[2022] KEBPRT 61 (KLR)
The Tribunal found that the tenancy agreement between the parties expired on 31st May 2017 and was not renewed, resulting in a controlled periodic tenancy as per section 60(2) of the Land Act, 2012. The Tribunal held that the arbitration clause in the expired agreement ceased to have effect upon conversion to a...
Source-derived case information.
- Citation
- [2022] KEBPRT 61 (KLR)
- Parties
- Respondent: Jane Wangari Mburu; Respondent: Alex Macharia Mburu; Respondent: Patrick Kimani; Respondent: Simon Thumbi Mburu; Applicant: Winfred Mworia Thanja
- Court
- Business Premises Rent Tribunal
- Jurisdiction
- Kenya
- Case Number
- Tribunal Case 998 of 2020
- Procedural Posture
- Stay Application / Ruling on Application to Stay Proceedings and Refer Dispute to Arbitration
- Outcome
- application dismissed with costs; matter to proceed on merits before the Tribunal
- Legal Topics
- Controlled Tenancy, Arbitration Clauses, Periodic Tenancy, Stay of Proceedings
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Jane Wangari Mburu
Respondent
Alex Macharia Mburu
Respondent
Patrick Kimani
Respondent
Simon Thumbi Mburu
Respondent
Winfred Mworia Thanja
Applicant
Procedural Posture
Stay Application / Ruling on Application to Stay Proceedings and Refer Dispute to Arbitration
Legal Issues
- 1 Whether the proceedings should be stayed and the dispute referred to arbitration as per the tenancy agreement.
- 2 Whether the arbitration clause in the tenancy agreement remains effective after expiry of the fixed term and conversion to a controlled tenancy.
- 3 Whether the tenant is estopped from seeking arbitration after participating in tribunal proceedings.
Ratio Decidendi
The Tribunal found that the tenancy agreement between the parties expired on 31st May 2017 and was not renewed, resulting in a controlled periodic tenancy as per section 60(2) of the Land Act, 2012. The Tribunal held that the arbitration clause in the expired agreement ceased to have effect upon conversion to a controlled tenancy. Furthermore, the tenant had actively participated in the Tribunal proceedings, filed pleadings, and entered into consents, thereby waiving any right to insist on arbitration under section 6(1) of the Arbitration Act, 1995. The Tribunal relied on the principle that a party who takes substantive steps in proceedings cannot later seek to invoke an arbitration...
Court Disposition
application dismissed with costs; matter to proceed on merits before the Tribunal
Orders
- The application dated 2nd January 2021 is dismissed with costs.
- The matter shall proceed to determination on the merits before the Tribunal.
Full Case Text
Judgment text and source record
48 paragraphs
REPUBLIC OF KENYA
BUSINESS PREMISES RENT TRIBUNAL
VIEW PARK TOWERS 7TH & 8TH FLOOR
TRIBUNAL CASE NO. 998 OF 2020 (NAIROBI)
JANE WANGARI MBURU........................................... LANDLORD/1ST RESPONDENT
ALEX MACHARIA MBURU........................................LANDLORD/2ND RESPONDENT
PATRICK KIMANI........................................................LANDLORD/3RD RESPONDENT
SIMON THUMBI MBURU...........................................LANDLORD/4TH RESPONDENT
VERSUS
WINFRED MWORIA THANJA....................................................TENANT/APPLICANT
RULING
1. The instant proceedings were instituted by the landlords on 16th December 2020 seeking in material part vacant possession against the tenant in respect of plot no. 100, Kitengela Township on account of non-payment of rent and desertion of the business premises. It is further sought that the landlords be allowed to dispose the tenant’s tools of trade to recover the rent plus electricity bill amounting to Kshs.1,131,847/- as at December 2020.
2. On 6th January 2021, the tenant filed an application dated 2nd January 2021 seeking to stay the proceedings in relation to this case and refer the matter to arbitration as per clause 5(c ) of the tenancy agreement.
3. On 6th January 2021, both parties appeared before this Tribunal and the 1st landlord argued the application dated 16th December 2020 whereupon the tenant applied for leave to file a response. Leave was granted and he filed the replying affidavit on 8th January 2021.
4. On the same day, the matter came up before court in the presence of both parties and the tribunal ordered the premises to be reopened forthwith and the landlord to regain access. In default of the tenant failing to allow access by the landlord into the premises, the landlord was authorized to break into the premises under supervision of OCS, Kitengela Police Station. The order was clarified not to be an eviction one but meant to allow the landlord unfettered access to correct the leakage and sewer system.
5. On 10th February 2021, the application dated 15th December 2020 was fixed for hearing on 11th March 2021. The parties indicated that they were engaging with a view of settling the matter. They were to procure an independent valuer to undertake valuation of rent and property. As such the application was adjourned for mention on 8th April 2021 to see if a settlement would have been reached.
6. On 8th April 2021, the landlord’s advocate indicated that the independent valuer had visited the premises and requested for 14 days for the report to be ready. The tenant concurred with the application and as such the matter was fixed for mention on 6th May 2021.
7. On 6th May 2021, the landlord’s advocate indicated that the valuation report was not ready as the tenant did not avail himself on the date they were to meet. As a result the court ordered that the valuation report be complied with or without the tenant’s input. The matter was ordered to be mentioned on 19th May 2021.
8. When the matter came up on 19th May 2021, the 1st Landlord/Applicant applied for 2 more weeks to enable her pay for the valuation report which was ready. The tenant’s counsel had no objection thereto. Mention was fixed for 3/6/2021.
9. On 3rd June 2021, the matter came up in court for mention to confirm filing of the valuation report and the same was indeed confirmed. Hearing of the matter was fixed for 30th June 2021.
10. On 30th June 2021, the Tribunal was not sitting and as such, the matter was fixed for hearing on 12th August 2021. On the said date, hearing could not proceed as the tenant had not been served with a hearing notice. As such it was again adjourned to 6th October 2021.
11. On 6th October 2021, the tenant’s counsel indicated that there was an application to refer the matter to arbitration dated 2/1/2021 and that no response had been filed thereto. The court directed that the said application be served upon the landlord’s counsel who was to file a response in 7 days upon service. It was further agreed that the application be canvassed through written submissions with the tenant beginning. The matter was fixed for mention on 1/11/2021.
12. On 1st November 2021, the landlord having not responded to the application was granted 2 days to do so. The tenant was granted 7 days to file submissions thereafter and the landlord to file 7 days after service of tenant’s submissions. The matter was fixed for mention on 19/11/2021.
13. On 19th November 2021, both parties had filed submissions but the same had not been printed from the e-filing portal and the matter was again adjourned to 14/12/2021. On the said date, submissions were confirmed to be on record and ruling was therefore fixed for delivery on 23/2/2022.
14. I am now called upon to decide whether to stay the proceedings or not with a view to parties submitting to arbitration in terms of clause 5 (e) of the tenancy agreement dated 20th September 2014.
15. I note that the said agreement was for an initial period of three (3) years commencing on 20th September 2014 to 31st May 2017 which was renewable. I have not seen any agreement for renewal and in my considered view the said tenancy converted into a periodic tenancy which is controlled after 31st May 2017. The arbitration Clause therefore ceased to have effect.
16. This is what section 60(2) of the Land Act, 2012 states:-
“A lessor who accepts rent in respect of any period after the lease has been terminated or the term of the lease has expired shall not by reason of that fact be deemed to have consented to the lessee remaining in possession of the land or as having given up any of the rights or remedies of the lessor against the lessee for breach of covenant or condition of the lease and if the lessor continues to accept rent from a tenant who remains in possession for two months after the termination of the lease, a periodic lease from month to month shall be deemed to have come into force” (underlining mine).
17. According to the landlord’s annexture JWM2, the rent arrears claimed herein are from December 2019 to December 2020. This means that the tenant continued to pay rent after 31st May 2017 upto December 2019 when he begun falling into arears. As such a controlled tenancy was created and the tenancy agreement is of no effect.
18. Even if I was wrong in the foregoing finding this matter has substantially proceeded before the Tribunal with the consent of both parties. The tenant filed pleadings in contravention of section 6(1) of the Arbitration Act, 1995 and the tenant having taken several steps in the matter cannot be heard now insist on his right to have the matter determined by way of arbitration.
19. In this regard, I agree with the decision cited by counsel for the landlord in Midroc Water Drilling Co. Ltd – vs- National Water Construction & Pipeline Corporation(2015) eKLR where it was held thus:-
“The applicant has not only entered appearance and filed a defence and counter-claim but also proceeded to record not one but two consents which have been partly performed. In addition, the court has issued substantive directions on the matter and proceeded to certify the matter ready for hearing. There has been inexcusable and inordinate delay in filing this application and the order sought should not issue”.
20. The tenant having actively participated in the instant proceedings where several consents on the manner of disposal have been entered into cannot now seek to refer the matter to arbitration based on an obsolete agreement. I refuse to be engaged in this kind of legal gymnastics.
21. In the premises, the application dated 2nd January 2021 is dismissed with costs and the matter shall proceed to determination on the merits before this court. It is so ordered.
RULING DATED, SIGNED AND DELIVERED VIRTUALLY THIS 23RD DAY OF FEBRUARY 2022.
HON. GAKUHI CHEGE
VICE CHAIR
BUSINESS PREMISES RENT TRIBUNAL
In the presence of:
Oduor for Tenant
Amutala for the Landlord
Oduor: I intend to file an application on the issue of jurisdiction.
Akusala: This is yet another delaying tactic by the tenants.
Order: Mention on 17/3/2022 to see if any application shall have been filed and take directions in the matter.
HON. GAKUHI CHEGE
VICE CHAIR
BUSINESS PREMISES RENT TRIBUNAL
23/2/2022