[2019] KEMSET 90 (KLR)

REPUBLIC OF KENYA

IN THE MICRO AND SMALL ENTERPRISES TRIBUNAL

AT BUNGOMA

MSET NO. 1 OF 2019

PATRICK WALUKHA )

BENARD BARASA )…………………………………….…..CLAIMANTS

GETRUDE KHISA )

HERMAN BARASA )

VERS US

JASON WASIKE ………………………………………………RESPONDENT

RULING

1. In the Claim filed on the 1st July, 2019 at the Tribunal’s registry in Bungoma Law Courts, the four claimants herein who are officials and members of the Kitale Jua Kali Welfare Association, sought the intervention of the Tribunal to have the Respondent who is the Chairperson of the Association comply with the Constitution of the Association in regard to the holding of the Annual General Meeting and Elections.

2. They also sought for the letters issued by the respondent purporting to dismiss the claimants from the Association be nullified. In addition, the Claimants also sought for a declaration against the purported conversion of the Association’s land into private land by the Respondent.

3. The respondent through a Notice of Preliminary Objection dated 20th August, 2019 contends that this Honourable Tribunal lacks jurisdiction to entertain the claimants’ claim. The Preliminary Objection is anchored on the three grounds put forth on the notice, namely:-

(i) That Kitale Jua Kali Welfare Association and to which the respondent is the chairman is not registered under the provisions of the Micro and Small Enterprises Act, No. 55 of 2012.

(ii) That Kitale Jua Kali Welfare Association is registered under the Societies Act Cap 108.

(iii) That the jurisdiction of this Honourable Tribunal and which is established under Section 54 of the Micro and Small Enterprises Act is limited to disputes concerning Micro and Small Enterprises registered under Section 7 of the Act.

4. Mr. Kiarie for the Respondent in support of The Preliminary Objection submitted that, The Tribunal is a creature of Section 54 of The Micro and Small Enterprises Act and that Section 55 thereof, does set forth the kind of disputes the Tribunal shall handle. Counsel contends, those disputes are disputes that relate to Micro and Small Enterprises. The entity in issue in this matter is not such an enterprise.

5. According to Mr. Kiarie, Kitale Jua Kali Welfare Association is an entity registered under the Societies Act Cap 108 of the Laws of Kenya and not under the provisions of Section 5 of the Micro and Small Enterprises Act. Therefore, any dispute relating to the Association should be settled under the provisions of the Societies Act and not the Micro and Small Enterprises Act that establishes this Tribunal.

6. The Advocate Mr. Kiarie, added that until an association has been registered under the Micro and Small Enterprises Act, then the Tribunal has no jurisdiction to determine any dispute set out under Section 55 of the Micro and Small Enterprises Act.

7. In support of his objection, he has relied on the decision in Mukisa Biscuit Manufacturing Co. Ltd. Vs West End Distributors Ltd. Nairobi Civil Appeal No.9 of 1969.

8. Invited to make a comment on the provisions of Section 75 of the Act, Counsel while appreciating that Section is a transitional provision submitted that the Societies Act is not one of those laws contemplated under the Section therefore, it does not come to the aid of the Claimants’ claim.

9. The Claimants in their submissions maintained that this Tribunal has jurisdiction to entertain their claim by dint of the provisions of Section 75 of the Act.

ANALYSIS

10. In Halsbury’s Laws of England (4th Ed.) Vol. 9 at page 350 defines “jurisdiction”as“……the authority which a court has to decide matters that are litigated before it or to take cognizance of matters presented in a formal way for decision”.

11. John Beecroft Saunders in his treatise Words and Phrases Legally Defined Volume 3 at page 113 reiterates the definition of the term jurisdiction as follows “… by jurisdiction is meant the authority which a court has to decide matters that are litigated before it or to take cognizance of the matters presented in a formal way for its decision. The limits of this authority are imposed by the statute charter of commission under which the Court is constituted, and may be extended or restricted by like means. If no restriction or limit is imposed, the jurisdiction is said to be unlimited. A limitation may be either as to the kind and nature of the actions and matters of which the particular court has cognizance or as to the area over which the jurisdiction shall extend, or it may partake both these characteristics…. Where a court takes upon itself to exercise a jurisdiction which it does not posses its decisions amount to nothing. Jurisdiction must be acquired before judgement is given”.

12. Indeed, Mr. Kiarie submitted that the jurisdiction of this Tribunal is set out under Section 55 of the Micro and Small Enterprises Act which states:-

“……(1) if any dispute concerning the Micro and Small Enterprises arises –

(a) Among members, past members and persons claiming through members, past members of associations of administrators of the deceased members of the association:

(b) Between members, past members or administrators of estate of deceased members of the association, and the authority, or any of their officers or members:

(c) Between the Authority and an association,

It shall be referred to the Tribunal for determination.

13. Section 55 (2) provides for the disputes that the Tribunal has authority to determine and they include:-

(a) Commercial disputes involving micro and small enterprises.

(b) Failure to comply with terms and conditions of worksites.

(c) Election and management of associations.

(d) Failure to comply with the constitution or rules of a micro and a small enterprise or umbrella organization;

(e) Un-procedural and illegal allocation subdivision, subletting of a micro and small enterprise worksite;

(f) Mismanagement and misappropriation of funds.

(g) Any other dispute acceptable by the Tribunal. (Emphasis ours)

14. From the notice of Preliminary Objection, submissions by counsel for the Respondent and submissions by the Claimants, two issues emerge for determination in relation to the Preliminary Objection namely,

(a) Whether or not Kitale Jua Kali Welfare Association is an entity which falls under the provisions of the Micro and Small Enterprises Act.

(b) Whether the Claim brought forth in the Claimants’ Statement of Claim is one of those contemplated under Section 55 (2).

15. Section 75 the Micro and Small Enterprises Act states:-

“An association or umbrella organization previously registered under any written law shall be deemed to have been registered under this Act and shall operate subject to the modifications as shall be necessary to give effect to this Act.”

As herein above stated, we invited counsel to make a submission on this provision. With due respect to Mr. Kiarie, the provisions of Section 75 are very clear. Transitional provisions are meant to bridge the gap between the previous or current law and the new law. Section 75 envisioned that there were already organizations registered under other statutes. During the transitional period, those organizations that were already registered under other statutes and which would be the subject of the current Act were deemed to have automatically fallen under the provisions of the Act. Section 5 of the MSE Act was not going to be operational immediately and thus the transitional provision.

16. Looking at the nature of the organization in issue, as can be discerned from the constitution of the association, and other documents placed before us, one cannot find any difficulty in concluding that the organization is among those contemplated under the Act.

17. Contrary to Mr. Kiarie’s submission, transitional provisions never provide for the specific laws to be affected.

18. From the Claimants’ Statement of Claim, it is apparent that the same revolves around breach of the organization’s constitution and matters management and election. These are matters that are clearly within the Tribunal’s jurisdiction as set out under Section 55(2) of the Act.

19. From the various documents placed before us, notably those dated 14th October, 2015 and 12th November, 2015 both from the Micro and Small Enterprises Authority and those dated 17th November, 2015 and 1st March, 2016, we note that the organization has on numerous occasions corresponded with the Micro and Small Enterprises Authority on various matters. This gives a clear impression that the organization has at all material times held itself out as an association subject to the provisions of the Micro and Small Enterprises Act.

DETERMINATION

20. “Jurisdiction is everything, without it a court has no power to make one more step.” (See Owners of Motor Vessel “Lillian S” v Caltex Oil (Kenya) Limited [1989] KLR 1, 14 per Nyarangi JA). Were we to find in favour of the Preliminary Objection, we would have done exactly this. However, by reason of the premises herein above, we find that the Preliminary Objection lacks merit and consequently we hereby dismiss the same.

Dated at Kitale this 23rd day of August, 2019.

Hon. Joseph M. Were – Chairman

Ocharo Kebira – Member

Annette Gikuya – Member.