https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3148

Ngwawe v Faulu Microfinance Bank Limited (Environment and Land Appeal E004 of 2025) [2026] KEELC 3148 (KLR) (6 May 2026) (Ruling) Neutral citation: [2026] KEELC 3148 (KLR) Republic of Kenya In the Environment and Land Court at Bungoma Environment and Land Appeal E004 of 2025 AK Bor, J May 6, 2026 Between Crispine Ochieng Ngwawe Appellant and Faulu Microfinance Bank Limited Respondent Ruling 1.During the hearing of this appeal, the court asked parties to address it on the question of this court’s jurisdiction to hear and determine the appeal. Parties filed supplementary submissions on the question of jurisdiction. The Appellant submitted that through the amended plaint dated 11/2/2022, he filed suit seeking an order to compel the Respondent to render an account for the proceeds of the sale of Ndivisi/Muchi/3406 and Ndivisi/Muchi/3407 (the suit land) and compensation for the loss occasioned by the auction of the two parcels of land. He also sought the taking of accounts and a declaration that the unilateral revision of interest rate from 21% to 23% was punitive and void. The background to the Appellant’s claim was that he took a loan from the Respondent on 20/9/2015, which was secured by the suit land. When he defaulted in repaying the loan, the Respondent proceeded to sell Ndivisi/Muchi/3407. That is what prompted the Appellant to file the suit before the court. In the judgment delivered on 15/1/2025, the Learned Magistrate agreed with the Appellant that the sale of Ndivisi/Muchi/3407 was unlawful and ordered the Respondent to compensate the Appellant to the tune of Kshs. 3,000,000/= for the loss he suffered as a result of that sale. 2.The Appellant analyzed the decision in Cooperative Bank of Kenya Limited v Kang’ethe Njuguna & 5 others in which the Court of Appeal emphasized that the jurisdiction of the ELC to deal with disputes relating to contracts under Section 13 of the Environment and Land Court (ELC) Act did not include mortgages, charges, collection of dues and rent which fell within the jurisdiction of the High Court. The Appellant relied on Article 162 (2) (b) of the Constitution and Section 13 of the ELC Act. He also cited Section 150 of the Land Act and Section 101 of the Land Registration Act, which empower the ELC to hear and determine disputes, actions and proceedings concerning land under the two statutes. He maintained that the jurisdiction of the ELC covered all instruments created under the two statutes including charges and that by extension, the process of the sale by charge that is at the centre of this appeal fell within the jurisdiction of the ELC. 3.The Appellant argued that the dispute fell within the jurisdiction of the ELC and in the event that this court were to find that the dispute was a “mixed grill claim” then it ought to transfer the dispute to the High Court. The Appellant cited various decisions in support of this position. 4.In its submissions, the Respondent argued that for this court to have jurisdiction, the dominant issue must relate to the environment and the use of and occupation of and title to land. It pointed out that the reliefs which the Appellant sought from the trial court had to do with accounts between the Appellant and the Respondent and had nothing to do with occupation or use of the land. Regarding the prayer for compensation, the Respondent argued that the Appellant needed to tender the evidence regarding the forced sale value of the suit land and the amount sought before the court could determine whether the sale was proper and whether compensation was payable to him. The Respondent submitted that these would require mathematical computations, which do not form part of this court’s jurisdiction. 5.The Respondent cited Cooperative Bank Limited v Patrick Kang’ethe Njuguna & 5 Others (2017) KECA 79 (KLR) where the Court of Appeal held that a charge did not constitute use of land. The Respondent also relied on Kinuthia v Kanyi & another 2024 KEELC 1625 (KLR) where the learned judge of the ELC stated that the High Court had jurisdiction to deal with the dispute if the predominant issue was the exercise of the statutory power of sale by a chargee. The Respondent argued that this court lacked jurisdiction to entertain the appeal and that it should down its tools, strike out the appeal and award it costs. 6.The issue for determination is whether this court has jurisdiction to deal with the appeal. The genesis of this dispute is that the Appellant took a loan from the Respondent in 2015 and offered the title deeds over the suit land as security for the loan. The Respondent realised the security when the Appellant failed to repay the loan. The Appellant filed suit seeking to compel the Respondent to render an account of the sale proceeds of the suit land and compensation for the loss he claimed to have suffered when his land was auctioned by the Respondent. Additionally, he sought to have the accounts taken and challenged the Respondent’s increment of the interest rate from 21% to 23% terming it punitive and void. These claims fall outside the jurisdiction of this court. The dispute is not over the use or occupation of or title to land. 7.The appeal is transferred to the High Court for hearing and determination. DELIVERED VIRTUALLY AT BUNGOMA THIS 6TH DAY OF MAY 2026.K. BORJUDGEIn the Presence of:-Mr. Hammerton Maloba for the AppellantMr. Samuel Kamau for the RespondentCourt Assistant –Josephat Bett