https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/4019

Miano & 2 others v Mbaka t/a Branden Junior School (Land Case Appeal E003 of 2025) [2026] KEELC 4019 (KLR) (Environment and Land) (2 July 2026) (Judgment) Neutral citation: [2026] KEELC 4019 (KLR) Republic of Kenya In the Environment and Land Court at Naivasha Environment and Land Land Case Appeal E003 of 2025 MC Oundo, J July 2, 2026 Between Charles Kamau Miano 1st Appellant Simon Kimani Kibarabara 2nd Appellant Vincent Keraro Osoro 3rd Appellant and Janet Kimathi Mbaka t/a Branden Junior School Respondent (Being an Appeal of the Order of the Honourable Andrew Muma (Member) delivered on the 30th January 2025 pursuant to Leave granted on 10th February 2025 in Nakuru BPRT Case No. E132 of 2024- Charles Kamau Miano and Two Others Janet Kimathi Mbaka t/a Branden Junior School (sic)) Judgment (Being an Appeal of the Order of the Honourable Andrew Muma (Member) delivered on the 30th January 2025 pursuant to Leave granted on 10th February 2025 in Nakuru BPRT Case No. E132 of 2024- Charles Kamau Miano and Two Others Janet Kimathi Mbaka t/a Branden Junior School (sic))BETWEENJANET KIMATHI MBAKAT/A BRANDEN JUNIOR SCHOOL………………………………………. LANDLADYVERSUSCHARLES KAMAU MIANO ……..……….….……….…………………….1ST TENANTSIMON KIMANI KIBARABARA.……….….……….………………….....2ND TENANTVINCENT KERARO OSORO……………………………………………..…3RD TENANTJUDGEMENT. 1.Before me for determination on Appeal is a matter which was heard and determined by Hon. A Muma, Member in BPRT No. E132 of 2024, wherein, upon hearing the Counsel for the Landlady/Applicant in the absence of the tenant, he had issued the following orders:i.That Tenant is hereby ordered to pay rent arrears being Kshs. 4,142,188/=.ii.That Landlady shall have costs assessed at Kshs. 30,000/=. 2.The Tenants/Appellants, being dissatisfied with the said Order, have now filed the present Appeal based on the following grounds in their Memorandum of Appeal:i.That the Learned Member grossly misdirected himself in the question of jurisdiction on account of the existence of an Arbitration Clause in the Lease Agreement dated 1st May 2021;ii.That the Learned Member grossly misdirected himself in failing to find that the suit was Res Judicata in light of the proceedings in Naivasha CMC ELC E053 of 2024;iii.That the Learned Member grossly misdirected himself in facts by holding that the Appellants were indebted to the Respondent in the absence of evidence in support thereof;iv.The proceedings of 30th January 2025 contravene the principles of natural justice as the Appellants were condemned unheard; andv.In addition to the above, the Learned Member grossly misdirected himself in ignoring the law and principles applicable. 3.The Appellants thus prayed for the following orders:i.The Appeal be allowed.ii.The orders of the Trial Court issued and/or delivered on 30th January 2025 be set aside.iii.Costs of the Appeal be awarded to the Appellants. 4.In response, the Respondent vide her Replying Affidavit dated 12th March 2026, argued that the trial court in BPRT No. E132 of 2024 had jurisdiction to hear and determine the suit as the arbitral clause in the Lease Agreement did not oust its jurisdiction. That in any event, pursuant to the provisions of Section 6 of the Arbitration Act, a party seeking to rely on an arbitration clause must apply for a stay of proceedings not later than the time of entering appearance or filing any pleadings, which the Appellants herein had failed to do. That, instead, the Appellants had, after entering an appearance, filed an Application dated 13th September 2024 seeking a stay of execution rather than a stay of proceedings pending arbitration; hence, it did not properly invoke the arbitration clause. 5.That thereafter, the Appellants had challenged the jurisdiction of the trial court via a Preliminary Objection on the basis of the existence of an arbitral clause in the Lease Agreement, which Preliminary Objection was compromised on 13th December 2025 by consent of both parties, whereupon the trial court had, in the presence of the Appellants’ Advocate, directed that the matter proceed for hearing on merit. She argued that the Appellant had submitted themselves to the jurisdiction of the trial court by actively participating in the proceedings therein, including, by consent, taking a hearing date slated for 30th January 2025 in the presence of their Advocate on record. 6.She relied on the provisions of Section 2 (1) (b) (ii) of the Landlords and Tenants (Hotels, Shops and Catering Establishment) Act Cap 301, to emphasize that the trial court had jurisdiction to hear and determine disputes relating to controlled tenancy that had been reduced into writing and contained a provision for termination otherwise than for breach of covenant. She asserted that the Lease herein contained a termination clause that was not linked to a breach of the terms of the lease, thus establishing a controlled tenancy that invokes the jurisdiction of the trial court. 7.On the allegation that the instant matter is Res Judicata Naivasha CMC ELC E053 of 2024, she placed reliance on the provisions of Section 7 of the Civil Procedure Act to explain that the issue in the former suit must have been heard and finally determined on its merits by a Court of Competent jurisdiction before the same issues could be raised in a subsequent suit. That in the instant case, the Applicant had filed their substantive pleading accompanied by an Application dated 21st June 2024 in Naivasha CMC ELC E053 of 2024. That in determining the said Application, the Honourable Court had held that the dispute between the parties ought to be preserved for arbitration, and referred the parties to Arbitration. 8.That accordingly, on 15th July 2025, in the presence of the Appellants’ advocates on record, an interim arbitral order had been issued by consent of parties herein to stay the arbitral proceedings until the Appeal herein is heard and determined. That subsequently, neither the arbitral proceedings nor the issues raised in the substantive pleadings in Naivasha CMC ELC E053 of 2024 had been heard and determined on their merits, thus the doctrine of Res Judicata does not arise. 9.She contended that the ground of Appeal to the effect that the Learned Member had grossly misdirected himself by finding that the Appellant was indebted to the Respondent in the absence of evidence, is misplaced since she had filed a tabulation of the rent arrears that had been incurred by the Appellant together with the outstanding balances and which had been produced before the Court. That in any event, the Record of Appeal did not contain any alternative reconciliation, bank statements or payment schedules from the Appellants disputing the said tabulation. Furthermore, she had produced audio evidence before the trial court in which the Appellants had acknowledged that they owed her rent arrears. That accordingly, the Learned Member had properly directed himself on the facts when he correctly found that the Appellants were indebted to her on the basis of the evidence that had been placed before the trial court. 10.She deposed that it was not true that the Appellants had been condemned unheard because their advocate on record had been present in court on 13th December 2024, when the Preliminary Objection had been compromised by consent and the matter slated for hearing on 30th January 2025. On that date, however, their advocate failed to attend Court to prosecute their case, and the reference was heard in their absence. She thus argued that the Appellants had been afforded an opportunity to be heard, and their failure to attend court on the scheduled hearing date cannot be construed as a violation of the rules of natural justice. 11.That the allegations that the Learned Member had grossly misdirected himself in ignoring the law and applicable principles were also unfounded, as he had properly considered the Pleadings, the evidence that had been placed before the Court and the applicable legal principles before arriving at the impugned decision. 12.She contended that the instant Appeal was devoid of merit as the grounds advanced by the Appellants do not disclose any error of law or fact on the part of the Learned Member to warrant interference by the Honourable Court. The decision of the Tribunal was sound both in law and in fact; hence, it ought to be upheld. She thus urged the court to dismiss the appeal with costs. 13.The Appeal was admitted for hearing on 24th March 2026, and directions were issued that the same be disposed of by way of written submissions, herein summarised. Appellant’s Submissions. 14.The Appellants opened their submissions dated 26th March 2026, by establishing the standard of review for the Court, asserting that as the first appellate court, it had a legal obligation to independently re-examine and re-evaluate the entire trial record to reach its own autonomous conclusions as was held in the cases of Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123 and Abok James Odera t/a A.J. Odera & Associates v John Machira t/a Machira & Co. Advocates [2013] eKLR. 15.They then proceeded to argue that the Tribunal committed a fatal, foundational error by assuming jurisdiction over the dispute despite the presence of a valid, active arbitration clause in the Lease Agreement stating that Arbitration agreements reflected the direct intent of the parties and must be strictly enforced by courts, as was held by the Supreme Court in the case of Nyutu Agrovet Limited v Airtel Networks Kenya Limited & Another [2019] eKLR and the court of Appeal in Anne Mumbi Hinga v Victoria Njoki Gathara [2009] eKLR. 16.That although the Respondent claimed that the Tenants submitted to the jurisdiction by participating, this was legally flawed because jurisdiction stems purely from the law and cannot be created through consent, acquiescence, or procedural technicalities like the timing of a Section 6 application under the Arbitration Act Reliance was placed on the decsison in the case of Samuel Kamau Macharia & Another v Kenya Commercial Bank & 2 Others [2012] eKLR. 17.They submitted that the dispute had already crystalized into active arbitration. An existing court order from Naivasha had referred the dispute to arbitration, and an arbitrator had already assumed jurisdiction and had even issued a consent order on 15th July 2025. Once the arbitral process was set in motion, ordinary courts ought to defer to it to prevent duplication and conflicting outcomes. Reliance was placed on the decision in UAP Provincial Insurance Co. Ltd v Michael John Beckett [2013] eKLR. 18.The Appellants contended that the proper forum for this dispute was already determined by a court of concurrent jurisdiction in Naivasha CMC ELC E053 of 2024, thus making the issue of where the case should be heard res judicata. The Respondent's argument that res judicata does not apply because the previous case was not heard on its merits was therefore legally incorrect. Their position was that the doctrine applied robustly to any threshold issues that have been conclusively settled, as well as any issues that ought to have been raised with reasonable diligence. They placed reliance on the decisions in Independent Electoral and Boundaries Commission v Maina Kiai & 5 Others [2017] eKLR and the Supreme Court holding in Kenya Commercial Bank Limited v Muiri Coffee Estate Limited & Another [2016] eKLR. 19.That bringing the same dispute to the Tribunal after the Naivasha court had already ordered it to go to arbitration, therefore constituted an impermissible, backdoor attempt to bypass a binding judicial decision. Reliance was placed on the decisions in Uhuru Highway Development Ltd v Central Bank of Kenya & 2 Others [1996] eKLR, Pop-In (Kenya) Ltd & 3 Others v Habib Bank AG Zurich [1990] eKLR, and John Florence Maritime Services Ltd & Another v Cabinet Secretary Transport and Infrastructure & 3 Others [2021] KESC 39 KLR. 20.The Appellants claimed that they had been condemned unheard, which was in gross violation of Article 50 of the Constitution and the rules of natural justice. Page 390 of the trial record shows the matter was listed for a routine administrative call-over session, which was meant only to take dates or check attendance, not a scheduled substantive hearing. Therefore, by converting this administrative mention into a final hearing without proper notice, the Tribunal blindsided them. 21.Because the matter was heavily contested, the Tribunal should have exercised its discretion to ensure both sides were heard, rather than taking a mechanical approach that decided substantive property rights in the absence of one party. Reliance was placed on the decisions in Judicial Service Commission v Mbalu Mutava & Another [2015] eKLR, (Supreme Court), Shah v Mbogo [1967] EA 116, and Pithon Waweru Maina v Thuku Mugiria [1983] eKLR. 22.Finally, the Appellants submitted that the Tribunal's finding that they owed Kshs. 4,142,188/= was completely unsupported by tested or legally admissible evidence, where no formal evidentiary hearing took place. There was no examination-in-chief, no witnesses were called, and no documents were properly produced. The Landlady's self-generated rent tabulation lacked primary supporting documents, like bank statements or receipts, and her alleged audio recordings were completely unverified and unauthenticated. A judicial body could therefore not issue a definitive monetary award based on untested, unvouched evidence. They relied on the decisions in Kirunga v Kirunga & Another [1988] KLR 348, Peter v Sunday Post Ltd [1958] EA 424, and Kinyatti v Republic [1984] eKLR. They then sought the court to allow their Appeal in its entirety, set aside the Tribunal's orders, substitute them with an order referring the dispute to arbitration, and award them the costs of the Appeal and the court below. Respondent’s Submissions. 23.The Respondent, in her submissions dated 23rd February 2026, outlined her issues for resolution as follows:i.Whether the Business and Rent Premises Tribunal had jurisdiction to hear and determine the dispute notwithstanding the arbitration clause in the lease agreement dated 1st May 2021;ii.Whether the suit in BPRT/E132/2024 was Res judicata in light of the proceedings in Naivasha CMC ELC E053 of 2024;iii.Whether the appellants were condemned unheard in the proceedings of BPRT/E132/2024; andiv.Whether the tribunal erred in fact and law in finding that the Appellants were indebted to the Respondent. 24.The Respondent submits that the Business Premises Rent Tribunal (BPRT) had proper jurisdiction to hear and determine the matter, and that the Appellants waived or abandoned their right to rely on the arbitration clause through their procedural conduct. She submitted that under Section 6(1) of the Arbitration Act, a party seeking to rely on an arbitration clause must apply for a stay of proceedings immediately upon entering an appearance and before filing any other pleadings. The Appellants failed to do this and instead sought a stay of execution, not a stay of proceedings, in their first application. She placed her reliance on the decisions in Adrec Limited v Nation Media Group Limited [2017] KECA 106 (KLR) and Corporate Insurance Company v Loise Wanjiru Waweru [1996] KECA 70 (KLR). 25.She then submitted that the arbitration clause did not automatically oust the court's jurisdiction. The Appellants actively submitted to the Tribunal by seeking an inspection of the premises, and critically, their Preliminary Objection on jurisdiction was withdrawn/compromised by consent on 13th December 2024. They ccoul not, therefore, challenge a forum whose jurisdiction they repeatedly affirmed. Reliance was placed on Pumwani Riyadha Mosque Committee & another v Gikomba Business Centre Limited [2025] KECA 1257 (KLR). 26.She submitted that she had filed her BPRT reference on 28th August 2024 to preserve the property because the Appellants were actively vacating the premises. This preceded the Naivasha Court's arbitration referral, which was only issued later on 5th September 2024. Furthermore, the Appellants failed to meet the 45-day arbitration completion deadline set by the Naivasha court, thereby constituting a waiver. 27.It was her submission that Clause 4(d) of their Lease Agreement allowed for termination via 12 months' notice or rent in lieu of notice without linking it to a breach of covenant. By law, this mechanism established a controlled tenancy under Section 2(1)(b)(ii) of the Landlord and Tenant (Hotels, Shops and Catering Establishments) Act (Cap 301), giving the BPRT statutory jurisdiction despite the lease having a fixed 8-year term. Reliance was placed on Crystal Motor (K) Limited v Kenya Railways Corporation & 2 Others [2024] KEBPR 1680 (KLR). 28.On the second issue for determination on the applicability of the doctrine of res judicata, the Respondent argued that the suit in BPRT/E132/2024 was not barred by res judicata in light of the Naivasha CMC ELC No. E053 of 2024 proceedings. For the Appellants to successfully invoke Section 7 of the Civil Procedure Act, all elements of res judicata ought to be met, primarily that the matter must have been heard and finally determined on its merits. 29.In this case, the Naivasha court merely referred the parties to arbitration. Subsequently, on 15th July 2025, both parties entered a consent order to stay the arbitral proceedings until this current Appeal was heard and determined. Since neither the substantive issues nor the arbitral proceedings were ever heard and finally determined on their merits, the doctrine did not apply. Reliance was placed on the decisions in the case of Pangaea Development Holdings Ltd v Hacienda Development Ltd & 2 others [2023] KECA 938 (KLR) and Independent Electoral and Boundaries Commission v Maina Kiai & 5 others [2017] KECA 477 (KLR). 30.On the third issue for determination as to whether the appellants were condemned unheard, the Respondent strongly denied that the Appellants' right to a fair hearing or the principles of natural justice were violated, stating that indeed the record indicated that the Appellants actively participated in the Tribunal proceedings. In fact, the hearing date of 30th January 2025 was fixed by mutual consent in the presence of the Appellants’ advocate on record. 31.Because the Appellants' advocate simply failed to attend court on the agreed date to prosecute their case, the Tribunal was legally entitled to proceed. A party's choice to skip a consented hearing date, therefore, did not amount to being condemned unheard. 32.In regard to the fourth issue for determination as to whether the tribunal erred in fact and law in finding that the Appellants were indebted to the Respondent, the Respondent submitted that the Tribunal did not err in fact or law when it held that the Appellants owed rent arrears, as the decision was anchored on solid, overwhelming evidence. She submitted that she had placed a comprehensive suite of evidence before the Tribunal, including verified rent payment tabulations and outstanding balances, Proclamation notices from a licensed auctioneer, and WhatsApp communications where the Appellants explicitly acknowledged the arrears, and a valuation report confirming unauthorized alterations and physical damage to the premises. 33.The finding of indebtedness was therefore purely factual and substantiated, especially given that the Appellants failed to provide any alternative reconciliation, bank statements, or payment schedules to challenge the figures. The Respondent thus urged the Court to find the Appeal entirely devoid of merit, dismiss it with costs in her favour, and issue an order releasing to her the sum of Kshs. 4,142,888/=, which was deposited with the court. Analysis of the evidence. 34.The Court of Appeal in Paramount Bank Limited vs. First National Bank Limited & 2 Others (Civil Appeal 468 of 2018) [2023] KECA 1424 (KLR), where the court held as follows;“A first appeal is a valuable right of the parties and unless restricted by law, the whole case is therein open for rehearing both on questions of fact and law. A first Appellate Court is the final court of fact ordinarily and therefore a litigant is entitled to a full, fair, and independent consideration of the evidence at the appellate stage. Anything less is unjust. The first appeal has to be decided on facts as well as on law. While considering the scope of section 78 of the Civil Procedure Act, a first Appellate Court can appreciate the entire evidence and come to a different conclusion.” 35.The core dispute is that Janet Kimathi Mbaka t/a Branden Junior School, the Landlady/Respondent herein, instituted a suit against Charles Kamau Miano, Simon Kimani Kibarabara and Vincent Keraro Osoro, the Appellants herein, as the 1st, 2nd and 3rd Respondents/Tenants respectively, in Nakuru BPRT No. E132 of 2024 vide a Notice of Motion dated 29th August 2024, wherein she sought the following orders;i.That the Application be certified urgent, service be dispensed with and be heard ex parte in the first instance.ii.That in the interim, an order be issued that the Respondents/tenants do return removed materials/goods that include desks/lockers and school buses/van 1 Isuzu 37-seater Bus-KBQ 018U, 1 Mitsubishi 33-seater Bus-KBT 072Z and Toyota HiAce 18-seater Van-KAQ 856A back to the premises Naivasha/Maraigushu Block 2/2591.iii.That in the interim, an order be issued stopping the Respondents/Tenants, their agents or anyone working under their instruction from removing learning materials, lockers/desks, school van/buses and all other movable assets from the premises Naivasha/Maraigushu Block 2/2591.iv.That upon hearing and determination of the Application, an order be and is hereby issued that the Respondent/Tenant do pay the rent arrears of Kshs.4,689,725/= within 14 days.v.That upon hearing and determination of the Application, an order be and is hereby issued directing the Respondent/Tenant to restore the premises to the condition and status it was in immediately before the lease.vi.That upon hearing and determination of the Application, an order be and is hereby issued directing the Respondent/Tenant to pay goodwill of Kshs. 4,000,000/=. 36.According to the Tribunal, it had granted prayers (ii) and (iii) pending the inter partes hearing that was scheduled on 11th September 2024 wherein on the said date, the Respondent/Tenant failed to appear in and upon an Application by the Landlady/Applicant, the Tribunal granted orders in terms of prayers 2,3,4 and 5, in her Application, with no order as to costs. 37.On the 24th September 2024, however, the Respondent/Tenant filed an application dated 13th September 2024 seeking that the ex parte orders of 11th September 2024 be set aside on the basis that they were neither served nor heard. They had also requested for the inspection of the premises. The said Application was allowed, and the Tenant granted 14 days to respond to the Landlady/Applicant’s Application dated 29th August 2024, with a hearing date slated for 24th October 2024. 38.On 7th November 2024, the Landlord/Applicant had informed the Tribunal that the Respondent/Tenant had served them with a Preliminary Objection on Jurisdiction in which directions had been taken for the disposal of the same through written submissions, and a Ruling slated for 6th December 2024. However, on 13th December 2024, the Landlady/Applicant’s advocate and the Respondent/Tenant’s Advocate entered into a consent in the following terms:i.‘’By consent, preliminary objection compromised. Matter to proceed to full hearing.ii.Tenants to remove their items and take an inventory in the premises according to landlord/tenant relationship.iii.Tenant to respond in 21 days.iv.Landlady to do further response in 7 days if need be.v.Hearing on 30th January 2025.’’ 39.On 30th January 2025, when the matter had come up for hearing, there was no appearance on the part of the Respondent/Tenant. The Landlady/Applicant’s advocate then informed the Court that the date for the Reference had been taken by consent, further that the Respondent/Tenant had rent arrears of Kshs. 4,142,188/= having paid a cheque of Kshs. 400,000/=. He then sought an order that the Respondent/Tenant do pay the said arrears with costs. The Tribunal then made the following orders:i.. ’Reference dated 29th August 2024 allowed as follows:a.Tenant to pay rent arrears being Kshs. 4,142,188/=.b.Landlord shall have costs assessed at Kshs. 30,000/=.’’ 40.The Appellants as Tenants are appealing a decision from the Business Premises Rent Tribunal in BPRT No. E132 of 2024, where they were ordered ex parte to pay Kshs. 4,142,188/= in rent arrears and Kshs. 30,000/= in costs. They contend that the Tribunal committed a fatal error by assuming jurisdiction over this matter despite the Lease Agreement dated 1st May 2021, having an explicit and mandatory Arbitration Clause that stated that for any lease disputes, the parties must appoint a mutual arbitrator ‘’rather than filing court cases,’’ and framed ordinary courts strictly as a ‘’last option.’’ 41.That the Respondent’s (landlady) claim that the Tenants submitted to the jurisdiction after their advocate subsequently entered into a consent order on 13th December 2024 to compromise a Preliminary Objection that had been filed was legally invalid because jurisdiction flows strictly from the law and contract; it cannot be created or conferred by the consent, errors, or acquiescence of advocates. 42.The Appellants argued that the Landlady’s reference to the Tribunal was a bad-faith, multi-forum abuse of the judicial process because, before the Tribunal issued its final orders, a court of concurrent jurisdiction (Naivasha CMC ELC E053 of 2024) had already considered the dispute and issued a formal determination referring the parties to arbitration where an arbitrator had already been appointed and had even issued an active interim consent order regulating the dispute. Their position was that, because the Naivasha court had already conclusively determined that arbitration was the proper forum, the specific issue was legally closed; therefore, the Respondent's rushing to the Rent Tribunal constituted a collateral attack on a subsisting court order. 43.The Appellants maintain they were condemned unheard in gross violation of Article 50 of the Constitution, as evidenced by the trial record (page 390), which revealed that the session on 30th January 2025 was a routine administrative call-over meant to confirm attendance or take dates, not a scheduled substantive trial. By summarily converting this administrative mention into a final hearing because the Tenants' advocate was absent, the Tribunal blindsided them. 44.Given that this was a heavily contested matter with massive property rights at stake, the Tribunal abused its discretion by adopting a rigid, mechanical approach to finish the case instead of protecting the cardinal right to be heard. They asserted that the final monetary award granted by the Tribunal was completely devoid of any lawful evidentiary foundation, as no formal evidentiary process had taken place. No primary witnesses were called, no examination-in-chief occurred, and no documents were properly entered or cross-examined. Instead, the Tribunal awarded a multi-million-shilling sum based entirely on the oral representations of the Landlady's advocate on the floor of the court. The Landlady's self-generated rent tabulations lacked primary supporting evidence, such as bank statements, and her alleged WhatsApp audio confessions were never authenticated or subjected to statutory evidentiary safeguards. They thus sought the setting aside of the judgment and all consequential orders of the Tribunal, the substitution of an order upholding the arbitration clause/referring the parties back to arbitration, and the award of their costs of the Appeal and the lower court. 45.The Respondent's case, on the other hand, was that the decision of the Business Premises Rent Tribunal (BPRT No. E132 of 2024) ordering the Tenants to pay Kshs. 4,142,188/= in rent arrears was legally and factually sound, and therefore the Appeal should be dismissed with costs and the funds currently deposited in court be released to her, based on the grounds that the BPRT was fully clothed with jurisdiction to hear and determine the dispute, after the Appellants waived any right to rely on the arbitration clause. 46.Her position was that Clause 4(d) of the Lease Agreement permitted either party to terminate the agreement by giving 12 months' notice or paying 12 months' rent in lieu of notice, ‘’without linking the termination to a breach of covenant.’’ Under Section 2(1)(b)(ii) of the Landlord and Tenant Act (Cap 301), this specific mechanism automatically created a ‘’controlled tenancy’’ granting the BPRT exclusive statutory jurisdiction that a private contract could not oust. 47.That under Section 6(1) of the Arbitration Act, it was incumbent upon a party seeking to stay court proceedings pending arbitration to so apply immediately upon entering an appearance and before filing any pleadings, of which the Tenants failed to do, and instead, filed an application for a stay of execution. 48.The Tenants subsequently and actively submitted to the Tribunal's jurisdiction by requesting a formal site inspection. Crucially, on 13th December 2024, the Tenants' advocate withdrew and compromised their Preliminary Objection on jurisdiction by mutual consent, abandoning the arbitration argument and agreeing to proceed to a full trial on the merits. 49.That she had moved the Tribunal on 28th August 2024 to protect her property because the Tenants were actively vacating the school. This preceded the Naivasha Court's arbitration referral order, which was only issued later on 5th September 2024. Furthermore, the Tenants failed to meet the Naivasha Court's 45-day deadline to complete the arbitration, thereby waiving their right to rely on it. 50.She was adamant that the Tribunal suit was not barred under Section 7 of the Civil Procedure Act by the existence of the prior suit in Naivasha CMC ELC E053 of 2024 because, for res judicata to apply, the core issues must have been heard and finally determined on their merits by a competent court. In this case, the Naivasha court merely referred the matter to arbitration without deciding the rent arrears. Subsequently, on 15th July 2025, both parties entered into a mutual consent order to stay the arbitral proceedings until this current Appeal is resolved. Because neither the arbitral tribunal nor the Naivasha court ever heard or determined the substantive debt on its merits, res judicata was legally inapplicable. 51.She denied that the Tenants were condemned unheard, stating that the trial record shows that the Tenants actively participated in the case. The final hearing date of 30th January 2025 was not an administrative surprise but had been explicitly fixed by mutual consent on 13th December 2024 in the presence of the Tenants' advocate on record. 52.Because the Tenants' advocate simply chose not to attend court on the very day they had formally agreed to, the Tribunal was legally entitled to proceed. A party cannot claim a violation of the right to a fair hearing when it voluntarily failed to utilise the opportunity provided to it. 53.That the final monetary award was mathematically verified and factually unassailable as it had been backed by a robust suite of evidence, including verified rent payment tabulations, proclamation notices from a licensed auctioneer, a professional valuation report proving physical damage/alterations to the premises, and explicit WhatsApp communications where the Tenants admitted to being in arrears. The Tenants never provided alternative bank statements, receipts, or financial ledgers to dispute the specific figure of Kshs. 4,142,188/= which correctly factored in their partial Kshs. 400,000/= cheque payment. The Tribunal’s finding was based on concrete, uncontroverted facts and the appeal ought to be dismissed. 54.Based on the above pleadings, as presented, I have also looked at Clause 4 of the impugned lease agreement dated the dated 1st May 2021, herein produced verbatim;‘’PROVIDE ALWAYS AND IT IS HEREBY AGREED AND DECLAREDa). If the rent or any other payment due by the Lessees or any part thereof is unpaid for ten (10) days after it became due whether legally demanded or not or if there is any breach or nonperformance or non-observance by the Lessees of and of the covenants or agreements herein and on the part of the liquidation whether compulsory or voluntary (not being a voluntary liquidation merely for the purpose of reconstruction) then the Lessor may at any time thereafter enter upon the premises and have the same again, repossess and enjoy as in its former estate anything herein contained to the contrary in anywise notwithstanding without prejudice to any right of action or remedy of the Lessor in respect of any antecedent breach of any covenant by the Lessees;In case of any lease term disputes arise, both the Lessor and the Lessee to appoint a mutual arbitrator and both accept the decision of the arbitrator rather than filing court cases. However, time will be essence and if the same is still in dispute, the courts to be the last option.b)If the Lessees shall request the Lessor in writing at least six (6) calendar months before the expiration of the said term……..c)……………….d)The Lessor shall not be liable for any loss or damage or injury to the Lessees, the family, employees, servants or licensees of the Lessees of the property of any such persons caused by:(i)Any act of default (negligent or otherwise) of any servant of the Lessor employed in any capacity whatsoever.(ii)Any lack or shortage of electricity, water or drainage (iii) Any burglary, theft or office or house breaking;(iv)Any fire howsoever occurring; or(v)Any act or default of the Lessees, their servants or agents or licensees with reference to the maintenance or use of the pipes sanitary, water or electrical apparatus therein or the overloading of indemnifies the Lessor against all or any action; claims and proceedings by the Lessees' family, employees, servants, licensees and others claiming through the Lessees in respect of such loss, damage or injurу;Any notice under this agreement shall be in writing and any notice to the Lessees is sufficiently served if addressed to the Lessees and delivered to the premised or sent by registered post to the Lessees last known address in Kenya by the last email address or served on any agent authorized by the Lessor to receive it. Any notice served by registered post is deemed to have been served seven (7) days from the day on which it was posted; and any party wishing to terminate this agreement shall give a 12 months' notice before termination. In lieu of notice, either party shall pay the other a 12 months' rent amount.” Determination. 55.Having considered the record of appeal, the evidence in the trial court, the holding of the trial Magistrate, the written submissions of learned Counsel, the authorities cited and the applicable law as hereinabove stated, and conscious of my duty as the first Appellate Court in this matter, I find the issues for determination as being;i.Whether the Business Premises Rent Tribunal (BPRT) had the requisite subject-matter jurisdiction to hear and determine the reference, if it had,ii.Whether the Appellants' subsequent procedural conduct at the trial level erased their right to rely on the lease's dispute resolution clause.iii.Whether the Tribunal reference was barred by the doctrine of res judicata.iv.Whether the Tribunal violated the principles of natural justice by entering a final monetary award on 30th January 2025. 56.On the first issue for determination, because jurisdiction is a threshold issue, I must determine it first as to whether the Business Premises Rent Tribunal (BPRT) had the requisite subject-matter jurisdiction to hear and determine the reference. As Nyarangi JA famously observed in Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] KLR 1:“'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.' 57.The Tribunal is a creature of statute. Its jurisdictional boundaries are strictly and immutably drawn by the Landlords and Tenants (Hotels, Shops and Catering Establishments) Act (Cap 301), under which it possesses no residual or inherent jurisdiction; it either holds power under the Act or is entirely powerless. 58.Section 2(1)(b)(ii) of the Landlords and Tenants (Hotels, Shops and Catering Establishments) Act provides as follows;‘’Controlled tenancy" means a tenancy of a shop, hotel or catering establishment—(a)which…….or(b)which has been reduced into writing and which—(i)is for a………..or(ii)contains provision for termination, otherwise than for breach of covenant, within five years from the commencement thereof; or………..” 59.From the above provision of the law, a tenancy that has been reduced into writing only qualifies as a controlled tenancy, thereby invoking the Tribunal's jurisdiction if it has a duration of less than five years; OR contains a provision for termination other than for breach of covenant. 60.The Respondent relies heavily on Clause 4(d) of the Lease Agreement, which allows either party to terminate the agreement by serving a 12-month notice or paying rent in lieu thereof, without linking such notice to a default. That this fault-free notice mechanism satisfies the statutory definition. 61.However, a holistic reading of the impugned Lease Agreement reveals a much more severe clause. Clause 4 (a) of the lease explicitly states:“If the rent or any other payment due by the Lessees or any part thereof is unpaid for ten (10) days after it became due... then the Lessor may at any time thereafter enter upon the premises and have the same again, repossess and enjoy as in its former estate..." 62.This is a classic commercial forfeiture clause which explicitly gives the Landlady an immediate right to terminate the 8-year leasehold estate based strictly on a breach of covenant, which was the non-payment of rent. As seen, the lease contained a forfeiture clause specifically for breach of covenant. The law distinguishes between termination by Notice, which is a clause allowing a party to end the lease without the other party doing anything wrong and which, in turn, would trigger the BPRT jurisdiction, and the Forfeiture/Re-entry for Breach clause, which allows a party to end the lease because the other party defaulted. This second aspect does not trigger BPRT jurisdiction. 63.The law is thus clear that where a lease exceeds a term of five years and retains a right of re-entry and forfeiture for breach of covenant, it falls completely outside the protective framework of Cap 301. A private agreement cannot selectively pull elements of Cap 301 to suit its needs while maintaining heavy commercial enforcement mechanisms. Consequently, I find that the lease relationship between the parties did not constitute a controlled tenancy, and the Tribunal lacked subject-matter jurisdiction ab initio. 64.In South C Fruit Shop Limited v Housing Finance Company of Kenya Limited [2013] KECA 330 (KLR), the Court of Appeal had held as follows:‘’The terms of the tenancy agreement were contained in the letter from Tahir Malik dated 6th June 1984. At the outset, it states that the term of the lease was to be for a period of 2 years 6 months, commencing on 16th June 1984. Moreover, there was no lease per se; just a letter setting out the terms upon which the appellant was taking up the premises. This, coupled with the fact that the appellant was in possession of the premises up until 18th December 1985, the date of its eviction, are enough to satisfy us that the tenancy was a controlled tenancy, and therefore termination of the tenancy could only be done under the provisions of the Act.’’ 65.In so holding, the Court of Appeal had explicitly broken down the dual requirements of Section 2(1)(b) of Cap 301 and made it clear that a tenancy becomes 'controlled' under Cap 301 if the term is for a short period, specifically under five years (in that case, 2 years and 6 months). 66.By contrast, the transaction before the Tribunal herein was an 8-year commercial lease. Under Section 2(1)(b) of Cap 301, a written lease exceeding 5 years is completely excluded from the definition of a controlled tenancy unless it contains a mechanism for termination other than for a breach. Because the lease was for 8 years and provided only for immediate termination as a remedy for breach (the 10-day non-payment forfeiture clause), it stood entirely outside the rule in South C Fruit Shop case (supra) where the Tribunal fundamentally misdirected itself by trying to apply short-term tenancy protections to a long-term commercial contract. 67.Since the BPRT is a statutory tribunal, its jurisdiction is subject-matter specific. It is not a court of equity. If the "subject matter" (the tenancy) does not qualify as "controlled," the Tribunal is legally dead to the dispute. No amount of consent or "participation" by the parties (the consent order signed by the advocate) can grant a statutory tribunal power it does not possess under the Act. 68.Secondly, I also find that in the present case, the parties explicitly chose to circumscribe the role of ordinary courts and tribunals in their dispute resolution clause in the Lease Agreement, which reads as follows:“...in case any lease term disputes arise, both the Lessor and the Lessee to appoint a mutual arbitrator, and both accept the decision of the arbitrator rather than filing court cases... the courts to be the last option." 69.The phrase "rather than filing court cases" is a mandatory contractual bar. The parties intentionally established arbitration as a condition precedent to litigation. Under the tenets of party autonomy, courts must jealously guard and enforce the clear intentions of contracting parties. By bypassing this mutual appointment process and rushing directly to the Tribunal via a Notice of Motion on 29th August 2024, the Respondent acted in blatant breach of the contractual dispute mechanism. 70.The use of the word ‘rather’ combined with ‘last option’ had established a clear chronological and procedural hierarchy. Litigation is legally locked away until the key of arbitration has been tried and failed. The Legal Principle is that in contract law, the intentions of the parties are parsed from the plain and ordinary meaning of their words. By designing courts as a ‘last option,’ the parties had created a negative covenant, a binding promise not to sue unless a specific condition (arbitration) was fulfilled first. 71.The Court’s primary duty in such disputes is to enforce the bargain the parties made, not to rewrite it or rescue a party who rushed to court out of panic. Indeed, under Article 159(2)(c) of the Constitution, courts are explicitly directed to promote Alternative Dispute Resolution (ADR), including arbitration and therefore, party autonomy is the bedrock of this principle. 72.While referring to the Arbitration Act, the Supreme Court in Nyutu Agrovet Limited v Airtel Networks Kenya Limited; Chartered Institute of Arbitrators-Kenya Branch [2019] KESC 11 (KLR) held as follows:‘’We have shown that section 10 is meant to ensure that a party will not invoke the jurisdiction of the court unless the Act specifically provides for such intervention. “ 73.The Supreme Court affirmed that courts must respect the autonomy of parties who choose arbitration and must maintain a policy of minimal judicial intervention. When the Respondent (Landlady) rushed to the Tribunal on 28th August 2024, she did not just file a claim; she committed a subterranean breach of the very contract she was trying to enforce. The Tribunal then erred by condoning this breach, effectively rewriting the contract to turn the "last option" into the first resort. 74.The mutual appointment of an arbitrator was a condition precedent to the accrual of a right to litigate, and therefore, when a claim was filed before the condition precedent was met, the suit was procedurally stillborn, premature, incompetent, and bad in law. 75.By explicitly stating that the parties accept the decision of an arbitrator "rather than filing court cases," this lease contained a classic conditional bar. Because no arbitration was ever attempted or failed prior to 28th August 2024, the Respondent’s cause of action before a public tribunal had not yet legally matured. 76.The Respondent's argument had been that the Tenants were vacating the school, hence creating an emergency that an arbitrator couldn't handle quickly but Section 7 of the Arbitration Act provides as follows,“It is not incompatible with an arbitration agreement for a party to request from the High Court, before or during arbitral proceedings, an interim measure of protection and for the High Court to grant that measure.” 77.It can be seen from these provisions of the law that a party can approach a competent court for interim measures of protection, like an injunction to stop them from moving assets, without abandoning the substantive arbitration. The Respondent did not file for a temporary interim holding order to preserve the property pending arbitration. Instead, she filed a full substantive reference at the BPRT seeking final monetary judgments for rent. She did not seek protection; she sought litigation, completely ignoring the arbitral path. 78.The phrase 'the courts to be the last option' was not a polite advice; it was a mandatory contractual command and represented the sovereign will of the contracting parties exercising their freedom of contract. When the Respondent therefore filed her reference on 28th August 2024 without ever proposing, let alone appointing, a mutual arbitrator, she committed a fatal procedural breach. She attempted to make the 'last option' her 'first choice.' Under the principles of party autonomy reinforced by the Supreme Court in Nyutu Agrovet case (supra), this Court cannot validate a suit born out of a direct breach of contract. The reference was fundamentally premature and incompetent from the moment it was filed, and the Tribunal should have rejected it on that ground alone. 79.I shall now address the Respondent's argument that the Appellants were barred from raising jurisdiction because they failed to properly move the court under Section 6(1) of the Arbitration Act, and because their Advocate formally compromised the jurisdictional objection on 13th December 2024. 80.While it is true that the Appellants' trial advocate committed serious procedural missteps and signed a consent to proceed to a full hearing, such a compromise is entirely incapable of curing a lack of subject-matter jurisdiction. This Court must robustly apply the constitutional standard established by the Supreme Court of Kenya in the locus classicus case of Macharia & another v Kenya Commercial Bank Ltd & 2 others [2012] KESC 8 (KLR) where it had held that ;“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. We agree with counsel for the first and second respondents in his submission that the issue as to whether a Court of law has jurisdiction to entertain a matter before it, is not one of mere procedural technicality; it goes to the very heart of the matter, for without jurisdiction, the Court cannot entertain any proceedings.’’ 81.If a statutory tribunal lacks the legal capacity to hear a matter under its parent Act, no amount of procedural default, waiver, or mistaken consent by an advocate can inject jurisdiction into those dead proceedings. The consent order of 13th December 2024 was an attempt to confer jurisdiction by acquiescence. In the eyes of the law, it was a legal nullity. It could not bind the Appellants, nor could it authorize the Tribunal to make a multi-million-shilling final monetary award. 82.The Tribunal was presented with an 8-year commercial lease that was not a controlled tenancy under Cap 301, and which explicitly commanded that courts must be the ‘’last option’’ after mutual arbitration. Because jurisdiction cannot be generated by the mistaken signature of an advocate, the Tribunal acted entirely ultra vires. I therefore find that all subsequent orders issued on 30th January 2025 were fundamentally contaminated by this lack of jurisdiction and cannot be allowed to stand. Since a court must lay down its tools when it finds it lacks jurisdiction, I need not determine the other issues hereinabove captioned. 83.Consequently, the Appeal on the issue of jurisdiction is hereby allowed. i. The Judgment and all consequential orders of the Trial Court/Tribunal delivered on 30th January 2025 in BPRT No. E132 of 2024 are hereby set aside ex debito justitiae.ii. The sum of Ksh 4,172,188/= shall be refunded and released forthwith to the Appellants together with any accrued interest thereon.iii. The dispute is hereby referred to Arbitration in strict compliance with the dispute resolution clause of the Lease Agreement dated 1st May 2021.iv. The costs of this Appeal and of the proceedings in the Tribunal below are awarded to the Appellants.Dated and delivered via Microsoft Teams at Naivasha this 2nd day of July 2026.M.C. OUNDOENVIRONMENT & LAND COURT – JUDGENAIVASHA ELCLA NO. E003/25 JUDGEMENT Page 9 of 9