https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/4964

**REPUBLIC OF KENYA** **IN THE ENVIRONMENT AND LAND COURT AT MACHAKOS** **ELC CASE NO. E110 OF 2025** **TITUS KROP** formerly known as **TITUS KIPROP MOROGO:::::::::::::::::::::::::::::::::::::::::::::::::::PLAINTIFF/APPLICANT** **VERSUS** **ABDULLAHI BARE ALI::::::::::::::::::::::1ST DEFENDANT/RESPONDENT** **EUROBS INVESTMENT & DEVELOPMENT KENYA LIMITED:::::::::::::::::::::::::::::::::::::::::2ND DEFENDANT/RESPONDENT** **DIAMOND TRUST BANK LIMITED::::::::::::::::::::::::::::::::::::::::::3RDDEFENDANT/RESPONDENT** **RULING** The first application is dated 26th August 2025 and is brought under Order 40 rule 1 and 2 of the Civil Procedure Rules seeking the following orders; 1. This application be and is hereby certified urgent. 2. This matter be and is hereby admitted for hearing during the August, 2025 Court Vacation. 3. Pending the hearing and determination of this application inter-partes, the 2nd and 3rd Defendants by themselves or agents be and are hereby restrained from offering for sale, selling and transferring, or charging property Land Reference Number 337/5741. 4. Pending the hearing and determination of this suit, the 2nd and 3rd Defendants by themselves or agents be and are hereby restrained from offering for sale, selling and transferring, or charging property Land Reference Number 337/5741. 5. The costs of this application be provided for. It is based on the grounds that the Plaintiff has filed the claim herein seeking the rescission of the agreement for sale of on 31st July, 2023 between the 2nd Defendant and the Plaintiff (agreement for sale), of the charge over the property executed on 26th July, 2023 amongst the 2nd and 3rd Defendants and the Plaintiff (charge), of the deed of guarantee executed on 26th July, 2023 between the 3rd Defendant and the Plaintiff (deed of guarantee), and general damages for fraudulent misrepresentations. Simultaneous with the Plaint, the Plaintiff has filed the Notice of Motion dated 26th August, 2025 seeking to restrain the Defendants from offering for sale, selling and transferring, or charging the property pending the hearing of the Plaintiff's claim. The background to the Plaintiff's claim is that between 9th June, 2023 and 26th July, 2023 the 2nd Defendant acting through the 1st Defendant secured the sale and transfer of the property to itself from the Plaintiff on fraudulent misrepresentations that it would pay the purchase price upon receiving a loan from the 3rd Defendant but did not do so. Instead, on 28th March, 2024 the 2nd Defendant received Kshs 134,257,541.00 from the 3rd Defendant, and appropriated the same to itself and the 1st Defendant. There was no consideration in the entry into the agreement for sale, the charge, and the deed of guarantee and the Plaintiff is entitled to rescission of the agreement for sale, charge and deed of guarantee. Notwithstanding the above, on 19th August, 2025 the 3rd Defendant issued the Plaintiff with notice of intention to sell the property. The Plaintiff risks losing the property in a fraudulent scheme perpetuated on him by the 1st, 2nd and 3rd Defendants, and for no consideration received by him. The Plaintiff has demonstrated a prima facie case on a cause of action in fraudulent misrepresentation, with a high probability of success, and will suffer irreparable injury if an injunction is not granted. The second application is dated 23rd September 2025 and is brought under Order 2 Rule 15(1)(b)(c) and (d). Order 40 Rule 4(2) and 7, and Order 51 Rule 1 of the Civil Procedure Rules, Sections 1A, 1B, 3A and 6 of the Civil Procedure Act seeking the following orders: - 1. That owing to the urgency of this matter, the service of this application be dispensed with at the first instance and the same heard ex parte. 2. That this Honourable Court be pleased to direct that this application dated 23rd September 2025 be heard in priority to the Plaintiff’s Notice of Motion Application dated 26th August 2025. 3. That this Honourable Court be pleased to strike out this suit as this Honourable Court lacks the jurisdiction to hear and determine this matter. 4. That this Honorable Court be pleased to strike out this suit as the Sale Agreement dated 31st July 2023 entered into by the Plaintiff and 2nd Defendant without obtaining the prior written consent of the 3rd Defendant contrary to Section 87 and 88(g) of the Land Act No. 6 of 2012 is null and void. 5. That the cost of this application and the suit be borne by the Plaintiff. It is supported by the annexed Affidavit of Faith Ndonga and is based on the grounds that the Plaintiff herein (Titus Kiprop Morogo) is the registered proprietor of the property known as Land Reference No. 337/5741 (Original Number 337/2320/20), Mavoko municipality in Machakos. (Hereinafter referred to as the ‘Charged property'). By an application dated 26th August 2025 the Plaintiff seeks a temporary Injunction against the Bank’s exercise of its Statutory Power of sale over the Charged property. On the 9th September 2025, the Honourable Court duly considered the application and issued directions that inter-parties hearing of the Application will be on the 24th September 2025. That this Honourable Court lacks the jurisdiction to hear and determine this matter which arises out of the 3rd Defendant's exercise of its statutory power of sale pursuant to the Court of Appeal decisions in Co-operative Bank of Kenya Limited Vs Patrick Kangethe Njuguna & 5 Others [2017] eKLR & Bank of Africa Kenya Limited & another vs TSS Investment Limited & 2 others (Civil Appeal E055 of 2022) [2024] KECA 410 (KLR). The Plaintiff and the 2nd Defendant entered into a Sale Agreement dated 31st July 2023 without obtaining the prior written consent of the 3rd Defendant contrary to Section 87 and 88(g) of the Land Act No. 6 of 2012 hence the same is null and void. That the 3rd Defendant was not a party to the Sale Agreement dated 31st July 2023 hence there is no privity of contract. The entire Suit and the Notice of Motion dated 26th August 2025 are an abuse of and ought to be struck out. The 1st Defendant/Respondent raised a Preliminary Objection on the following grounds that; 1. This Honourable Court lacks jurisdiction to entertain and/or determine this matter, the same being contractually subject to arbitration under Clause 18 of the Sale Agreement dated 31st July 2023 between the Plaintiff and the 2nd Defendant. 2. By virtue of Section 6(1) of the Arbitration Act, 1995, where a party to an o arbitration agreement brings an action before a court, the court is obliged, upon application, to stay proceedings and refer the matter to arbitration. 3. The Plaintiff has not demonstrated any of the exceptional circumstances envisaged under Section 6(1)(a)—(c) to warrant the Court’s assumption of jurisdiction, and the continued prosecution of this suit contravenes the parties’ binding contractual arrangement. 4. The existence of an arbitration clause goes to the root of the Court’s jurisdiction, and under the authority of Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] KLR 1, once jurisdiction is challenged, the Court must determine that issue first and foremost before taking any further step in the matter. 5. Consequently, the entire suit and the Plaintiff’s application dated 26th August 2025 are incompetent, premature, and bad in law, and ought to be struck out or stayed pending reference to arbitration. 6. The application is incurably defective and ought to be struck out with costs. I have considered the two applications and the preliminary objection and the submissions thereto. The preliminary issue to be determined is whether this court has jurisdiction to determine the matter. The point of law the 1st defendant argues is that this court does not have jurisdiction and they cited the case of Samuel Kamau Wachira vs KCB & 2Others, Civil Application No. 2 of 2012 (eKLR)where the court held that jurisdiction flows from the constitution or legislation or both. They quoted article 162 (2) (b) of the Constitution and Section 13 of the Environment and Land Act. They emphasize that the dispute arising is on the nature of the sale or the terms of the afore mentioned formal charge and placed reliance on the court of Appeal case of Cooperative Bank of Kenya Limited vs Patrick Kangethe Njuguna & 5 Others (2017) eKLRwhere the court held that the rights acquired by a lender in a charge had nothing to do with the use of the land. In the case of Owners of the Motor Vessel M.V Lillian S. vs Caltex Oil (K) Limited (1989) KLR 1the court held that without jurisdiction it has to down its tools. The issue of whether the ELC court has jurisdiction on charges or not is not a novel issue. Article 162 (2) & (3) of the Constitution requires inter alia, that; *“Parliament shall establish courts with the status of the High Court to hear and determine disputes relating to-* *a)…* *b) The environment and the use and occupation of, and title to, land.” Emphasis added.* Article 260 of the Constitution, states that unless the context requires otherwise, ‘land’ includes- *“a) The surface of the earth and the subsurface rock;* *b) Any body of water on or under the surface;* *c) Marine waters in the territorial sea and exclusive economic zone;* *d) Natural resources completely contained on or under the surface; and* *e) The air space above the surface.”* This definition espouses the doctrine of *Cujus est solum, eius est usque ad coelum et ad inferos* (cujus doctrine) which translates to *"whoever owns [the] soil, [it] is theirs all the way [up] to Heaven and [down] to Hell".* A charge is an interest in land securing the payment of money or money’s worth or the fulfillment of any condition as defined by section 2 of the Land Act Cap 280 and the rights so acquired are limited to the realization of the security so advanced as per section 80 of the same statute. Section 150 Land Act provides: - *“The Environment and Land Court established in the Environment and Land Court Act and subordinate courts as empowered by any written law shall have jurisdiction to hear and determine disputes, actions and proceedings concerning land under this Act”* The Land Registration Act under section 101 provides for the court that has jurisdiction as follows: - *“The Environment and Land Court established by the Environment and Land Court Act, 2011 (No.19 of 2011) and subordinate courts, have jurisdiction to hear and determine disputes, actions and proceedings concerning land under this Act.”* In the case of Lydia Nyambura Mbugua vs Diamond Trust Bank Kenya Ltd & Another (2018) eKLR Munyao, J commenting on the application of the above highlighted jurisdiction provisions in the Land Act and the Land Registration Act stated thus; *“22. It will thus be seen from the above that it is the ELC and the empowered subordinate courts, which have jurisdiction to hear disputes relating to matters in the Land Act and Land Registration Act. This jurisdiction will inevitably cover all instruments created within these statutes, which must also encompass charges, and generally all proprietary transactions. The process of sale by chargee, which is what is questioned in this case, is a process that is laid down in the Land Act and Land Registration Act, (formerly in the Registered Land Act now repealed) and these statutes provide that the court with jurisdiction is the ELC. You see, the sale of a charged property by chargee, is really no different from a sale by one private individual to another (see the case of Stephen Kibowen -vs- Agricultural Finance Corporation (2015) eKLR). Both sales involve title and the process of acquisition of title to land. If one argues that the ELC has no jurisdiction to hear a dispute over the process of sale by a chargee, then it can as well be argued that the ELC has no jurisdiction to hear a dispute over a sale of land by one individual to another, which argument, I believe, will sound absurd. Let me reiterate again, that the process of sale of a charged property is governed by the Land Act and Land Registration Act, and these statutes provide that it is the ELC and the empowered subordinate courts which have jurisdiction.”* Be that as it may and in a more recent case which is binding of Bank of Africa Kenya Limited & another vs TSS Investment Limited & 2 others (Civil Appeal E055 of 2022) [2024] KECA 410 (KLR) (26 April 2024) (Judgment), the court of appeal held that; *In view of the foregoing, the only question that falls to be determined is whether the respondents’ suit against the appellants involved “… matters relating to environment and the use and occupation, and title to land”. We do not think so. In our considered view, the issues in contention in the suit, and the purpose for which the respondents moved the trial court for the injunctive relief sought and granted in the impugned ruling, were intended to forestall the 1st appellant’s exercise of its statutory power of sale over the suit properties on the basis of the alleged tenancy relationship with the 3rd respondent.* *19.Accordingly, we do not share the learned Judge’s view that the issues in contention between the respondents and the appellants were matters relating to “… the environment and the use and occupation, and title to land” as contemplated in Article 162 of*[*the Constitution*](http://resolver.caselaw.kenyalaw.org/resolver/akn/ke/act/2010/constitution)*, section 13 of the Environment & Land Court Act, and in section 150 of the*[*Land Act*](http://resolver.caselaw.kenyalaw.org/resolver/akn/ke/act/2012/6)*. To our mind, such matters could only be subject to litigation between the 1st and 2nd respondents as lessees, and the 3rd respondent as lessor.* *We form this view taking to mind this Court’s decision in the afore-cited case of Co-operative Bank of Kenya Limited vs. Patrick Kangethe Njuguna & 5 others (supra) where it was held that the ELC only has jurisdiction to deal with disputes connected to “use” of land and contracts incidental to the “use” of land, which do not include mortgages, charges, collection of dues and rents which fall within the civil jurisdiction of the High Court. Moreover, a charge is a disposition that has no direct contractual relation to “use” (by a tenant or licensee) as in this case, of a chargor’s land. In view of the foregoing, we agree with learned counsel for the appellants that the learned Judge had no jurisdiction to entertain the respondents’ suit as pleaded.”* The Plaintiff’ submitted that even before the court can delve into the question of whether this court has the jurisdiction to determine whether the 3rd Defendant can exercise its statutory power of sale it must first determine whether the agreement entered into between the Plaintiff and Defendant for the sale of the property Land Reference Number No. 337/5741 (Original Number 337/2320/2) (the property) executed on 31st July, 2023 between the 2nd Defendant and the Plaintiff (agreement for sale), of the charge over the property executed on 26th July, 2023 amongst the 2nd and 3rd Defendants and the Plaintiff (charge), of the deed of guarantee executed on 26th July, 2023 between the 3rd Defendant and the Plaintiff (deed of guarantee) are valid; and if so, what is the legal effect of the said agreement, charge and deed of guarantee. That the validity of the agreement dated 31st July, 2023 is vitiated by fraudulent misrepresentation and therefore rendered the contract between the Plaintiff and the 2nd Defendant voidable and the charge and deed of guarantee unenforceable; the 3rd Defendant cannot then rely on it. That the impugned transaction subject of this suit falls squarely within the jurisdiction of this court to determine. The Plaintiff has faulted the Defendants for orchestrating a fraudulent scheme to deprive him off his property. That it is not disputed that on 28th March, 2024 the 2nd Defendant received Kshs 134,257,541.00 from the 3rd Defendant, and appropriated the same to itself and the 1st Defendant. It is also common ground that the 3rd Defendant was aware that the advance to the 2nd Defendant, secured by the charge was intended to pay the price for the property, and not to be otherwise appropriated by the 1st and 2nd Defendants. The 3rd Defendant cannot therefore purport to legitimize their statutory power of sale that is anchored on a voidable contract and a charge and deed of guarantee that are unenforceable. Therefore, in construing whether the ELC had jurisdiction in a matter, the consideration must be the dominant issue in the dispute and whether that issue relates to the environment and the use and occupation of, and title to, land. I have perused the instant suit and it is the Plaintiff’s contention that exercising such power of sale based on a void instrument is an illegality that cannot be upheld by a court. Any actions taken to dispose of property under these circumstances should be declared fraudulent and null and void. That a deed of guarantee is a secondary contract that hinges on the existence of a valid primary debt. And that if the primary debt is unenforceable, the guarantee similarly becomes unenforceable. I find that the dispute arises out of a commercial dispute and is on the nature of the sale or the afore mentioned formal charge. I find that this court lacks jurisdiction to determine the same. Having found so this court must down its tools and cannot determine the application dated 26th August 2025 and the preliminary objection raised by the 1st Defendant. In this regard, I find the application dated 23rd September 2025 in terms of prayer 3 therein is merited and I strike out the suit with costs. It is so ordered. **DELIVERED, DATED AND SIGNED AT MACHAKOS THIS 30TH DAY OF JULY 2026.** **N.A. MATHEKA** **JUDGE**