https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3676

Marifa Development Ltd & another v Middle East Bank Kenya Ltd & another (Environment and Land Case 40 of 2006) [2026] KEELC 3676 (KLR) (17 June 2026) (Ruling) Neutral citation: [2026] KEELC 3676 (KLR) Republic of Kenya In the Environment and Land Court at Mombasa Environment and Land Case 40 of 2006 JO Olola, J June 17, 2026 Between Marifa Development Limited 1st Plaintiff Austin Salmon Kitololo 2nd Plaintiff and Middle East Bank Kenya Limited Defendant and David M Mereka Interested Party Ruling 1.This suit was instituted vide a Plaint dated 14th March 2006 which has since been amended over the course of time, culminating in the Further Further Amended Plaint dated 26th February 2024 which was the result of leave granted by the Court on 21st February 2024. 2.It is the Plaintiffs’ case that the Defendant Bank has irregularly sold and transferred their properties in questionable circumstances. The Defendant denies the accusations. 3.By a Notice of Preliminary Objection dated 15th December 2025, the Defendant objects to the suit on the grounds that:1.This Court has no jurisdiction to hear and determine the 1st Plaintiff’s claim;2.The 1st Plaintiff’s claims are barred by Res Judicata or issue estoppel;3.The 1st Plaintiff’s claims are barred by Limitation of Actions Act;4.The 2nd Plaintiff’s claims are barred by Res Judicata and issue estoppel; and5.The 2nd Plaintiff’s suit is an abuse of the Court process. 4.Both parties filed lengthy submissions and authorities on the Preliminary Objection which was raised when the matter was due to proceed for hearing. On 12th February 2026, the Learned Advocates representing the parties equally made lengthy oral submissions on the matter before the Court. 5.I have carefully perused and considered the Notice of Preliminary Objection as well as the submissions and authorities placed before the Court. Learned Counsels Mr. Kiragu Kimani, Mr. Ochieng Oduol, Mr. Ken Mokaya and Mr. Onyango appeared for the Defendant while Mr. Yona Ougo and Mr. Kaula appeared for the Plaintiff. Learned Counsel Mr. David Mereka represented himself as the Interested Party. 6.By its Preliminary Objection as filed herein, the Defendant asserts that this Court does not have jurisdiction to hear and determine the Plaintiff’s case. It is the Defendant’s Case that the issues raised in the Further Further Amended Plaint dated 26th February 2024 are matters of a commercial nature which are only amenable to the jurisdiction of the High Court as established under Article 165 of the Constitution. 7.In Mukisa Biscuits Manufacturing Limited –vs- West End Distributors Limited (1969) EA 696, it was held that:“…., a Preliminary Objection consists of a pure 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 the contract giving rise to the suit to refer the dispute to arbitration.“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 had to be ascertained or if what is sought is the exercise of judicial discretion. The improper raising of points by way of Preliminary Objection does nothing but unnecessarily increase costs and, on occasion, confuse the issue. The improper practice should stop”. 8.In the case of Oraro –vs- Mbaja (2005) 1 KLR 141, it was held that:“Anything that purports to be a Preliminary Objection must not deal with disputed facts and it must not derive its foundation from factual information which stands to be tested by rules of evidence.” 9.Further, the Supreme Court in the case of Independent Electoral & Boundaries Commission v Jane Cheperenger & 2 Others [2015] eKLR, observed as follows:“..… The true preliminary objection serves two purposes of merit: firstly, it serves as a shield for the originator of the objection— against profligate deployment of time and other resources. And secondly, it serves the public cause, of sparing scarce judicial time, so it may be committed only to deserving cases of dispute settlement. It is distinctly improper for a party to resort to the preliminary objection as a sword, for winning a case otherwise destined to be resolved judicially, and on the merits.” 10.Section 13(1) of the Environment and Land Court Act provides that the Environment and Land Court shall have original and appellate jurisdiction to hear and determine all disputes in accordance with Article 162 (2) (b) of the Constitution. Section 13 (2) (d) of the Act provides thus:“2.In exercise of its jurisdiction under Article 162(2) (b) of the Constitution, the Court shall have power to hear and determine disputes:(a)………..(b)………..(c)…………(d)relating to public, private and community land and contracts, choses in action or other instruments granting any enforceable interests in land; and(e)any other dispute relating to environment and land.” 11.In the matter herein as can be discerned from the Furhter Further Amended Plaint, the Plaintiffs’ claim is founded on a bridging loan in the sum of Kshs. 125,000,000/= that the Plaintiffs secured by charging their properties to the Defendant. The Plaintiffs aver that some of those properties were later sold by the Defendant through a private treaty without the knowledge of the Plaintiffs and/or their directors. The Plaintiffs therefore approached the Court seeking inter alia, orders of a permanent injunction restraining the Defendant from dealing with their properties. 12.While the Defendants contended that the issues arising between them were purely of a commercial nature and that therefore this Court lacked jurisdiction, I was not persuaded that that was the case. Considering a similar dispute in the case of Butler & 4 Others –vs- Redhill Heights Investments Limited & Another (2016) KEHC 1313 (KLR), Ngugi: J. (as he then was) alluded to the predominant test principle and held thus:“When faced with a controversy whether a particular case is a dispute about land (which should be litigated at the ELC) or not, the Courts utilize the Pre-dominant Purpose Test: In a transaction involving both a sale of land and other services or goods, jurisdiction lies at the ELC if the transaction is predominantly for land, but the High Court has jurisdiction if the transaction is predominantly for the provision of goods, construction, or works.” 13.In the present matter, it was clear to me that the dispute herein fell within the provisions of the Land Act, 2012. Section 2 of the said Act defines the word “Court” as follows:“Court” means the Environment and Land Court established under the Environment and Land Court Act, No. 19 of 2011.” 14.In regard to the question of jurisdiction, Section 150 of the said Land Act provides as follows:“The Environment and Land Court and the Subordinate Courts as empowered by any written law shall have jurisdiction to hear and determine disputes, actions and proceedings concerning land under this Act.” 15.In the given circumstances, the predominant issue relates to the dispute of ownership of land resulting from an alleged fraudulent sale of charged properties and a claim that the properties were sold before the statutory power of sale arose. 16.That being the case, I was not persuaded that this Court lacked jurisdiction under Article 162 (2) (b) of the Constitution and Section 13 of the Environment and Land Court Act to entertain the dispute herein. 17.The second issue raised by the Defendant was the contention that the Plaintiffs claim is barred under the doctrine of res judicata. It is the Defendant’s position that the Plaintiff’s claim is so barred by virtue of the judgement delivered by Ringera J. (as he then was) in Nairobi HCCC No. 75 of 2000 which dismissed the said suit on 9th July 2001. It is their case that the issues raised herein were the same issues that were directly and substantially in issue in the said suit. 18.On their part, the Plaintiffs submitted that the judgment in the said HCCC No. 75 of 2000 was delivered before the 1st Plaintiff’s property was sold and the subject claim crystallized. The Plaintiffs further submit that the said suit was dismissed for want of prosecution and as such was not determined on merits. 19.The doctrine of Res judicata is captured under the provisions of Section 7 of the Civil Procedure Act, Cap 21, which provides as follows:“No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such court.” 20.Considering the issue in Kenya Commercial Bank Limited –vs- Muiri Coffee Estate Limited & Another (2016) eKLR, the Supreme Court observed that:“(52). Res judicata is a doctrine of substantive law, its essence being that once the legal rights of parties have been judicially determined, such edict stands as a conclusive statement as to those rights.” 21.From the material placed before the Court, there was no dispute that the 1st Plaintiff herein was the same Plaintiff in the said Nairobi HCCC No. 75 of 2000 and that the Defendant herein was similarly a party to the suit. While the Defendants asserted that Ringera J. (as he then was) had in his judgement determined the matter on merit, I note from an extract of the said judgment that the Learned Judge noted as follows:“The Plaintiff having not appeared in person or duly instructed counsel to prosecute the suit and in the premises there being no evidence in support of the Plaintiff’s case the suit is dismissed with costs to the Defendant.” 22.Arising from the foregoing determination, it was evident that the suit had not been heard and determined on merits. It was instead dismissed for want of prosecution. 23.In the premises, I was similarly not persuaded that the issues raised in this suit were conclusively decided in the said Nairobi HCCC No. 75 of 2000 as to render this suit res judicata. 24.Lastly, the Defendant submitted that the Plaintiffs claim is stale and that the same is barred under the Limitations of Actions Act. It is the Defendant’s position that the claims made by the 1st Plaintiff are particularized under Paragraphs 8 to 18 of the amended Plaint and that ex facie, all the causes of action arose between the years 1998 to 2005. The Defendant asserts that the limitation period for alleged breach of contract is 6 years whilst the breach of any land laws prevailing at the time would be 12 years. It is accordingly their case that the applicable periods exceed the statutory limits and hence the suit should be dismissed. 25.From the record herein, it was apparent that the Plaintiffs had sought and were granted leave to amend their pleadings, introduce a new party and to bring the claim by the 1st Plaintiff out of time in the Rulings delivered by Naikuni J. on 16th October 2023 and 20th February 2024. I was unable to find any evidence of any Appeal filed against the decision of the Court made on 16th October 2023. 26.In regard to the Ruling delivered on 21st February 2024, it was evident that the same was the subject of a challenge in Mombasa Civil Appeal No. E199 of 2025 that remains pending before the Court of Appeal. 27.Given that there was a decision of the Court granting the 1st Plaintiff leave to bring its claim out of time, I did not think it was open to the Defendant to challenge the same by way of a Preliminary Objection. In my considered view, this Court lacks the jurisdiction to revisit the issues that it has already addressed in the two previous Rulings as well as the matter pending before the Court of Appeal. 28.Accordingly, I was not persuaded that there was any merit in the Preliminary Objection dated 15th December 2025. The same is hereby dismissed with Costs to the Plaintiffs. RULING DATED, SIGNED AND DELIVERED IN OPEN COURT AND VIRTUALLY AT MOMBASA THIS 17TH DAY OF JUNE, 2026.…………………………J.O. OLOLAJUDGEIn the presence of:a) Ms. Firdaus Court Assistant.b) Mr. Ougo Advocate for the 1st and 2nd Plaintiffc) Mr. Kiragu Kimani SC, Mr. Ochieng Oduol, Mr. Amwayi, Mr. Mokaya and Mr. Onyambu Advocates for the Defendantd) Ms. Njoroge holding brief for Mereka Advocate for the Interested Party