[2024] KEELC 6589 (KLR)

Bin Daud Limited v Mitoko & another (Environment & Land Case E227 of 2023) [2024] KEELC 6589 (KLR) (3 October 2024) (Ruling)

Neutral citation: [2024] KEELC 6589 (KLR)

Republic of Kenya

In the Environment and Land Court at Nairobi

Environment & Land Case E227 of 2023

LN Mbugua, J

October 3, 2024

Between

Bin Daud Limited

Applicant

and

Micah Haydn Mitoko

Respondent

and

Grace Jane Ohayo-Mitoko

Defendant

Ruling

1. Before me is the Plaintiff’s Chamber Summons Application dated 22. 12. 2023 where the plaintiff applicant seeks the following orders;“i.That pending interpartes hearing and determination of his application, temporary injunction be and is hereby ordered restraining the Defendants by themselves, their agents, employees, servants and/or anyone acting under their instructions from harassing, unlawfully evicting, repossessing, re-entering, levying distress and/or in any manner whatsoever interfering with the Plaintiffs’ quiet occupation and lawful enjoyment of the shops in the suit premises at L.R No. 12553/6, Karen, Nairobi.ii.That pending reference of the dispute for arbitration and hearing and determination of the dispute in the arbitral proceedings an order of temporary injunction be and is hereby issued restraining the Defendants by themselves, their agents, employees, servants and/or anyone acting under their instructions from harassing, unlawfully evicting, repossessing, re-entering, levying distress and/or in any manner whatsoever interfering with the Plaintiffs’ quiet occupation and lawful enjoyment of the shops in the suit premises at L.R No. 12553/6, Karen, Nairobi.ii.That the dispute herein between the parties be referred to the arbitration under Clause 23. 3 of the Lease.”

2. The application is premised on the grounds on the face of the application and the supporting affidavit and supplementary affidavit of the applicant. He contends that the respondents are the registered owners of the suit premises L.R 12553 which they leased to the applicant vide a lease dated 22. 4.2022 for a period of 25 years. That the applicant has spent over two million in developing the property for a period of over 2 years, and he only commenced full operations 2 months ago. Adding that Rubis Energy had agreed to brand the station, but they have temporarily removed their equipment pending the resolution of the dispute between the landlord (read defendants) and the tenants (read the plaintiff).

3. He contends that the defendants want to use a debt of Ksh. 800,000 to take over the developments and argues that clause 23. 3 of the lease provides for arbitration in the event of a dispute.

4. The applicant contends that the respondents had commenced distress for rent proceedings despite the fact that on 5. 3.2024, they paid sh.11, 200 000 as rent upto 1. 10. 2024.

5. In opposition to the application, the respondents filed Grounds of opposition dated 6. 2.2024, a replying affidavit as well as a Further affidavit sworn by the 1st respondent on 19. 7.2024. It is argued that this suit was filed after another case misc E140 of 2023 had already been filed by the respondents. In the Further affidavit, the 1st respondent avers that the other case 140 of 2023 has since been withdrawn.

6. They aver that the lease was terminated on 18. 12. 2023 and they then issued a notice to vacate in accordance with Section 152 of the Land Act.

7. I have considered all the issues raised herein including the submissions of the parties. There is no controversy that the protagonists had entered into a lease agreement dated 22. 4.2020. The applicants desire that the dispute be referred to arbitration, while the respondents contend that there is no lease, the same having been terminated. At this stage of the proceedings, the court cannot delve into the validity of the lease, seeing that the court is not dealing with the substantive issue of the dispute. The question falling for determination is whether the dispute should be referred to arbitration, whether the subject matter is under threat and whether the court can issue any interim measures of protection.

8. The provisions of Section 7 of the Arbitration Act stipulates that;“(1)It is not incompatible with an arbitration agreement for a party to request from the High Court, before or during arbitral proceedings, an interim measure of protection and for the High Court to grant that measure.(2)Where a party applies to the High Court for an injunction or other interim order and the arbitral tribunal has already ruled on any matter relevant to the application, the High Court shall treat the ruling or any finding of fact made in the course of the ruling as conclusive for the purposes of the application.”

9. The courts have considered applications of this nature contemplated under Section 7 above and provided guidance. In Safaricom Limited v Ocean View Beach Hotel Limited & 2 others [2010] eKLR, the court stated that;“Under our system of the law on arbitration the essentials which the court must take into account before issuing the interim measures of protection are:- 1. The existence of an arbitration agreement. 2. Whether the subject matter of arbitration is under threat. 3. In the special circumstances which is the appropriate measure of protection after an assessment of the merits of the application 4. For what period must the measure be given especially if requested for before the commencement of the arbitration so as to avoid encroaching on the tribunal’s decision making power as intended by the parties.”

10. I find that there is a valid arbitration clause in terms of clause 23. 3. of the lease agreement, thus there is a dispute in which parties exercised their free will to have it resolved through the arbitration platform. That being the case, the court cannot purport to interrogate the other clauses of the lease to determine the nature and extent of breach (if any) of the said lease. To this end, the court is mindful that it should not exceed its jurisdiction and make findings which would fall into the arbitrator’s jurisdiction.

11. In the case of County Government of Kirinyaga v African Banking Corporation Ltd [2020] eKLR, cited in Peema Investments Co. Ltd v Principal Secretary, Ministry of Defence & another [2021] eKLR the court observed that: -“The tenor and import of Article 159(2) (c) of the Constitution as read together with Section 6(1) of the Arbitration Act is that where parties to a contract consensually agree on arbitration as their dispute resolution forum of choice, the courts are obliged to give effect to that agreement…..”

12. While in Euromec International Limited v Shandong Taikai Power Engineering Company Limited (Civil Case E527 of 2020) [2021] KEHC 93 (KLR) (Commercial and Tax) (21 September 2021) (Ruling) Neutral citation: [2021] KEHC 93 (KLR), the court stated that;“Arbitration is a private dispute resolution mechanism whereby two or more parties agree to resolve their current or future disputes by an arbitral tribunal, as an alternative to adjudication by the courts or a public forum established by law. Parties by mutual agreement forgo their right in law to have their disputes adjudicated in the courts/public forum. Arbitration agreement gives contractual authority to the arbitral tribunal to adjudicate the disputes and bind the parties. The arbitration agreement being the product of a consensual contract, I refuse the invitation to “rectify the arbitration clause.” The applicant is inviting the court to venture into the forbidden sphere of re-writing contracts willfully signed by consenting parties”.

13. In the same measure, this court will desist from delving into the merits of the dispute. The court’s intervention ought to be limited only to facilitate the determination of the dispute through the proper forum. To this end, the court takes into consideration that the respondent has apparently accepted rent from the applicant to the tune of over Ksh. 11 million which is meant to cover the period upto 1. 10. 2024. The respondents argue that accepting rent does not amount to reinstating the lease, but at the same time, they state (in the oral submissions) that “the plaintiff is on the property but is unwanted on that land!”. That is actually double speak, or having a cake and eating it at the same time on the part of the respondents.

14. I have no doubts that the subject matter is under threat, of which the respondents admit that much. And it is therefore necessary to grant interim measures of protection.

15. In the final analysis, the court proceeds to give conditional interim measures of protection where by the plaintiff shall not be evicted from the suit property;1. As long as arbitration proceedings are commenced within 60 days from the date of delivery of this ruling.2. The applicant continues to pay the agreed rent.3. The costs of the application shall abide the outcome of the arbitration proceedings.

DATED, SIGNED AND DELIVERED AT NAIROBI THIS 3RD DAY OF OCTOBER, 2024 THROUGH MICROSOFT TEAMS.LUCY N. MBUGUAJUDGEIn the presence of:-Robinson Kigen for ApplicantKairu holding brief for Waithaka for RespondentCourt assistant: Joan