Maktaba Sacco Ltd v Locheria

REPUBLIC OF KENYA IN THE COOPERATIVE TRIBUNAL AT NAIROBI TRIBUNAL CASE NO. E623 OF 2025 (Coram: Hon. J. Mwatsama- Chairperson, Hon. B. Sawe- Member, Hon. F. Lotuiya- Member, Hon. M. Chesikaw- Member and Hon. P. Aol- Member.) MAKTABA SACCO LIMITED……………………………….. …….CLAIMANT VERSUS GRACE JEPKOECH LOCHERIA………………………………...RESPONDENT RULING 1. This Ruling dispenses with the Notice of Preliminary Objection dated 17th March 2026. In the Notice of Preliminary Objection, the Respondents raise an issue with the jurisdiction of this Tribunal on the following grounds: a. That the Honourable Court lacks jurisdiction to hear and determine the claim for Representative’s lack of capacity to institute the claim on behalf of the claimant as required under Order 4, rule 4 of the Civil Procedure Rules. b. That the claim is bad in law and incurable defective. 2. The Claimant opposes the Respondent's Preliminary Objection on the ground that it is misconceived, incompetent and does not raise pure points of law as required under the principles established in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd . Instead, that the objection raises disputed factual issues relating to the authority of the Claimant's officials and the Claimant's capacity to institute the suit, matters which can only be determined through evidence. The Claimant further maintains that it is a duly registered co-operative society with legal capacity to sue and be sued, and that any alleged defect in the authorization of its officials is merely procedural, curable, and incapable of rendering the suit incompetent. 3. The Claimant further avers that the Tribunal has jurisdiction under Section 76 of the Co-operative Societies Act since the dispute concerns a loan advanced by the Sacco to its member. It argues that the Respondent has already admitted in her Statement of Defence that the Claimant is a duly registered Sacco, that she obtained the loan, and that she defaulted in repayment, thereby establishing the debtor- creditor relationship and estopping her from challenging the Claimant's legal capacity or the Tribunal's jurisdiction. The Preliminary Objection is therefore described as a technical, unsupported, and contradictory attempt to delay the hearing of the substantive dispute, contrary to Article 159(2)(d) of the Constitution, and the Claimant accordingly prays that it be dismissed with costs and the matter proceed to hearing on its merits. 4. In a Replying Affidavit sworn on 23rd March 2026, The Claimant, through its Chairperson, affirms that it is a duly registered co-operative society with the legal capacity to sue and be sued, and that its officials were properly elected and authorized in accordance with its by-laws to institute the present proceedings. The affidavit contends that the Respondent's Preliminary Objection is misconceived because it raises disputed issues of fact relating to the Claimant's authority and capacity, which require evidence and therefore cannot properly be determined as a preliminary objection under the principles in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd. It further states that the Respondent has already admitted in her Statement of Defence that the Claimant is a registered SACCO, that she obtained a loan from it, and that she defaulted in repayment, thereby confirming the debtor-creditor relationship and placing the dispute squarely within the Tribunal's jurisdiction under Section 76 of the Co-operative Societies Act. The Claimant therefore maintains that the Preliminary Objection is a meritless attempt to delay the determination of the matter and prays that it be dismissed with costs. 5.The Applicant did not file any response. 6.The Preliminary Objection was canvased by way of written submissions and both parties filed their submissions. 7. In the Applicant submissions, the Respondent submits that the Claimant's suit is incompetent because it was instituted and the pleadings signed by a Credit Officer without proof that she had been authorized by the SACCO's management committee or board as required under Section 28(3) of the Co-operative Societies Act and Order 4 Rule 4 of the Civil Procedure Rules. While acknowledging that the Claimant is a duly registered Co-operative Society, the Respondent argues that only the committee has the statutory mandate to institute legal proceedings or delegate such authority through a valid resolution, and that no evidence of such authorization has been produced. Consequently, the Respondent contends that the pleadings are improperly before the Tribunal, no valid suit exists between the parties, and therefore prays that the claim be struck out with costs. 8.The Claimant submits that the Respondent's Preliminary Objection is incompetent because it does not raise pure points of law but disputed factual issues requiring evidence, including the authority of the Claimant's representative and the SACCO's internal authorization. It argues that, as a duly registered co- operative society, it has the legal capacity to sue, and that the Respondent's own admissions that she is a member of the SACCO, received the loan, and defaulted in repayment conclusively establish both the Tribunal's jurisdiction under Section 76 of the Co-operative Societies Act and the existence of a valid debtor-creditor relationship. The Claimant further contends that any alleged defect in authorization is a curable procedural issue that cannot defeat substantive justice under Article 159(2) (d) of the Constitution, and that the Respondent's Preliminary Objection is merely a technical and dilatory tactic intended to obstruct the hearing of the claim on its merits. Accordingly, the Claimant prays that the Preliminary Objection be dismissed with costs and that the matter proceeds to full hearing. ANALYSIS 9.This Tribunal has considered the Application, the responses and the submissions of the parties. The question that this Tribunal has to answer is whether the Preliminary Objection is merited and whether this court has no jurisdiction to handle that matter because the Claimant’s representative has no authority. 10. The purpose and character of a preliminary objection was well discussed by the Court of Appeal in the case of Mukisa Biscuits Manufacturing Co Ltd vs West End Distributors Ltd (1969) EA 696. The court laid down the principles as to what constitutes a preliminary objection. A preliminary objection to be valid must be on a point of law and must be founded on facts that are not in dispute. If evidence would require to be adduced to establish the facts, then a preliminary objection would not be sustainable. 11. In the notice of preliminary objection, the Respondents raise an objection based on jurisdiction. Jurisdiction is a legal question, conferred either by the constitution or statute. 12. It is trite law that jurisdiction flows from either a Statute or the Constitution, and no court assumes jurisdiction on its own. In the case of Owners of Motor Vessel “Lilian S” v Caltex Oil (Kenya) Ltd (1989) eKLR, the Court held that; “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 down tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction… Where a court takes it upon itself to exercise jurisdiction which it does not possess, its decision amounts to nothing. Jurisdiction must be acquired before judgment is given.” 13. The Jurisdiction of this Tribunal is drawn from the Cooperative Societies Act, at section 76(1) which provides as follows; If any dispute concerning the business of the Cooperative society arises: a. Among members, past members and persons claiming through members, past members and deceased or b. Between members, past members or deceased members and the society, its committee or any Officer of the society. c. Between the society and any other Cooperative Society. 14. The Applicant does not dispute that the Claimant is a Co- operative Society. She also does not dispute that she is a member. Therefore, it seems that the dispute is not on the whether the Tribunal is seized with the jurisdiction to handle the subject matter herein, but whether the Tribunal has jurisdiction to handle a matter when the representative of a party has no authority. Having established that the Tribunal has jurisdiction to entertain the parties and the subject matter herein, we now focus on the authority, whether it is a pure point of law, and whether the Applicant’s application is merited. 15. We will now proceed to analyse the present application in light of the above description of a preliminary objection. The law on who can institute a suit on behalf of a cooperative society is Section 28 of the Cooperative Societies Act, which provides as follows 28. Membership and powers of the Committee (1)Every co-operative society shall have a Committee consisting of not less than five and not more than nine members. (2)The members of the Committee shall elect a chairman and a vice chairman from among their number. (3)The Committee shall be the governing body of the society and shall, subject to any direction from a general meeting or the by-laws of the co-operative society, direct the affairs of the co-operative society with powers to— (a) enter into contracts; (b) Institute and defend suits and other legal proceedings brought in the name of or against the co- operative society; and………. (underline ours) 16. The Respondent raises an objection that the person who signed the Claimant’s Verifying Affidavit has no authority to sign being the credit officer of the Claimant. This Tribunal has perused the Verifying affidavit in question and indeed it was sworn by the Claimant’s Credit Officer and there is no accompanying authority by the Committee of the Claimant. We find that the issues raised herein are pure points of law, that require no further interrogation. 17. The next question we ask ourselves is whether the Preliminary Objection is merited and the suit should be struck out. In the case of Korica (U) Limited & another v Kenya Ports Authority [2008] eKLR Maraga J. (as he then was) expressed himself as follows – “The objective of verifying affidavits is to avoid suits being filed without the authority of the Plaintiffs themselves. That is why Order 7 Rule 1 requires that the filing of plaints should be accompanied by verifying affidavits sworn by the Plaintiffs themselves as authority that the suits are filed with their authority. I agree with Mr. Noorani that in the case of a corporation a verifying affidavit should be sworn by an officer of the corporation duly authorized to do so. In this case although the Defendant has admitted that Inchcape Shipping Services Ltd is an agent of the Plaintiffs there is nothing to show that Mr. Nyangala who swore the verifying affidavit is an authorized agent of either of the Plaintiffs. Being merely an employee of the agent is not enough. In the circumstances there is no nexus between him and the Plaintiffs. Consequently I grant prayer 1 of the application and strike out the verifying affidavit sworn by the said Nyangala on 14th September 2005.” 18. Flowing from the above case, we find that the Verifying Affidavit is indeed defective having been signed by someone who has no authority to sign, and the same cannot be said to assert or vouch to the truth of what is stated in the Claim. 19. The question that follows is whether a defective Verifying Affidavit warrants striking out the whole Claim. When faced with this this exact question, Gakeri J. in Kenya Union of Entertainment and Music Industry Employees v Bomas of Kenya [2021] KEELRC 102 (KLR), had this to say “Applying the above principles to the instant application, the Court is far from convinced that substantive justice will be served by striking out the memorandum of claim. More significantly, the Respondent/Applicant has not demonstrated that the memorandum of claim is frivolous or vexatious or scandalous or discloses reasonable cause of action.” 20. Gakeri J. was citing the Court of Appeal with approval in Josephat Kipchirchir Sigilai v Gotab Sanik Enterprises Ltd & 4 others [2007] eKLR where the court held as follows: “We think an omission to fully comply with the provision is a mere irregularity which, except in very clear cases, may be cured. We agree with Mr. Onyinkwa for the appellant that striking out a suit is a draconian and extreme measure which should only be resorted to in the clearest of cases, where the court, after considering all the facts and circumstances of the case comes to the inescapable conclusion that the plaintiff is abusing the court process or his claim is frivolous or vexatious or scandalous or does not lie.” 21. In agreeing with the above precedents, this Tribunal makes the following orders a) The Verifying Affidavit dated 16th of July 2025 is hereby struck out. b) The Claimant is to file and serve a proper Verifying Affidavit within 14 days of this Ruling. c) The costs to be in the cause. Ruling signed, dated and delivered virtually at Nairobi this 16th day of July, 2026. Hon. J. Mwatsama Chairperson Signed 16.7.2026 Hon. Beatrice Sawe 16.7.2026 Hon. Fridah Lotuiya 16.7.2026 Member Signed Member Signed Hon. Paul Aol 16.7.2026 Member Signed Hon. Michael Chesikaw Member Signed 16.7.2026 Tribunal Clerk Jemimah Paul Ngugi advocate for the Respondent. Kipkulei advocate for the Claimant – No appearance. Hon. J. Mwatsama Chairperson Signed 16.7.2026