Gathagu & another v Thiongo & 2 others (Environment and Land Miscellaneous Application E358 of 2025) [2026] KEELC 3956 (KLR) (30 June 2026) (Ruling)

Gathagu & another v Thiongo & 2 others (Environment and Land Miscellaneous Application E358 of 2025) [2026] KEELC 3956 (KLR) (30 June 2026) (Ruling) Neutral citation: [2026] KEELC 3956 (KLR) Republic of Kenya In the Environment and Land Court at Nairobi Environment and Land Miscellaneous Application E358 of 2025 CG Mbogo, J June 30, 2026 IN THE MATTER OF: AN APPLICATION UNDER SECTION 7 OF THE ARBITRATION ACT NO. 4 OF 1995 -AND- IN THE MATTER OF: AN APPLICATION FOR INTERIM MEASURE OF PROTECTION PENDING ARBITRATION PROCEEDINGS Between Pauline Wamucii Gathagu 1st Applicant Eric Nzau Makau 2nd Applicant and Christopher Waweru Thiongo 1st Respondent Muigai Thumbi 2nd Respondent Waiyaki Way Developers Limited 3rd Respondent Ruling 1.Before this court for determination is the notice of motion dated 14th November, 2025 filed by the applicants, and it is expressed to be brought under Section 7 of the Arbitration Act, and Section 68 of the Land Registration Act seeking the following orders:-1.Spent.2.That this honourable court be pleased to issue an order of inhibition restraining any dealings with apartment no. A8 on the 2nd floor of Block A erected on title no. Nairobi Block 64/2037, formerly dagoretti/Kangemi/2037 (also known as apartment A8 Block A2) (hereinafter the ‘suit property’) pending the hearing and determination of this application inter partes.3.That this honourable court be pleased to issue an order of inhibition restraining any dealings with the suit property, pending the hearing and determination of the arbitration proceedings. 4.That the chief land registrar, Nairobi district registry is hereby ordered to register an inhibition against the suit property in the appropriate register. 5.That this honourable court be pleased to issue an order directing that all rental income from the suit property be remitted into an escrow account in the names of the 1st respondent and the applicants, or, in the alternative, deposited in this court, pending the hearing and determination of this application and the arbitration proceedings.6.That this honourable court do issue any such further and appropriate orders in the circumstances of this matter as it deems fit.7.That costs of this application be borne by the respondents, jointly and severally. 2.The application is premised on the grounds on its face. It is further supported by the affidavit of the 1st applicant sworn on even date. She deposed that together with the 2nd applicant, they agreed to purchase apartment no. A8 for Kshs.6,500,000 from the 2nd respondent, and that on 24th September 2018, they executed a letter of offer and a deed of assignment. 3.She further deposed that they paid the entire purchase price along with service charges and legal fees to the client account of the project’s advocates, Messrs. Ratemo & Company Advocates, and although construction was meant to be completed by late 2019, the project faced unexpected delays. She added that in 2022, they were informed of an internal arbitration dispute among the developer’s shareholders. 4.The 1st applicant deposed that they later discovered the project advocates’ offices had closed and they could no longer reach the 2nd respondent. Further, that on 16th May, 2024 they reported the matter to Kabete police station where investigations revealed that the internal shareholder arbitration had concluded that shareholders had distributed the units among themselves. In addition, the 1st respondent was collecting rental income from the unit, which was unjust enrichment. 5.In conclusion she urged the court to allow the application as prayed so as to prevent any dealings with the property and have all rental income deposited into an escrow account or with the court. 6.The application was opposed vide the replying affidavit of Shilpa Narendra Hirani, the 3rd respondent’s director sworn on 27th February, 2026. The 3rd respondent deposed that it was the registered owner of L.R. No. Nairobi/Block 64/2037, which had been developed into 264 residential apartment units, and that the company was incorporated as a special purpose vehicle to implement the said development through a shareholders’ agreement. 7.She further deposed that the 3rd respondent did not receive the purchase price for the applicant’s unit since the money was not payable to them as their role was strictly limited to construction. Equally, the 3rd respondent had no automatic obligation to transfer the unit to the applicants. She added that lawful transfer was contingent upon compliance with internal allocation procedures, settlement of all financial outgoings and a receipt of formal written instructions from the 1st respondent authorizing the transfer. 8.The 3rd respondent deposed that it had no intention of disposing the property to defeat arbitration, and further, that there was no tenancy agreement between the 3rd respondent and the applicants. It was deposed that granting the requested orders would interfere with the developer's proprietary and management rights. 9.The application was canvassed through written submissions. The applicants filed their written submissions dated 18th April, 2026. By the time of writing this ruling, the 3rd respondent had not filed its written submissions. I have considered the application, the replying affidavit and the submissions thereof. The issue is whether the applicants have satisfied the criteria for grant of an interim measure of protection pending completion of arbitral proceedings. 10.The jurisdiction of this court to grant an interim measure of protection is provided for under Section 7(1) of the Arbitration Act which provides as follows:-“(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.” 11.In the case of Safaricom Limited V Ocean View Beach Hotel Limited & 2 others [2010] KECA 346 (KLR) the court held as follows:“An interim measure of protection such as that sought in the matter before us is supposed to be issued by the court under Section 7 in support of the arbitral process not because it satisfies the civil procedure requirements for grant of an injunction…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 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” 12.In the present application, it is not in dispute that on 24th September, 2018 the applicants signed a deed of assignment with the 1st respondent for the sale and transfer of one unit located on Dagoretti/Kangemi/2037. It is also not in dispute that the applicants paid the purchase price in full and that the respondents were still yet to comply with the terms of the agreement in delivering vacant possession to the applicants. 13.It was the applicants’ case that they continue to suffer loss since the 1st respondent collects rent on the said unit despite them having fulfilled their obligations in purchasing the unit. The 3rd respondent being the developer contends that they did not receive the purchase price of the unit from the applicant since their role was solely construction. 14.Notably, the 1st respondent did not file any response to the instant application. I have perused the said deed of assignment, and it is not in contention that in the event a dispute arising between the parties to the agreement, clause 9 provided that the same be handled by a single arbitrator. The frustrations expressed by the applicants are clear, since despite the project having been scheduled to be completed on 30th June 2019, the same has since stalled to their detriment. 15.In the case of Progressive Credit Limited V Mombasa Trade Centre Limited [2022] eKLR it was held as follows:“18.The roadmap to arbitration has been invoked by the plaintiff in its letter to defendant dated 7th August, 2021 which says, ‘Take notice that of you fail to accede to out notice we will have no option other than to refer this dispute to arbitration as per clause 3.18 of the lease agreement. For the avoidance of doubt, consider this as our notice to intent to refer this dispute to arbitration under the aforesaid clause.’ Clause 3.15 of the lease provides for service of notices under the lease; in my view, the plaintiff’s letter dated 7th August, 2021 was in accordance with the clause and suffices as duly served notice. I find that the letter was the first avenue, stem and clear “Modus Operandi” in commencing the process of putting in place an arbitration process.19.The parties agreed to have all their disputes, questions touching on the lease its construction or application or their rights and liabilities towards it be heard and determined by a single arbitrator, whose decision shall be final, conclusive and binding on the parties. I find that the dispute on how to terminate the lease and the rights and liabilities of either parties during termination can only be determined by a single arbitrator pursuant to the terms under Clause 3.18 of the lease agreement.20.The upshot of the above detailed analysis and looking at the material presented before this honourable court by the plaintiff, I am persuaded that the conditions for grant of a protective measures pending arbitration have been well established.” 16.In the instant suit, parties had agreed to have all their disputes on issues touching the sale of the suit property be determined by way of arbitration. It is this court’s view that the applicants have established the conditions requisite for the grant of protective measures pending arbitration and therefore the notice of motion application dated 14th November, 2025 is merited. Consequently, the same is allowed as follows:i.An order of inhibition is hereby issued restraining any dealings with the suit property, pending the hearing and determination of the arbitration proceedings.ii.The chief land registrar, Nairobi district registry is hereby ordered to register an inhibition against the suit property in the appropriate register.iii.I hereby direct that all the rental income from the suit property be remitted into an escrow account in the names of the 1st respondent and the applicants, pending the hearing and determination of the arbitration proceedings.iv.Each party to bear its own costs.It is so ordered. DATED, SIGNED & DELIVERED VIRTUALLY THIS 30TH DAY OF JUNE, 2026.HON. MBOGO C.G.JUDGE30/06/2026.In the presence of:Ms. Benson Agunga - Court assistantMr. Komu holding brief for Ms. Wambugu the ApplicantsMr. Musungu Onesmus holding brief for Mr. Tito for the 3rd RespondentNo appearance for the 1st and 2nd Defendants/Respondents