days, pending the hearing and determination of this application.3.The applicant be granted leave to appeal against the said Order to the High Court at Nanyuki (Environment and Land Court Division).4.Upon grant of leave, there be a stay of execution of the said Order dated 1st October 2025 pending the hearing and determination of the intended appeal.5.Costs of this application be provided for in the cause.” 2.The grounds in support of the application are that;1.On 2 September 2025 the applicant gave Notice of Arbitration to the respondent in relation to a Lease dated 27 July 2021 which contains a valid arbitration clause, duly invoked by the applicant.2.That on 10 September 2025 the applicant was served with an interlocutory injunction by the respondent which required the applicant to pay rent due under the Lease.3.On 23 September 2025 the applicant filed a motion contesting jurisdiction of the Magistrates Court, Nanyuki in respect of MELC/073/2025) Lamuria Properties Limited V AC Africane Holdings Limited.4.On 1st October 2025, this Magistrates Court issued an Order compelling the applicants to deposit the amount claimed by the respondent in rent arrears in court and stating the application on jurisdiction would be heard on 22 October 2025.5.That in a letter to the applicant dated 8 October 2025, the respondent claimed Ksh 2,411,670/- (Two million and four hundred and eleven thousand and six hundred and seventy Kenya shillings) as alleged rent arrears in court within 14 days, an amount which the respondent contests and wholly rejects as not a true and accurate account of rent due under the lease.6.That the applicant is aggrieved by the said Order and intends to appeal to the High Court at Nanyuki.7.That under Section 6(1) of the Arbitration Act, the Magistrates Court in Nanyuki is required to stay proceedings where a valid arbitration clause exists (UAP Provincial Insurance Co. Ltd V Michael John Beckett (2013)eKLR).8.That the impugned Order affects matters beyond the jurisdiction of the Magistrates court in Nanyuki contrary to the holding of the Supreme Court in Dina Management Ltd V County Government of Mombasa, which reaffirmed that a court acting without jurisdiction renders all proceedings and orders null and void.9.That the Order compels payment of a payment of a disputed sum, contrary to the applicant’s rights under the Lease to deduct repair costs and claim rent abatement following the respondent’s continuing breach of its repair and maintenance obligations.10.That the respondent has relied on a fraudulent Deed of Variation and Gurantee purporting to transfer the lessor’s rights, which document bears a signature that was never commissioned in the presence of the deponent and was executed while the deponent was not present in Nanyuki.11.That the respondent’s documents, including electronic records, were filed without the certificate of electronic evidence required under Section 106B of the Evidence Act, rendering them inadmissible in law.12.That the respondent’s witness statement on which their plaint was based is not in fact commissioned.13.That the respondent’s own default and refusal to repair the premises causes loss of over 80% tenantable capacity, giving rise to genuine disputes on liability and quantum that can only be determined through arbitration.14.That enforcement of the Order will occasion substantial loss to the applicant, prejudice its right to a fair hearing, and defeat the applicant’s contractual rights and statutory right to arbitration.15.That the applicant has a meritorious intended appeal which raises serious questions of law and fact, including the Court’s jurisdiction, the validity of the arbitration clause, and the admissibility of the respondent’s documents16.That this application has been brought promptly, diligently and in good faith, within the compliance period set by the impugned Order.17.That it is in the interest of justice that leave to appeal and stay of execution be granted to preserve the applicant’s rights and prevent the appeal from being rendered nugatory.” 3.In opposition thereof, the respondent filed Grounds of opposition dated 15.10.2025 where it argues as follows;1.That a similar application seeking same orders as herein is pending before the Chief Magistrate in Nanyuki chief Magistrates Court ELC case number E073 of 2025. The application has directions to the effect that it is as certified urgent and listed for directions on the 15th October 2025.2.That the orders of 1st October 2025 directing deposit of rent in court are interlocutory and very conservatory in nature pending the hearing of the applications before the court and do not in any way determine the rights of the parties.3.That the applicant has not attached a draft memorandum of appeal or demonstrated any other step towards the allegedly intended appeal from which the court can pick out any matter warranting serious judicial consideration on an appeal.4.That no new facts or circumstances have been presented to court different from what is already in the pleadings filed by the parties in the matter before the Learned Magistrate being what the court judiciously considered when making the orders of 1st October 2025.5.That the applicant has not shown what loss or prejudice they would suffer by complying with the court orders given that it directed the deposit of rent which is ascertainable in court and not to the respondent.6.That the application is otherwise shallow and does not meet the legal threshold for grant of the orders sought and is mischievously meant to delay this matter while the applicant continues utilizing premises for which they are not paying rent or offering any form of security for.7.That the application is without merit and the applicant has deliberately sought to mislead the Honourable court by pleading unsubstantiated details about the dispute before the court.8.That granting the application will severely prejudice the respondent as it will mean that the applicant will continue utilizing the premises while there is no security for rent which is due and payable.9.That in the suit before the Honourable Magistrate’s Court, the respondent herein seeks a right of re-entry which is only capable of being granted by the court upon consideration of arguments for and against it. In the unlikely event the court orders that such litigation be conducted before an arbitrator, the court still reserved a right to make interlocutory orders as it deems free in the interests of justice pending arbitration.10.That the interest of justice favours compliance with court orders, and the court in making the order for deposit of rent in court did so in in the interests of justice and balancing the interests of the parties before it on an interim basis.” 4.The submissions of the applicant are dated 14.4.2026. It argues that pursuant to the provisions of Article 50 (1) of the Constitution and Section 6 (1) of the Arbitration Act, this court has powers to stay legal proceedings where an arbitration agreement exists. The applicant therefore desires that this court determines whether there is a valid arbitration clause in the lease. Further, it also desires the court to determine whether the filing of the suit ( I take this to be the case before the magistrates court) on a matter already subject to an earlier arbitration process is an abuse of the court and subjudice. It also wants the court to determine whether plaintiff’s suit should be struck out for failure to provide electronic evidence. The applicant has submitted at length on the above issues. 5.The applicant further submits that on 10.9.2025, the court in the case CMELC 073 OF 2025 directed the applicant to pay the disputed rent in court, and a similar order was also made on 1.10.2025, yet no special circumstances existed for the grant of such a mandatory interlocutory order. That on 26.9.2025, the respondent forced its entry into the suit premises with a view of evicting the applicant. 6.The applicant avers that it has appealed against the order of 1.10.2025. 7.The reliefs sought before this court by the applicant at the end of its submissions are set out as follows;1.That a Stay of Proceeding be granted under Section 6(1) of the Arbitration Act on the basis that the arbitration clause in the Lease is not invalid, null or void; that arbitration had been commenced prior to the Respondent filing proceedings in the Magistrates Court in Nanyuki (MELC 073 of 2025 Lamuria Properties Limited -v- AC Africane Holdings) and the matters at dispute in relation to rent payable, if any, and rent deductions, rent abatement, repairs and maintenance are all capable of being resolved at arbitration.2.The Respondent’s suit at the Magistrates Court in Nanyuki be struck out as an abuse of process.3.The Respondent’s suit at the Magistrates Court in Nanyuki be struck out for fatal failure to comply with Section 106B of the Evidence Act.4.That the three interlocutory mandatory orders of the Magistrates Court awarded to the Respondent on 10 September 2025, 1 October 2025 and 19 February 2026 prior to the merits of the case being and without special circumstances be set aside or stayed as they err in fact and law and are one sided, unconstitutional and unfair to the Applicant, amount to a clear pre-determination of the dispute and issuance of mandatory interlocutory orders that are not merited or lawful and deny the Applicant their right to a fair hearing on the merits of the case.5.Damages and punitive damages that the Court deems appropriate.6.Costs of the Applicant. 8.The submissions of the respondent are dated 21.4.2026. It argues that the submissions of the applicant are a departure from what is sought in the application, particularly the reliefs sought from this court. It argues that parties are bound by their pleadings, and any evidence at variance with the pleadings should be rejected. The respondent relies on the cases of Migore v South Nyanza Sugar Co. Ltd (2018) KEHC 5465 (KLR) and Independent Electoral and Boundaries Commission & Another vs Stephen Mutinda Mule & 3 Others (2014) eKLR. 9.It is further argued that the order for deposit of rent in court was not complied with, thus contempt proceedings are on going before the magistrates court. Thus the applicant wants to use an order of this court to escape or as a shield to the aforementioned contempt proceedings. 10.On leave to appeal, the respondent relies on the case of Rhoda Wairimu Karanja v Mary Wangui Karanja & Another (2014) KECA 255 (KLR) to argue that leave to appeal is normally granted where prima facie, it appears that there are grounds which merit serious judicial consideration. That in the case at hand, there is no draft memorandum of appeal for the court to asses the grounds thereof. It is argued that the applicant has left it to the court to imagine what grounds of appeal would be, including their merits. 11.It is further argued that the application by the applicant to refer the matter to arbitration was considered by the trial court and dismissed on 19.2.2026. 12.On stay of execution, it is argued that the applicant is a tenant and poses the question; How does a tenant suffer substantial loss in performing its contractual obligation?. Further, it is submitted that the court gave an order for the rent to be deposited in court, of which, if the applicant succeeds, such rent will be refunded. Adding that the order made by the court is a security for the performance of the tenant’s obligation. That in essence, the applicant has not met the criteria set out under Order 42 Rule 6 of the Civil Procedure rules particularly on the element of substantial loss. 13.I have considered all the arguments made herein relating to the application dated 9.10.2025 brought forth by the applicant. The applicant is aggrieved by the order of 1.10.2026 made before the trial court requiring it to deposit the amount of sh.2 411 670 in court. The issues falling for determination are whether the applicant should be granted leave to appeal against the aforementioned order and whether an order for stay of execution relating to the said order should be given. 14.As rightly submitted by the respondent, the applicant has submitted on issues beyond what is sought in the current application. Of great concern is the reliefs sought by the applicant in its submission. They are certainly not in tandem with the prayers sought in the application herein and are therefore disregarded. 15.On leave to appeal, I find that ordinarily, such leave is sought from the court issuing the order. Indeed such an application is made orally before the court which made the order. That is however water under the bridge as the applicant does not seem to have given much regard to that procedure. 16.Is leave to appeal warranted in the case at hand?. It is quite apparent that the applicant has not availed a draft memorandum of appeal. In a case like this one where there is no automatic right to appeal, the applicant ought to satisfy the court that the intended appeal contains arguable grounds. Going by the manner in which the applicant has prosecuted this miscellaneous suit, for instance, filing late submissions which don’t speak to the application, the court has great concerns as to what would be the substantial questions to be raised in the appeal. The applicant has missed the practical importance of annexing a draft memorandum of appeal. See National Land Commission v Tom Ojienda& Associates (2023) KECA 1183. 17.I also discern that the proceedings before the trial court are on going whereby in its own averments, the applicant has set out numerous applications before that court, including one challenging the jurisdiction of that court filed by the applicant. In the case of ,Ngetsa v Karisa & 2 others (Environment & Land Case 4 of 2021) [2024] KEELC 3425 (KLR) (24 April 2024) (Ruling) Neutral citation: [2024] KEELC 3425 (KLR), the court had this to say in relation to appeals challenging interlocutory orders;“…. Looking at the appeal it seeks to challenge interlocutory orders issued by the Lower Court, which means the current appeal is delaying the determination of the primary suit. I think it will be unjust to continue holding on an appeal which is a non-starter.” 18.The appellant is creating litigation havoc by filing an avalanche of applications before the courts. These multiple proceedings have the tendency to adversely affect the expeditious disposal of the matters in dispute and may even lead to issuance of conflicting decisions. Of great concern is the possibility that the applicant had already challenged the order of 1.10.2025 before the trial court. In its 1st ground of opposition the respondent contends that the applicant had made a similar application before the trial court. The full particulars on this issue have not been availed to this court by the parties. In that regard, and for whatever is the worth of the current application, the court grants the applicant leave to appeal. The court will not hesitate to strike out such an appeal if it emerges that indeed a similar application had been filed before the trial court. 19.On stay of execution, I make reference to the case of Selestica Limited v Gold Rock Development Ltd [2015], where it was stated that;“Stay of execution pending appeal is governed by Order 42 Rule 6 of the Civil Procedure Rules. The power to grant an application for stay of execution pending appeal is a discretionary one on sufficient cause being shown, where the applicant may suffer substantial loss; the application is made without unreasonable delay and on provision of such security as the Court may impose”.Also see- Antoine Ndiaye vs. African Virtual University [2015]eKLR Samvir Trustee Limited v Guardian Bank Limited [2007] eKLR, Amal Hauliers Limited v Abdulnasir Abukar Hassan [2017] eKLR 20.This court has keenly considered the arguments for and against the order of 1.10.2025.I find that when the matter was first presented before this court on 15.10.2025, the court observed that the order to deposit the disputed monies in court was appropriate. As rightly submitted by the respondent, the order made against the applicant is in essence a security for the performance of its obligation in the lease which would be refunded to it if it succeeds. The order is in tandem with the governing legal frame work on matters stay of execution as laid out under order 42 (6) of the Civil procedure rules. It is noted that the applicant has not on its part indicated what security it desires to offer in the matter. 21.What more, the applicant has not rebutted the averments made by the respondent that the former is facing contempt proceedings before the trial court for defying the court’s orders. 22.In the end, I proceed to give the following orders;1.Leave is granted for the Applicant to lodge an appeal only in respect of the order of 1.10.2025. The same is to be filed and served within 7 days from the date of this ruling failure to which the leave so granted shall automatically lapse.2.The prayer for stay of execution is dismissed.3.The applicant is to pay the costs of this suit to the respondent. DATED, SIGNED AND DELIVERED AT NANYUKI THIS 17TH DAY OF JUNE 2026 THROUGH MICROSOFT TEAMS.LUCY N. MBUGUA.JUDGEIn the presence of:Nancy Mwangi – C/AAshmider Kaur for Applicant absentThuku Mburu for Respondent