https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/4598

Kenya Railways Corporation v Aluminium Extruders Ltd (Environment and Land Appeal E011 of 2026) [2026] KEELC 4598 (KLR) (16 July 2026) (Ruling) Neutral citation: [2026] KEELC 4598 (KLR) Republic of Kenya In the Environment and Land Court at Mombasa Environment and Land Appeal E011 of 2026 BA Akello, J July 16, 2026 Between Kenya Railways Corporation Appellant and Aluminium Extruders Limited Respondent (Being an appeal from the Ruling of the Business Premises Rent Tribunal (Hon. Gad Chemoiyai) at Mombasa delivered on 13th February 2026 in Tribunal Case No. E162 of 2025) Ruling A. Introduction 1.“Jurisdiction is everything. Without it a court has no power to make one more step.” So spoke Nyarangi, JA in the celebrated Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] KLR 1, and that voice still echoes in every corridor of our courts. It echoes loudest, I think, in interlocutory disputes such as the one now before me — where a party knocks at the door of the appellate court and says, in effect: “let the lower tribunal pause; for its very authority to sit is in doubt.” The question I must answer today is a narrower one, but it stands in the shadow of that great principle: should this Court, on the material placed before it, halt the wheels of the Business Premises Rent Tribunal while the argument on its jurisdiction is heard and determined here? 2.The parties are not strangers to each other. Since 1972 — for well over half a century — the Appellant, Kenya Railways Corporation, has stood in the shoes of the landlord and the Respondent, Aluminium Extruders Limited, in the shoes of the tenant, over Plot No. Mombasa/Block I/356. Their relationship is anchored in a registered Lease dated 17th August 1972 (as extended and later assigned to the Respondent with the Appellant’s consent on 24th November 1983) for a term of seventy-seven years. The dispute that has now travelled from the Business Premises Rent Tribunal to this Court is short in age but rich in principle: is such a long-term registered leasehold at all a “controlled tenancy” within the meaning of section 2(1) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap. 301? That is the question the appeal will one day answer. It is not the question I answer today. 3.What I answer today is the more modest question raised by the Notice of Motion dated 19th March 2026, filed under Order 42 Rules 1, 2 and 6 of the Civil Procedure Rules, 2010 and sections 1A, 1B and 3A of the Civil Procedure Act, Cap. 21: whether, pending the hearing and determination of the appeal, the proceedings before the Tribunal in Mombasa BPRT Case No. E162 of 2025 should be stayed. B. Background 4.By Complaint dated 22nd May 2025 filed under section 12(4) of Cap. 301, the Respondent moved the Tribunal alleging, in the main, that the Appellant had failed to render proper rent accounts, threatened to distrain and to evict the Respondent extra-judicially, and interfered with its quiet enjoyment of the suit premises. The Respondent prayed for orders restraining the Appellant from levying distress or evicting the Respondent without due process and for leave to deposit rent in Court. 5.The Appellant answered the Complaint by a Notice of Preliminary Objection dated 10th November 2025 contending that the Tribunal was bereft of jurisdiction because the parties were bound by a registered long lease of seventy-seven years and their relationship therefore fell outside the definition of a “controlled tenancy” in section 2(1) of Cap. 301. By its Ruling of 13th February 2026 (Hon. Gad Chemoiyai), the Tribunal dismissed the Preliminary Objection with costs, holding that clause 3(c) of the Lease — a re-entry clause for non-performance and non-observance of covenants — brought the tenancy within section 2(1)(b)(ii) of the Act, and that the tenancy was accordingly a controlled one. It is that Ruling that has provoked the present appeal. 6.When the matter came up before the Tribunal on 25th March 2026, notwithstanding the pendency of this appeal, the Tribunal indicated that it would proceed with the substantive Complaint, and gave a mention date of 30th April 2026. It is that indication which has driven the Appellant to this Court, urging that the appeal will be reduced to an academic exercise if the Tribunal is left free to hear the merits while the very foundation of its authority is under challenge here. C. The Application 7.The Application is supported by the affidavit of one Stanley Gitari sworn on 19th March 2026. In its substance, the Appellant contends that: the appeal turns on jurisdiction and is therefore arguable; that if the Tribunal proceeds to determine the Complaint on the merits the appeal will be rendered nugatory; that the Application has been brought without delay; and that the interests of justice, and of judicial economy, favour a stay. 8.The Respondent opposes the Application through the Replying Affidavit of Shabbir Hussein Hebatullah, a director of the Respondent, sworn on 14th April 2026. The opposition rests on four planks. First, it is said that Mr. Gitari lacks locus standi to swear the affidavit on behalf of the Appellant. Second, that the outcome of a Complaint before the Tribunal is not appealable — hence there is no appeal properly before this Court and no ancillary jurisdiction to grant stay. Third, that the impugned Ruling is a negative order which merely dismissed a preliminary objection and is, on established authority, incapable of stay. Fourth, that the Appellant has not demonstrated substantial loss, has not proffered any security, and has not otherwise met the threshold for the extraordinary relief of a stay of proceedings. 9.The Application was canvassed by way of written submissions. The Appellant filed its submissions on 29th June 2026; the Respondent filed its submissions on 2nd July 2026. I have carefully read them, together with the authorities cited on either side, and I commend counsel for the industry evident in their preparation. D. Issues for Determination 10.It is trite, and Cardozo, J. reminded us long ago in Berkey v. Third Avenue Railway Co., 244 N.Y. 84 (1926), that “metaphors in law are to be narrowly watched, for starting as devices to liberate thought, they end often by enslaving it.” So too with issues in a ruling. If they are loosely framed at the outset, they enslave the reasoning that follows. I therefore set them out with some care. From the pleadings and the rival submissions four issues fall for determination:(a)Whether this Court has jurisdiction to entertain the appeal, and hence to grant ancillary relief, in view of the Respondent’s objection that a decision on a Complaint is not appealable.(b)Whether the deponent Stanley Gitari has locus standi to swear the Supporting Affidavit on behalf of the Appellant.(c)Whether the impugned Ruling — being a Ruling dismissing a Preliminary Objection — is a “negative order” incapable of stay, and, if not, whether the Appellant has satisfied the trilogy of conditions for the grant of a stay of proceedings pending appeal.(d)What orders ought to issue, and as to costs. E. Analysis and Determination (a) Jurisdiction of this Court to Entertain the Appeal 11.I begin, as I must, with jurisdiction. The Respondent’s bold submission that “an outcome of a Complaint is not capable of an Appeal” is, with respect, misconceived. The right of appeal from a determination of the Business Premises Rent Tribunal is expressly conferred by section 15(1) of Cap. 301, which permits an appeal to this Court on a point of law or of mixed law and fact. It matters not whether the process by which the matter reached the Tribunal was styled a Complaint under section 12(4) or a Reference under any other provision. What is appealed is the Ruling of the Tribunal. And a ruling that dismisses a jurisdictional preliminary objection is, self-evidently, a ruling on a point of law — indeed, on the most fundamental point of law a tribunal can determine. 12.Jurisdiction, as our Court of Appeal reminded us in Kakuta Maimai Hamisi v Peris Pesi Tobiko & 2 Others [2013] eKLR, is “everything” — “without it a court must down its tools”. The Supreme Court has since re-affirmed the same principle in Samuel Kamau Macharia & Another v Kenya Commercial Bank Ltd & 2 Others [2012] eKLR and in In the Matter of the Interim Independent Electoral Commission [2011] eKLR. If the Tribunal was without jurisdiction, no amount of procedural elegance can cloak its proceedings with validity. That question is squarely raised by the Memorandum of Appeal, and this Court, being properly seized of the appeal under section 15 of Cap. 301, is equally seized of every ancillary application that lies within Order 42 Rule 6 of the Civil Procedure Rules. The Respondent’s first plank of opposition therefore falls away. (b) Locus Standi of the Deponent Stanley Gitari 13.The Respondent asserts, without more, that Mr. Gitari has no locus to depone on behalf of the Appellant. The Appellant is a body corporate established under the Kenya Railways Corporation Act, Cap. 397, which speaks through its officers. Where an officer swears an affidavit on behalf of a corporation, the presumption is that he does so with authority — a presumption rebuttable only by evidence, not by bare denial. In Spire Bank Ltd v Land Registrar & 2 Others [2019] eKLR and in Assia Pharmaceuticals Ltd v Nairobi Veterinary Centre Ltd [2019] eKLR, this very Court and the High Court respectively held that an officer of a corporate body is presumed to speak for it unless the contrary is shown. The Respondent has placed nothing before me by way of contrary evidence. The objection is, in my view, without substance and I dismiss it. (c) Negative Order? And the trilogy of cOnditions For A Stay Of Proceedings 14.The Respondent’s most formidable submission — and I say so with the frankness that judicial candour demands — is that the impugned Ruling, having dismissed a Preliminary Objection, commands nobody to do anything and forbids nobody from doing anything; and that such an order is, on the authorities, incapable of stay. Learned counsel called in aid Western College of Arts and Applied Sciences v E. P. Oranga & 3 Others [1976] KECA 15, Sonalux Ltd & Another v Barclays Bank of Kenya Ltd & 2 Others [2008] eKLR, and Kimondo & Another v Progressive Credit Ltd [2025] KEHC 7297. The submission is elegant, but, with respect, it misses the mark. 15.The Appellant is not seeking a stay of execution — which, for its own coherence, presupposes a positive decree capable of being executed. The Appellant seeks a stay of proceedings — a wholly different animal. As Lord Denning, MR, observed in Erinford Properties Ltd v Cheshire County Council [1974] Ch 261, “the court has ample jurisdiction to grant such interim relief as will preserve the position pending an appeal.” Our own Court of Appeal in RWW v EKW [2019] eKLR held, in terms, that a stay of proceedings and a stay of execution are governed by different considerations, and that the former may lie where the latter cannot. The Global Tours line of authority (Global Tours & Travels Limited v Five Continents Travel Limited [2015] KECA 789 (KLR)) — adopted by our courts — merely warns that a stay of proceedings is a grave step to be taken sparingly. It does not close the door. It counsels a firm hand at the door. 16.The Western College and Sonalux line therefore does not defeat the present Application; it goes to weight. It reminds the Court that where a Ruling is purely negative, the applicant must show, with particular clarity, the mischief a stay would prevent. That is a matter for the merits, to which I now turn. 17.The principles governing a stay of proceedings pending appeal are, by now, well-settled. In Kenya Shell Ltd v Benjamin Karuga Kibiru & Another [1986] KLR 410 the Court of Appeal laid down the twin (and, in stay-of-proceedings applications, triple) conditions. Later authorities — Amal Hauliers Ltd v Abdulnasir Abukar Hassan [2017] eKLR, Butt v Rent Restriction Tribunal [1979] KECA 22, and, most recently, Cheruiyot v Maiyo & 2 Others, Environment and Land Case E006 of 2025 [2026] KEELC 1624 — have distilled the trilogy of conditions which an applicant must meet: first, that the appeal is arguable and not frivolous; second, that unless the stay is granted, the appeal, if successful, will be rendered nugatory; and third, that the application has been made without unreasonable delay and, where called for, that appropriate security is furnished. I take them in turn. (i) Is the Appeal Arguable? 18.An arguable appeal, as our Court of Appeal has repeatedly said, is not one bound to succeed; it is one that raises at least one bona fide point deserving the consideration of the appellate court — Stanley Kang’ethe Kinyanjui v Tony Ketter & 5 Others [2013] eKLR. Applying that touchstone, the appeal before me is arguable on at least three planes. 19.First, there is the deep question whether a registered leasehold of seventy-seven years — held under a Certificate of Lease, assigned with the landlord’s consent, and governed today by the Land Act, 2012 and the Land Registration Act, 2012 — is at all a “tenancy” within the mischief of Cap. 301, whose protective object, as its long title makes plain, is to shield tenants of short-term and unwritten arrangements from summary eviction and exploitation. That question engages the interface between two statutory regimes and it is not one to be answered on the run. 20.Secondly, there is the construction of section 2(1)(b)(ii) of Cap. 301. That provision defines as a controlled tenancy one which “contains provision for termination, otherwise than for breach of covenant, within five years from the commencement thereof”. On the face of it, the words “otherwise than for breach of covenant” and “within five years from the commencement thereof” are two distinct qualifications, either of which — in the appellant’s submission — takes clause 3(c) of the Lease outside the section. Clause 3(c) is a classical re-entry-for-breach clause, and it is exercisable throughout the seventy-seven year term. Whether the Tribunal correctly construed the provision, or whether it read the qualifications out of it, is a question of law of some weight. It is a question, at all events, that this Court and no other must decide. 21.Thirdly, there is the anterior factual question whether the premises in dispute are “shops, hotels or catering establishments” within section 2(1) — a threshold the Tribunal appears to have assumed rather than found. Assumptions of jurisdiction are the very stuff of MV Lillian S. 22.I hasten to add: none of these observations amounts to a finding on the merits of the appeal. It would be improper for me, at this interlocutory stage, to trespass upon the appellate function. I say only that the appeal is not frivolous. It raises questions of statutory construction and of the reach of Cap. 301 which deserve, and will receive, this Court’s full attention when the appeal is heard on the merits. The first limb of the trilogy is therefore satisfied. (ii) Will the Appeal be Rendered Nugatory? 23.This is where the Appellant’s case is thinner, and I must say so plainly. The Supporting Affidavit of Mr. Gitari deposes, in the language of the form book, that “irreparable harm” will be occasioned and that the appeal will be rendered “nugatory”. What it does not do is descend to the particulars. It does not identify a decretal sum that may be lost, an asset that may be dissipated, or a step that once taken cannot be undone. On the strength of Kenya Shell (supra) and Machira & Co. Advocates v Arthur K. Magugu & Another [2012] eKLR, that generic pleading would ordinarily be fatal. 24.But this is not an ordinary appeal. This is a jurisdictional appeal. And there is, I think, a difference in kind. If the Tribunal proceeds to hear the Complaint on the merits, to receive evidence, to make findings on rent accounts, and to issue orders on distress and quiet enjoyment, and it should later transpire — on the determination of the appeal — that the Tribunal was all along without jurisdiction, then every step it will have taken shall be, in the trenchant words of Lord Denning, MR, in Macfoy v United Africa Co. Ltd [1961] 3 All ER 1169, “not only bad, but incurably bad… you cannot put something on nothing and expect it to stay there. It will collapse.” The whole of that labour will have been in vain — the parties’ time, counsel’s energy, the Tribunal’s scarce judicial resource. That is a form of nugatoriness that goes not to money but to coram non judice. It is a nugatoriness the courts have long recognised — see Nyutu Agrovet Ltd v Airtel Networks Kenya Ltd [2019] eKLR (SC). I am satisfied that this second limb is met, though only just, and only because the appeal turns on jurisdiction. (iii) Delay and security 25.The Ruling was delivered on 13th February 2026. The Memorandum of Appeal is dated 5th March 2026. The Motion is dated and filed on 19th March 2026. That is well within the diligence required by Order 42 Rules 1 and 4 of the Civil Procedure Rules. There is no unreasonable delay. 26.Security is another matter. Order 42 Rule 6(2)(b) commands, in mandatory language, that “such security as the court orders for the due performance of such decree or order as may ultimately be binding on him has been given by the applicant” shall be a condition for stay. The Appellant has offered no security whatsoever. In an ordinary money-decree case this omission would be fatal, as the Respondent, drawing on M/S Portreitz Maternity v James Karanga Kabia, Civil Appeal No. 63 of 1997, correctly submits. But here there is no decretal sum. What there is, however, is a rent that continues to fall due under the Lease and a Respondent whose Complaint expressly concerns the Appellant’s alleged failure to render proper accounts. The equitable answer, in my view, is not to dispense with security altogether — that would be to reward silence with indulgence — but to fashion security to the shape of the dispute. That I shall do in the disposition below. (iv) Balancing the Equities 27.At the heart of every stay application lies a weighing of equities. In Loughran v. Loughran, 292 U.S. 216 (1934), Cardozo, J. reminded the Bench and Bar that “equity does not demand that its suitors shall have led blameless lives” but it does demand that they come with clean hands and with a proposal that does not visit injustice upon the other side. I have that admonition in mind. 28.On the one hand, the Respondent is a small manufacturing enterprise pleading threatened distress and threatened eviction. Cap. 301 was enacted precisely to protect tenants against the extra-judicial mischiefs of the levying of distress and self-help eviction — see section 4 of the Act. To grant a blanket stay of everything the Tribunal is doing would be to strip the Respondent of the very statutory shield to which it turned. That would be an injustice. On the other hand, the Appellant is a public corporation whose statutory functions are grave and whose right of appeal cannot be a paper right. To allow the Tribunal to march to a merits determination while the appeal is pending would be to render the appeal a sham and to invite the very “grave and fundamental interruption” which Global Tours warned against — but from the other end of the telescope, for it would interrupt not the trial but the appeal. 29.The just course, as it appears to me, is neither an unqualified grant nor an outright dismissal, but a conditional order — one that pauses the merits hearing at the Tribunal (so that the appeal on jurisdiction is not rendered a nullity) while preserving the Respondent’s protection against extra-judicial harm and requiring the Appellant to prosecute its appeal with expedition. It has long been the wisdom of equity, and of this Court, to fashion an order that fits the dispute rather than to force the dispute into a ready-made mould: see Kenya Wildlife Service v James Mutembei [2019] eKLR and County Government of Mombasa v Kenya Ferry Services Ltd [2021] eKLR. (v) A word of Caution on Appellants who Obtain Stay and then Sleep 30.It would be remiss of me not to sound a note of caution. The books are heavy with cases of litigants who, having obtained the stay they sought, thereafter treat the appeal as a mattress on which to sleep. A stay is not a hammock; it is a bridge to a hearing. I have said as much in earlier rulings of this Court and I say it again: the price of the indulgence I grant today is diligence in prosecuting the appeal. Should that diligence be found wanting, the stay shall lapse of its own force, as the disposal orders below make plain. F. Disposition 31.For the reasons that I have endeavoured to give, I am satisfied that the Appellant has, on a balance of the equities and on the trilogy of conditions in Kenya Shell and its progeny, made out a case for a conditional stay of proceedings before the Tribunal — but not for the wholesale freeze that was prayed. Accordingly, and in exercise of the discretion conferred by Order 42 Rule 6 of the Civil Procedure Rules and section 3A of the Civil Procedure Act, I make the following orders:a.The Notice of Motion dated 19th March 2026 is allowed in part on the terms that follow;b.There shall be a stay of the hearing on the merits of the Complaint in Mombasa BPRT Case No. E162 of 2025 pending the hearing and determination of this appeal; for the avoidance of doubt, the Tribunal shall not receive evidence on the substantive Complaint, nor make any final orders thereon, pending the said determination;c.The stay herein granted shall not operate to displace any interim preservative orders already made by the Tribunal restraining the Appellant from levying distress, from evicting the Respondent otherwise than in accordance with the law, or from interfering with the Respondent’s quiet enjoyment of the suit premises; the Appellant is, in any event, restrained by this Court, pending the hearing and determination of the appeal, from levying distress against the Respondent or from taking any step in eviction outside the process of the law.d.As security within the meaning of Order 42 Rule 6(2)(b), the Respondent shall, from the date hereof and until the determination of the appeal, deposit the monthly rent falling due under the Lease into a joint interest-earning account in the names of the two firms of Advocates on record — Hassan Alawi & Company Advocates and Mogaka Omwenga & Mabeya Advocates — within seven (7) days of the date on which each month’s rent falls due; the account shall be opened within fourteen (14) days of the date of this Ruling; the funds shall abide the outcome of the appeal.e.The Appellant shall file and serve the Record of Appeal, if not already filed, within thirty (30) days of the date of this Ruling. The Appellant shall file and serve its written submissions on the appeal within fourteen (14) days of service of the Record; the Respondent shall file and serve its written submissions on the appeal within twenty-one (21) days of service of the Appellants submissions thereafter. The appeal shall be mentioned before this Court on 3rd November, 2026, for confirmation of compliance, highlighting submissions and fixing of a Judgment date.f.In the event that the Appellant shall default in the timelines set out in order (5) above, or shall otherwise fail to prosecute the appeal with due diligence, the stay hereby granted shall lapse of its own force, without further order of the Court, and the Tribunal shall be at liberty to proceed with the Complaint on the merits.g.Costs of this Application shall be in the cause.It is so ordered. DATED, SIGNED AND DELIVERED VIRTUALLY VIA MICROSOFT TEAMS AT MOMBASA THIS 16TH DAY OF JULY, 2026. .......................AKELLO, B, OGWJUDGEIn the presence of:Gillian — Court AssistantKithinji for the AppellantAbuoga H/B for Omwenga for the Respondent