https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3587

Asego Holdings Ltd & another v Commercial International Bank Kenya (Formerly Mayfair Bank Limited) & 4 others; Okundi (Interested Party) (Environment and Land Case Civil Suit E591 of 2025) [2026] KEELC 3587 (KLR) (11 June 2026) (Ruling) Neutral citation: [2026] KEELC 3587 (KLR) Republic of Kenya In the Environment and Land Court at Nairobi Environment and Land Case Civil Suit E591 of 2025 MN Kullow, J June 11, 2026 Between Asego Holdings Limited 1st Plaintiff Philip Okoth Okundi 2nd Plaintiff and Commercial International Bank Kenya (Formerly Mayfair Bank Limited) 1st Defendant Sololo Segem Limited 2nd Defendant Watts Auctioneers 3rd Defendant Mark Macharia Ng’aru 4th Defendant The Chief Land Registrar 5th Defendant and Edward Kenneth Otieno Okundi Interested Party Ruling Introduction 1.The matter is coming up for determination on the Notice of preliminary objection dated 9th December 2025 by the 1st and 2nd Defendants. The Notice of Preliminary Objection raised the following groundsa.That, this Honourable Court does not have the jurisdiction to hear the suit case is premised on banking matters and the use of land as collateral, and so it falls under the unlimited original jurisdiction of the High Court under Article 165 (3) (a) of the Constitution. 2.The court directed for the notice of preliminary objection be dispensed off by written submissions. The 1st and 2nd Defendants in support of the Preliminary objection filed submissions dated 24th April 2026, the Plaintiff drafted submissions dated 30th April 2026 while the 3rd Defendant drafted submissions dated 29th April 2026 1st and 2nd Defendant’s submissions 3.In support of their Notice of Preliminary Objection the 1st and 2nd defendants submitted that the Constitution expressly listed the matters within the jurisdiction of the Environment court as to relate to use of Land whereas civil matters including commercial matters are to be handled by the High Court Counsel submitted that the dispute was one where the plaintiffs were challenging the validity of a charge and the exercise of the 1st Respondent’s statutory power of sale falling within the jurisdiction of the high court and as such this court has no jurisdiction to entertain the suit relying on the case of Co-operative Bank of Kenya Limited Vs Patrick Kangethe Njuguna & 5 others [2017] KECA 79 (KLR). 4.The 3rd Defendant in her submissions supported the notice of preliminary objection by the reiterating the contents in the submissions by 1st and 2nd Defendant. 5.The Plaintiff in her submissions indicated that the jurisdiction of a court was determined by the nature of the dispute and that the cause of action in the plaint was anchored on L R Nairobi/Block 15/613 being the issue of alleged forgery of the charge instruments, the unlawful registration of the charges, the exercise of the chargee’s statutory power of sale and the consequent transfer of title. That the prayers did not seek for the recovery of debt but the cancellation of the fraudulent instruments and hence the dispute was not commercial in nature. 6.The Plaintiff further argued that the preliminary objection did not meet the threshold for what constitutes a Notice of Preliminary Objection as in Mukisa Biscuit Manufacturing Co. Ltd Vs West End Distributors Ltd [1969] EA 696, that the issues were not of law but would require the court to interrogate the same to establish whether the matter was a land matter or a commercial matter Analysis and determination 7.Having considered the Notice of Preliminary Objection and the submissions herein the only issue for determination is whether the Notice of Preliminary Objection dated 9th December 2025 is meritedThe threshold of a Preliminary Objection was set out by the Court of Appeal in the case of Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696 as follows:“...a preliminary objection consists of a pure point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a Preliminary Objection may dispose of the suit. “The Court went further to note that:-“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. The improper raising of preliminary objections does nothing but unnecessarily increase costs and, on occasion, confuse the issues, and this improper practice should stop.’’ 8.The notice of Preliminary Objection dated 9th December 2025 is founded on the notion that the suit is improperly before this court as it lacks jurisdiction to entertain the same. It goes without saying that without the requisite jurisdiction a court of law down its tools meaning that the objection, if successful, is capable of finally disposing the whole matter. The objection, therefore, attains the threshold of a pure preliminary point of law. 9.The argument is that the issues raised in the suit are commercial in nature and ought to be filed in the high court which argument the Plaintiffs have discredited indicating that the cause of action revolved around the validity of the documents used to create the charge and further charge dated 19th June 2018 and 13th September 2018 respectively and subsequently the transfer of the suit property based off the statutory power of sale created by the charge and further charge. 10.The Environment and Land Court is a creation of Article 162 (b) of the Constitution which donates to parliament the power to establish courts with the status of the High Court to hear and determine disputes relating to the Environment and the use and occupation of and title, to land. The Environment and Land Court Act at Section 13 defines the jurisdiction of the court thus;1.The Court shall have original and appellate jurisdiction to hear and determine all disputes in accordance with Article 162(2)(b) of the Constitution and with the provisions of this Act or any other law applicable in Kenya relating to environment and land.2.In exercise of its jurisdiction under Article 162(2)(b) of the Constitution, the Court shall have power to hear and determine disputes―a.Relating to environmental planning and protection, climate issues, land use planning, title, tenure, boundaries, rates, rents, valuations, mining, minerals and other natural resources;b.Relating to compulsory acquisition of land;c.Relating to land administration and management;d.Relating to public, private and community land and contracts, choses in action or other instruments granting any enforceable interests in land;e.And any other dispute relating to environment and land. 11.It is now fairly well settled that arising from the holding in case cited by both the all parties Cooperative Bank of Kenya Vs Patrick Kangethe Njuguna (2017) eKLR the High Court is the proper forum to litigate accounting matters owing to its unlimited original jurisdiction in Civil Matters.However, there are instances where there are overlapping mandates such as in the instant case. Faced with such a case Ngugi J ( as he then was ) in the case of Suzane Butler and 4 others Vs Redhill Investors and another (2017) eKLR stated “When faced with a controversy whether a particular case is a dispute about land (which should be litigated at the ELC) or not, the Courts utilize the Pre-dominant Purpose Test: In a transaction involving both a sale of land and other services or goods, jurisdiction lies at the ELC if the transaction is predominantly for land, but the High Court has jurisdiction if the transaction is predominantly for the provision of goods, construction, or works.The Court must first determine whether the pre-dominant purpose of the transaction is the sale of land or construction. Whether the High Court or the ELC has jurisdiction hinges on the predominant purpose of the transaction, that is, whether the contract primarily concerns the use, of land or, in this case, the construction of a townhouse. For the court to make this determination, the pleadings provide useful guidance. 12.The substrum of the Plaintiff’s case revolves around the charge instruments registered by the 1st Defendant in respect to the 1st Plaintiff’s parcel of land LR Nairobi/Block 15/613. The Plaintiff’s case raises the issue of validity of the charge instrument on account of forgery of the Plaintiff’s signature on the charge instruments. The focus of the Plaintiff’s claim can easily be deduced from the pleadings and the reliefs sough in the plaint. The plaint seeks the following orders;i.A declaration that the Charge dated 19th June 2018 and Further Charge dated 13th October, 2018 registered in respect of the property is illegal, null and void and therefore incapable of registration and/or enforcement;ii.An order directing the 5th Defendant to cancel the Charges registered over the property as Legal Charge dated 19th June 2018 and registered at the Government Lands Registry, Nairobi as Presentation No. 2102; Volume N88; Folio 209/37; File 12873 on 31% October, 2018 and Further Legal Charge dated 13th September 2018 and registered at the Government Lands Registry, Nairobi as Presentation No. 2656; Volume N88; Folio 209/38; File 12873;iii.A permanent Injunction restraining the Defendants whether by themselves, their agents, servants, auctioneers or advocates or any of them or otherwise from selling, dealing, interfering, advertising or offering for sale, or purporting to sell or in any other way alienating the immovable property known as Nairobi/Block 15/613 whose Title was formerly contained in an Indenture dated 25th June 1993 and registered at the Government Lands Registry as Volume N.50 Folio 305/31 File 12873(formerly Land Reference Number 330/475);iv.A declaration that the registration of the Transfer by Chargee of Nairobi/Block 15/613 whose Title was formerly contained in an Indenture dated 25th June 1993 and registered at the Government Lands Registry as Volume N.50 Folio 305/31 File 12873 (formerly Land Reference Number 330/475) and the issuance of a title in favour of the 3 Defendant is unlawful, illegal, null and void ab initio and therefore ought to be expunged from the Land Register;v.An Order directing the 5th Defendant, the Chief Land Registrar, to cancel the registration of the Transfer by Chargee in favour of the 3rd Defendant from the Land Register, cancel any title in respect of the property that may have been issued in favour of the 3" Defendant or any other party, and revert the title to the 1" Plaintiff;vi.An order directing that possession of the property be returned and/or restored to the Plaintiffs.vii.An order compelling the 5th Defendant to restore the 1st Plaintiff as the registered proprietor of Nairobi/Block 15/613 whose Title was formerly contained in an Indenture dated 25th June 1993 and registered at the Government Lands Registry as Volume N.50 Folio 305/31 File 12873 (formerly Land Reference Number 330/475) and to issue a Title in respect of the said property in the name of the 1% Plaintiff.viii.A permanent injunction restraining the Defendants whether by themselves, their agents, servants, auctioneers or advocates or any of them from interfering with the Plaintiffs’ quiet possession and occupation of the property, the OCS Muthangari Police Station to enforce this Order.ix.General damages.x.Costs of the suit. 13.These are issues which are clearly within the jurisdiction of this court as defined by Article 162(2)b and Section 13 of the Environment and Land Court Act.Final dispositionIn view of the foregoing I hereby issue the following orders;i.That the Notice of Preliminary Objection dated 9th December 2025 lacks merit and is hereby dismissed.ii.Costs to abide the determination of the main suit.It is so ordered. DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI ON THIS 11TH DAY OF JUNE 2026.MOHAMMED N. KULLOWJUDGERuling delivered in the presence of: -N/A for the PlaintiffMr. Sikarga for 1st and 2nd DefendantMs. Waithiengeni for 3rd DefendantN/A for 4th and 5th DefendantsPhilomena W . Court Assistant