https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12332

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA** **AT NAKURU** **COMMERCIAL AND TAX DIVISION** **HCCOMMMISC E008 OF 2026** EXTREECON ENGINEERING COMPANY LIMITED.......APPLICANT VERSUS THE PRINCIPAL SECRETARY, STATE DEPARTMENT FOR HOUSING & URBAN DEVELOPMENT SOUTH REGIONAL OFFICE……………………………………………...… 1ST RESPONDENT THE HONOURABLE ATTORNEY GENERAL.…. 2ND RESPONDENT TEJ ARCHITECTS.......................………….…… 3RD RESPONDENT **RULING** 1. The Applicant filed a Notice of Motion dated 12th May 2026, brought under Sections 7 and 17(1) of the Arbitration Act, 1995, Rule 2 of the Arbitration Rules, 1997, Section 3A of the Civil Procedure Act and Order 40 and 46 of the Civil Procedure Rules, seeking conservatory and injunctive orders restraining the Respondents from acting upon a letter dated 7th May, 2026 issued by the 3rd Respondent and a letter dated 2nd May, 2026 issued by the 1st Respondent, and an interim measure of protection under Section 7 of the Arbitration Act preserving the status quo of the parties' engagement pending reference of the dispute to arbitration. 2. The Application is supported by the Affidavit of Luke Owino Mang'ongo, the Applicant's Managing Director, sworn on 12th May, 2026. The gravamen of the Applicant's case is that it was the lawful contractor under Contract No. MLPWHUD/SDHUD/UDD/245/2023-2024-Cluster 51, for the construction of ESP Markets in Nakuru County, at a contract sum of Kshs. 147,766,679.00; that it had achieved 59.33% progress against payment of only 27.3% of value certified; and that the Respondents, through the 3rd Respondent's letter of 7th May 2026, purported to terminate the contract and convene a Joint Re-Measurement Exercise on 14th May 2026 preparatory to re-tendering the outstanding works, notwithstanding that the 3rd Respondent's own appointment as "Supervising Consultant" is impugned as procedurally irregular. 3. The Respondents responded by filing a Notice of Preliminary Objection dated 5th June, 2026 raising five grounds, namely: (i) that the Court's jurisdiction is ousted by Section 10 of the Arbitration Act in light of the mandatory arbitration clause at Clause 20.6 of the General Conditions of Contract; (ii) that the Applicant's failure to commence or show imminent intent to commence arbitral proceedings renders the Section 7 application fatally premature; (iii) non-disclosure of material facts, namely default notices dated 10th March 2025, 21st May 2025, 12th June 2025 and 19th August 2025, and the expiry of the performance guarantee; (iv) abuse of the court process designed to frustrate the Respondents' duty under Article 201 of the Constitution to safeguard public funds; and (v) that the Applicant has failed to establish a prima facie case. 4. By consent, and pursuant to the directions of the Court, the Preliminary Objection was canvassed by way of written submissions. 5. The sole issue for determination is whether the Notice of Preliminary Objection dated 5th June 2026 meets the threshold of a proper preliminary objection and, if so, whether it has merit. 6. The locus classicus on what constitutes a preliminary objection remains **Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696,** where Sir Charles Newbold, P., defined it as follows: *"****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... 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 had to be ascertained or if what is sought is the exercise of judicial discretion."*** 1. This test has been consistently applied and refined. In **Nickson v Makhanu & 3 Others (Environment & Land Case E001 of 2024) [2024] KEELC 5689 (KLR),** the Court reaffirmed that where determination of an objection requires the Court to venture into deducing issues from evidence outside the pleadings, or to make findings on contested questions such as the authenticity of a signature or the provenance of a document, the objection ceases to be a true preliminary objection and cannot be resolved on assumed facts. 2. Similarly, in **Mutuku v Waema & 5 Others (Sued as Administrators of the Estate of Mangu Ngolo (Deceased)) [2024] KEELC 7524 (KLR)**, the Environment and Land Court at Machakos, citing the Supreme Court's decision in **John Florence Maritime Services Limited & Another v Cabinet Secretary Transport & Infrastructure & 3 Others [2021] KESC 39 (KLR),** declined to entertain grounds of res judicata and limitation raised as a preliminary objection where they turned on disputed questions of fact requiring the ascertainment of evidence, holding the objection to be an abuse of the court process. 3. Additionally, where a party invokes the jurisdiction of the Court, the observations of Nyarangi, JA in Owners of Motor Vessel "Lillian S" v Caltex Oil (Kenya) Ltd [1989] KLR 1, relied upon by the Respondents, remain apposite: jurisdiction is everything, and a court without jurisdiction must down its tools. A challenge to subject-matter jurisdiction is accordingly always a proper subject of a preliminary objection. The difficulty for the Respondents, as will be seen below, is not whether jurisdiction may be raised by way of preliminary objection, but whether each of the five grounds pleaded is truly a jurisdictional or other pure point of law, as opposed to a matter requiring proof or the exercise of discretion. 10. The Respondents contend that the contract dated 1st March, 2024 contains a mandatory arbitration clause (Clause 20.6), and that Section 10 of the Arbitration Act — which provides that "except as provided in this Act, no court shall intervene in matters governed by this Act" — ousts the Court's jurisdiction. 11. This ground is correctly raised by way of preliminary objection, since it is a pure question of statutory interpretation argued on the assumption that the facts pleaded by the Applicant are correct. It does not, however, survive scrutiny on the merits. Section 7(1) of the Arbitration Act expressly provides that 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." Section 7 is thus itself one of the exceptions contemplated by the opening words of Section 10 — "except as provided in this Act" — and an arbitration clause, however mandatory, does not divest the High Court of the concurrent jurisdiction to grant interim measures of protection in aid of the arbitration. 11. This position was affirmed by the Court of Appeal in **Safaricom Limited v Ocean View Beach Hotel Limited & 2 Others [2010] eKLR,** which held that the High Court may issue orders to preserve evidence, protect assets, or otherwise maintain the status quo during or before the commencement of arbitration, without derogating from the arbitral tribunal's eventual jurisdiction over the merits. The same principle was recently applied in **Wuk & 2 Others v Roberts & Another (Commercial Arbitration Appeal E002 of 2024) [2025] KEHC 12102 (KLR)**, where the High Court, citing **Infocard Holdings Limited v Attorney General & 2 Others [2014] eKLR** and **CMC Holdings Limited v Jaguar Land Rover Exports Limited [2013] eKLR,** reiterated that the purpose of Section 7 is to ensure the subject matter of the arbitration is not jeopardised before an award is issued, and that in exercising this jurisdiction the Court does not intrude upon the merits reserved for the arbitral tribunal. 12. Ground 1 accordingly fails. The existence of an arbitration clause does not, without more, oust the jurisdiction invoked by the Applicant; it is the very premise upon which Section 7 jurisdiction is founded. 13. The Respondents' second ground is that the Applicant has not commenced arbitration, issued a notice of dispute, or nominated an arbitrator, and that the application is accordingly "a standalone application floating in a legal vacuum." They rely on **Safaricom Limited v Ocean View Beach Hotel Limited & 2 Others (supra)** for the proposition that interim measures under Section 7 must be strictly tethered to existing or demonstrably imminent arbitral proceedings. 14. This ground cannot be resolved as a pure point of law. Whether arbitration is imminent, and whether the threat to the subject matter of the intended arbitration is real, are questions that turn entirely on the evidence before the Court — here, the Applicant's deposition at paragraphs 11, 25 and 26 of the Supporting Affidavit that it has a bona fide intention to commence arbitration under Clause 20.6, and the letters of protest dated 10th May 2026 invoking Clause 3.2.2(b) of the General Conditions of Contract. Assessing whether that evidence discloses the requisite imminence, and if so what duration should attach to any interim order, is precisely the exercise the Court of Appeal contemplated in Safaricom (supra) when it directed that, where a measure is sought before arbitration commences, the Court must fix its duration by reference to the facts — an evidentiary and discretionary exercise, not a preliminary point. 15. Moreover, the Respondents' premise — that Section 7 may only be invoked after arbitration has formally commenced — is not an accurate statement of the law. Section 7(1) itself contemplates measures sought "before or during arbitral proceedings." As affirmed in the CMS Expert Guide to International Arbitration in Kenya and consistently in Kenyan practice, the Court's power under Section 7 extends to the period before arbitration is commenced, provided the applicant demonstrates a bona fide intention to arbitrate. Whether that intention has in fact been demonstrated on the facts of this case is not a matter this Court can resolve without regard to the affidavit evidence it is a live issue for the substantive hearing of the Notice of Motion, not a threshold objection capable of disposing of the Application in limine. 16. Ground 2 therefore does not meet the Mukisa Biscuit threshold and is not a proper preliminary objection. 17. The Respondents contend that the Applicant suppressed the existence of default notices dated 10th March 2025, 21st May 2025, 12th June 2025 and 19th August 2025, and the expiry of its performance guarantee, relying on Uhuru Highway Development Ltd v Central Bank of Kenya [1995] eKLR for the proposition that a party who approaches the Court under a cloud of concealment disentitles itself to equitable relief. 18. This ground is quintessentially factual. It requires the Court to examine the affidavit record, determine what was or was not disclosed, assess the materiality of the alleged omissions, and weigh them against the Applicant's own account of its dealings with the Respondents (including its case that non- payment of IPCs and delayed responses to its extension-of-time request are what impeded timely completion). The Applicant, for its part, has expressly and vehemently denied the allegations in its written submissions, asserting that this ground "does not emanate from a point of law as it can only be determined through the analysis of facts." That is correct. As held in Nickson v Makhanu (supra) and Mutuku v Waema (supra), an objection whose resolution depends on contested affidavit evidence is not a preliminary objection properly so called, however framed. 19. Ground 3 accordingly fails to meet the threshold for a preliminary objection. 20. The Respondents submit that the Application is a tactical manoeuvre to forestall lawful contractual remedies and to "lock in public funds" contrary to 21. Article 201 of the Constitution, relying on Muchanga Investments Ltd v Safaris Unlimited (Africa) Ltd & 2 Others [2009] eKLR, where abuse of process was described as the intentional deployment of the machinery of the court for an improper or collateral purpose. 22. The very authority relied upon by the Respondents confirms that a finding of abuse of process turns on an assessment of a litigant's purpose and conduct an inherently fact-specific inquiry that cannot be undertaken on the assumed correctness of the Applicant's pleaded case, as Mukisa Biscuit requires for a preliminary objection. Indeed, this ground substantially overlaps with the merits of the underlying dispute: whether the Respondents' termination and re-measurement steps were lawfully and validly triggered, and whether the 3rd Respondent's appointment as Supervising Consultant was itself procedurally regular, are contested questions that go to the heart of the Notice of Motion and cannot be resolved as a threshold matter. 23. Ground 4 is accordingly not a proper preliminary objection. 24. Finally, the Respondents contend that the Applicant has not met the sequential test in Giella v Cassman Brown & Co. Ltd [1973] EA 358, as restated in Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR, and that absent a prima facie case, the balance of convenience does not arise. 25. This ground could not be more clearly discretionary and evidentiary in character. The Giella test — prima facie case, irreparable harm, and balance of convenience — requires the Court to weigh the competing affidavits, assess the strength of each party's case, and exercise judicial discretion. This is the very exercise Mukisa Biscuit places beyond the reach of a preliminary objection: "It cannot be raised... if what is sought is the exercise of judicial discretion." The question whether the Applicant has established a prima facie case, and where the balance of convenience lies as between a contractor asserting substantial performance and public entities asserting a right to safeguard public funds, is properly a matter for determination at the substantive inter partes hearing of the Notice of Motion, on full consideration of the rival affidavits. 26. Ground 5 therefore does not qualify as a preliminary objection and, in any event, is premature for determination at this stage. 27. Of the five grounds pleaded, only Ground 1 (ouster of jurisdiction under Section 10) is properly raised as a preliminary objection, being a pure point of law argued on the assumption that the Applicant's pleaded facts are correct. It fails on the merits, since Section 7 of the Arbitration Act is itself the statutory exception contemplated by Section 10, and the existence of an arbitration clause does not oust the High Court's concurrent jurisdiction to grant interim measures of protection in aid of arbitration — a position settled in Safaricom Limited v Ocean View Beach Hotel Limited & 2 Others (supra) and recently reaffirmed in Wuk & 2 Others v Roberts & Another [2025] KEHC 12102 (KLR). 28. Grounds 2, 3, 4 and 5 do not meet the Mukisa Biscuit threshold. Each requires the Court to ascertain disputed facts — whether arbitration is imminent, what was or was not disclosed, whether the Application was brought for an improper purpose, and whether a prima facie case with a probability of success has been established — or to exercise judicial discretion in weighing the balance of convenience. None of these are "pure points of law" capable of disposing of the Application in limine. 29. This conclusion is fortified by the decisions in Nickson v Makhanu & 3 Others [2024] KEELC 5689 (KLR) and Mutuku v Waema & 5 Others [2024] KEELC 7524 (KLR), both of which decline to treat objections dependent on contested facts as valid preliminary objections, and is consistent with the general caution — expressed in Bashir Haji Abdullahi v Adan Mohammed Noor & 3 Others [2004] eKLR and Susan Wairimu Ndiangui v Pauline W. Thuo & Another [2005]eKLR — against improperly raising factual or discretionary matters as preliminary points. 30. For the avoidance of doubt, the dismissal of Grounds 2 to 5 as improper preliminary objections is a determination on their procedural competence only. It does not foreclose the Respondents from urging the same matters — including the alleged non-disclosure, the state of readiness to arbitrate, and the balance of convenience — in opposition to the Notice of Motion at the substantive inter partes hearing, where they may properly be weighed on the full affidavit evidence. **In the End** 1. The Notice of Preliminary Objection dated 5th June, 2026 is hereby dismissed in its entirety. 2. Costs of the Preliminary Objection is given to the Applicant. 3. The Notice of Motion dated 12th May 2026 to be heard on its merits. **Dated, signed and delivered at Nakuru this 30th day of July, 2026.** **J. K. SERGON** **JUDGE** **In the presence of:** Rutoh CA Miss Terer holding brief for Simiyu for Applicant