Kimani & another v K-Unity Savings and Credit Co-operative Society Limited (Civil Case E020 of 2024) [2026] KEHC 10535 (KLR) (19 June 2026) (Ruling)

Kimani & another v K-Unity Savings and Credit Co-operative Society Limited (Civil Case E020 of 2024) [2026] KEHC 10535 (KLR) (19 June 2026) (Ruling) Neutral citation: [2026] KEHC 10535 (KLR) Republic of Kenya In the High Court at Kiambu Civil Case E020 of 2024 MN Mwangi, J June 19, 2026 Between John Bosco Kimani 1st Plaintiff Bosco Estates Enginering & Construction Ltd 2nd Plaintiff and K-Unity Savings and Credit Co-operative Society Limited Defendant Ruling 1.The plaintiffs filed this suit simultaneously with a Notice of Motion application, both dated 21st June 2024. They obtained temporary injunctive orders against the defendant restraining it from any interference with the property known as L.R.155/63 (Original No. 155/53/2) which had been used as security for a loan facility issued by the defendant. 2.The defendant filed a Notice of Preliminary Objection dated 7th August 2025 on the ground that the entire suit is an abuse of the Court process as it offends Section 76 of the Co-operatives Societies Act, Cap. 490 Laws of Kenya, on settlement of disputes. The defendant also states that the suit is misconceived and bad in law as this Court does not have the requisite jurisdiction to grant the orders sought in the suit. 3.This Court directed that the Notice of Preliminary Objection would be canvassed first by way of written submissions. The defendant filed submissions dated 13th April 2026 through the law firm of Mbigi Njuguna & Co. Advocates, whereas the plaintiffs filed written submissions dated 25th May 2026 through the law firm of Waithaka & Associates Advocates. 4.Ms Maina, learned Counsel for the defendant submitted that since this Court does not have jurisdiction to hear the suit, it must down its tools in accordance with the position held in the case of the Owners of the Motor Vessel ‘Lilian S’ v Caltex Oil Kenya Ltd [1989] KLR 1. She argued that by dint of Section 76 of the Co-operative Societies Act, this Court does not have jurisdiction to deal with a dispute concerning a Co-operative Society and a member. 5.She submitted that the dispute relates to a debt owed by the plaintiffs as members of the defendant Co-operative Society and the appropriate forum is the Co-operative Tribunal. She placed reliance on the case of Royal Housing Co-operative Society Limited v National Co-operative Housing Union Limited & 2 others [2019] eKLR, which cited the case of Speaker of National Assembly v Hon James Njenga Karume (2008) 1 KLR 425, wherein it was stated that where there is a prescribed procedure for redress of a particular grievance, the same should be strictly followed. Counsel urged this Court to find that it lacks jurisdiction and dismiss the suit with costs to the defendant. 6.Mr. Warutumo, learned Counsel for the plaintiffs submitted that the relationship between the plaintiffs and the defendant is commercial, based on charge instruments of 8th February 2023 and 5th April 2023. He argued that the relationship is that of chargor and chargee and the cause of action arose from the defendant’s premature and unlawful exercise of its statutory power of sale, and not from internal co-operative management or bylaws. 7.He contested membership of the plaintiffs in the defendant Co-operative Society as there is no evidence of membership registers, membership cards or share certificates to confirm the alleged membership. He pointed out that the 1st plaintiff is an individual, while the 2nd plaintiff is a limited liability company with a separate legal personality, which has never applied for or been admitted as a member of the defendant and it should not be locked out from these proceedings. 8.Mr. Warutumo argued that the Notice of Preliminary Objection has not been raised on pure points of law as it introduces contested facts. He relied on the case of Aviation & Allied Workers Union Kenya v Kenya Airways Limited & 3 others [2015] eKLR, and submitted that this Court is required to ascertain through evidence whether the plaintiffs are members of the defendant, the nature of accounts held, the intent behind the execution of the commercial charges which are factual issues, which cannot be disposed summarily by way of Notice of a Preliminary Objection. He relied on the case of Mukisa Biscuits Manufacturing Co. Ltd V West End Distributors Ltd [1969] E.A.696, to support his assertion. He urged this Court to find that the Notice of Preliminary Objection is not merited as the suit requires evidentiary proof. He prayed for the Notice of Preliminary Objection to be dismissed with costs to the plaintiffs. Analysis And Determination. 9.I have considered the Notice of Preliminary Objection and the written submissions by both Counsel. The issue for determination is if the Preliminary Objection should be sustained. 10.The main concern raised by the defendant is that this Court lacks jurisdiction to hear the dispute in the main suit. Jurisdiction was discussed in the case of the Owners of the Motor Vessel “Lillian S” vs Caltex Oil (Kenya) Ltd (supra), where Nyarangi JA., held as follows:“I think that it is reasonably plain that a question of jurisdiction ought to be raised at the earliest opportunity and the Court seized of the matter is then obliged to decide the issue right away on the material before it. Jurisdiction is everything. Without it, a Court has no power to make one more step. Where a Court has no jurisdiction, there would be no basis for a continuation of proceedings pending other evidence. A Court of law downs tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.” 11.The Supreme Court of Kenya weighed in on the issue of jurisdiction in the case of Samuel Kamau Macharia & another v Kenya Commercial Bank Limited & 2 others [2012] eKLR, and held as follows-“A Court's jurisdiction flows from either the Constitution or Legislation or both. Thus a Court of Law can only exercise jurisdiction as conferred by the Constitution or other written law. It cannot arrogate to itself jurisdiction exceeding that which is conferred upon it by Law” 12.In order to decide if the Notice of Preliminary Objection raised by the defendant herein is valid, it is important to consider case law. In the case of Mukisa Biscuits Manufacturing Co. Ltd –vs- West End Distributors Ltd (1969) EA 696, the Court defined what a proper Preliminary Objection is and held 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 a contract giving rise to the suit to refer the dispute to arbitration”.In the same case Sir Charles Newbold, P. stated thus-“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 has to be ascertained or if what is sought is the exercise of judicial discretion. The improper raising of preliminary objections does nothing but unnecessarily increase costs and on occasion, confuse the issue, and this improper practice should stop”. (Emphasis added). 13.In Oraro v Mbaja [2005] eKLR, the Court stated as follows on Preliminary Objections-“I think the principle is abundantly clear. A “Preliminary Objection” correctly understood, is now well identified as, and declared to be, a point of law which must not be blurred with factual details liable to be contested and in any event, to be proved through the process of evidence. An assertion which claims to be a Preliminary Objection and yet it bears factual aspects calling for proof, or seeks to adduce evidence for its authentication is not, as a matter of legal principle, a true Preliminary Objection which the Court should allow to proceed.” 14.In this instance, the defendant argued that the suit offends Section 76 the Co-operative Societies Act which provides for the settlement of disputes in respect of Co-operative societies as set out hereunder: -“(1)If any dispute concerning the business of a co-operative society arises—(a)among members, past members and persons claiming through members, past members, and deceased members; or(b)between members, past members or deceased members, and the society, its committee or any officer of the society; or(c)between the society and any other co-operative society, it shall be referred to the Tribunal.(2)A dispute for the purpose of this section shall include—(a)a claim by a co-operative society for any debt or demand due to it from a member or past member, or from the nominee or personal representative of a deceased member, whether such debt or demand is admitted or not; or(b)a claim by a member, past member of the nominee, or personal representative of a deceased member for any debt or demand due from a co-operative society, whether such debt or demand is admitted or not;(c)a claim by a Sacco society against a refusal to grant or a revocation of license or any other due, from the Authority. 15.Having looked at the Plaint dated 21st June 2024, Paragraph 2 describes the defendant herein as a limited liability company incorporated under the Sacco Societies Act, Cap 409B Laws of Kenya, carrying on business of a Sacco with its registered office in Nairobi in the Republic of Kenya. In paragraph 8 of the said Plaint, the plaintiffs aver that the plaintiff’s Director, John Bosco Mbugua Kimani, maintained the savings account disclosed therein with the defendant. As per the pleadings by the plaintiffs, the dispute is on the computation of interest and all payments claimed by the defendant. From the foregoing pleadings, the dispute in the main suit falls under the ambit of Section 76(2)(b) of the Co-operative Societies Act. 16.The plaintiffs have disputed their membership with the defendant and state that they cannot comply with Section 76 of the Act as the nature of their relationship was purely commercial. A reading of the said provisions however reveals the types of disputes that can be resolved thereunder, which include debts, whether admitted or not. From the Plaint, the plaintiffs admit that the 1st plaintiff maintains a savings account with the defendant. 17.Saccos by their very nature and operations offer credit facilities only to their members or past members. This is in line with Section 43 of the Co-operative Societies Act which provides as follows-Restriction on giving loans“A co-operative society shall not give a loan nor allow any credit, to person other than a member, unless the by-laws of the giving loans society provide for giving loan subject to a resolution passed at the general meeting of the society to that effect.” (Emphasis added). 18.This Court finds that having been granted the loan facilities by the defendant, the plaintiffs are bound by the Co-operatives Societies Act. It is my finding therefore that the defendant’s Notice of Preliminary Objection has merits as it has been raised on a pure point of law, based on the pleadings and the applicable law. The Preliminary Objection herein therefore falls within the confines of the case of Mukisa Biscuits Manufacturing Co. Ltd –vs- West End Distributors Ltd (supra). 19.It is trite that where there is a clear procedure for redress, the same must be followed. This Court is guided by the decision made in the case of Speaker of the National Assembly –Vs The Hon. James Njenga Karume (supra), where the Court observed as follows: -“Where there is a clear procedure for redress of any particular grievance prescribed by the Constitution or an act of Parliament that procedure should be strictly followed.” 20.It is my finding that the proper forum to hear and determine the suit herein is the Co-operative Tribunal established under Section 77 of the Co-operative Societies Act. The upshot is that the Notice of Preliminary Objection has merits. Its effect is that the Notice of Motion application and the entire suit are hereby struck out for want of jurisdiction. The interim orders in place are hereby vacated. Costs are awarded to the defendant.It is so ordered. DATED, SIGNED AND DELIVERED AT KIAMBU ON THIS 19TH DAY OF JUNE 2026. RULING DELIVERED THROUGH MICROSOFT TEAMS ONLINE PLATFORM.NJOKI MWANGIJUDGEIn the presence of:-Mr. Wachira h/b for Ms Maina for the defendant/applicantMr. Warutumo for the plaintiffs/respondentsMs Julia – Court Assistant.NJOKI MWANGI, J.