https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/4514

Pwani Feeds Limited v Murang’a Farmers Co-operative Union Ltd & 2 others (Environment and Land Case E037 of 2025) [2026] KEELC 4514 (KLR) (15 July 2026) (Ruling) Neutral citation: [2026] KEELC 4514 (KLR) Republic of Kenya In the Environment and Land Court at Thika Environment and Land Case E037 of 2025 JA Mogeni, J July 15, 2026 Between Pwani Feeds Limited Plaintiff and Murang’a Farmers Co-operative Union Ltd 1st Defendant Zenith (V) Management Ltd 2nd Defendant and Fairnuts Limited Intended Interested Party Ruling 1.This Ruling is in respect of a Notice of Motion Application dated 5/03/2025 brought by the Plaintiff under Order 40 Rules 1, 2, 3, and 4 of the Civil Procedure Rules; Sections 1A, 1B, and 3A of the Civil Procedure Act; Article 40 of the Constitution of Kenya, and all other enabling provisions of the law seeking the following:i.Spent.ii.Spent.iii.That a temporary injunction be and is hereby issued restraining the Defendants/Respondents, whether by themselves, their agents, servants, employees, or any other person acting on their behalf, from evicting, interfering with, or in any manner whatsoever dispossessing the Plaintiff/Applicant of the suit property known as Thika Municipality Plot No. 4953/679 pending the inter partes hearing and determination of this application.iv.That a temporary injunction be and is hereby issued restraining the Defendants/Respondents, whether by themselves, their agents, servants, employees, or any other person acting on their behalf, from evicting, interfering with, or in any manner whatsoever dispossessing the Plaintiff/Applicant of the suit property known as Thika Municipality Plot No. 4953/679 pending the hearing and final determination of this suit.v.That this Honourable Court be pleased to grant an order compelling the Defendants/Respondents to provide a full financial audit and complete disclosure of the rent offset agreement and all financial records related to the suit property from the year 2016 to date.vi.That this Honourable Court be pleased to grant any other or further relief/orders as it may deem fit and expedient in the interest of justice.vii.That the costs of and incidental to this application be provided for. 2.The Application is supported by the Affidavit of the Applicant SHEM MWAURA NJOROGE dated 5/03/2025. 3.The Applicant depones through its Director, Shem Mwaura Njoroge, who states his capacity and authority to represent Pwani Feeds Limited, and has attached annexure "PFL" to support this averment. He contends that it has been a lawful tenant of the first Respondent in the suit property known as Thika Municipality Plot No. 4953/679 since the year 2015, and has attached annexure "PFL2" to support this averment. The Applicant further depones that in or about the year 2016, the first Respondent faced severe financial distress and agreed to sell the suit property to the Applicant for a sum of Kenya Shillings 58,925,218, which was fully paid and subsequently acknowledged by the first Respondent through a letter dated 21/10/ 2016, which is attached as annexure "PFL3". 4.Furthermore, it is his averment that because the sale failed to materialize due to the first Respondent’s lack of a title deed, both parties entered into a mutual agreement to treat the paid sum as a rent offset, allowing the Applicant rent-free occupation until the amount was depleted. The Applicant depones that this balance was safely maintained until 31/12/2023, when the first Respondent unilaterally and without justification altered the rent offset balance to Kenya Shillings 28,432,752, and he has attached annexure "PFL4" to support this averment. 5.It is the averment by the Applicant that despite issuing multiple demands for an explanation and a reconciliation of accounts, the first Respondent has completely failed, neglected, or refused to respond to the queries, as shown in annexure "PFL5". The Applicant further depones that the first Respondent flagrantly breached their existing agreement by unilaterally increasing the monthly rent from Ksh. 125,000 to Ksh. 350,000, and subsequently engaged the services of the second Respondent, Zenith (V) Management Limited, who issued a demand claiming a purported rent arrear sum of Kenya Shillings 12,885,790.29, as evidenced through attached annexure "PFL6”. 6.According to the Applicant it depones that it is now facing imminent, high-handed, and unlawful eviction threats that directly jeopardize its constitutional right to property under Article 40 of the Constitution of Kenya. That unless the Court intervenes to grant the urgent restraining orders, it will suffer irreparable harm, including catastrophic business loss and financial ruin, which cannot be adequately compensated by an award of damages. 7.The application is opposed vide a Replying Affidavit, sworn by Irene Kabochi, the Chief Executive Officer of the first Defendant, who states that the Plaintiff has failed to meet the legal threshold required for the grant of temporary injunctions. She explains that the parties initially entered into a ten-year lease agreement on 28/04/2005, for the suit property, historically known as Plot No. 4953/679 and now identified as Thika Municipality Plot No. 4953/679, at a monthly rent of Kesh. 125,000, which is attached as annexure "IK-1". 8.This arrangement subsisted until 10/10/2015, when the parties executed a new ten-year lease agreement, annexed as "IK-2", which set the monthly rent at Kesh 350,000 with a seven-and-half percent escalation clause every two years. The deponent further notes that the Plaintiff is in breach of this agreement by subletting the premises to Fair Nuts Limited and altering the property's use without the prior written consent of the first Defendant. 9.The Chief Executive Officer contends that the Plaintiff's narrative regarding a sale transaction is completely misleading, as the Applicant has failed to produce any written Sale Agreement or proof of payment for the alleged purchase price of Kenya Shillings 58,925,218. The first Defendant challenges the authenticity of the Plaintiff's acknowledgment letter dated 21/10/2016, noting that it does not exist in their records, lacks an approving board resolution, and fails to specify the subject property. 10.According to the 1st Defendant's actual records, the Plaintiff had only utilized Kesh 32,632,752 through direct advancements and personal expenditure for structural renovations and improvements. It was this specific sum that the parties agreed would be used as a rent offset against the October 2015 lease, under which the Plaintiff has nonetheless fallen into deep arrears. To substantiate the true financial position, the deponent attaches a comprehensive rent payment breakdown and a rent invoice dated 25/02/2025, which are marked as annexures "IK-3" and "IK-4" respectively. 11.The Application was canvassed by way of written submissions and each party filed their written submissions. The Plaintiff filed theirs dated 3/03/2026 and the 1st Defendant filed theirs dated 12/02/2026. The 2nd Defendant did not participate in the Application. I have taken time to read and consider the applications filed and I found them useful in enabling me make this final decision. Analysis and Determination 12.The core issues arising for this Court’s determination are:a.Whether the Plaintiff/Applicant has established a prima facie case with a probability of success,b.Whether the Applicant stands to suffer irreparable injury in the absence of Court intervention, in whose favor the balance of convenience tilts, andc.Whether an order for a full financial audit and disclosure can be properly granted at this interlocutory stage. 13.These issues must be evaluated within the provisions of Order 40 Rules 1, 2, 3, and 4 of the Civil Procedure Rules, Sections 1A, 1B, and 3A of the Civil Procedure Act, and Article 40 of the Constitution of Kenya. 14.The historical contours of the parties’ relationship, changing from a tenancy to an aborted sale agreement and ultimately converting into a contested rent offset arrangement, complicate the task of balancing property rights against commercial obligations. Contemporary legal commentary emphasizes that in determining interlocutory applications involving complex accounting issues, Courts must strictly safeguard the substratum of the suit while preventing parties from improperly invoking equitable reliefs to avoid contractual liabilities. 15.In evaluating the first limb, the Applicant relies on the locus classicus case of Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] eKLR to contend that its claim raises a genuine and arguable right that has been infringed. In that case, the Court of Appeal authoritatively defined a prima facie case by stating:“A prima facie case in a civil application includes but is not confined to a 'genuine and arguable case'. It is a case which, on the material presented to the Court, a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter." 16.The Applicant asserts that the 1st Respondent's admission of receiving Ksh. 32,632,752 confirms a live financial arrangement directly tied to its occupation of Thika Municipality Plot No. 4953/679, thus satisfying this standard. Conversely, the 1st Defendant argues that the Applicant has failed to produce a valid written sale agreement or proof of payment for the alleged Ksh 58,925,218, rendering its claims purely conjectural. 17.The 1st Defendant relies heavily on the subsequent expiration of the lease agreement on 01/10/2025, to argue that the Applicant no longer holds any protectable interest. However, as modern jurisprudence under Section 3A of the Civil Procedure Act dictates, the mere lapse of a lease period during the pendency of a suit cannot completely extinguish an underlying financial and possessory dispute if the Court was moved while the interest was live. 18.To determine whether injunctive relief should issue, this Court must guide itself by the strict sequential hurdles reaffirmed in Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR, where the Court of Appeal held:“In an interlocutory injunction application, the Applicant has to satisfy the triple requirements to: (a) establish his case only at a prima facie level, (b) demonstrate irreparable injury if a temporary injunction is not granted, and (c) ally any doubts as to (b) by showing that the balance of convenience is in his favour... These are the three pillars on which rests the platform of any order of injunction."The Court further noted that:"The equitable remedy of temporary injunction is issued solely to prevent grave and irreparable injury; that is, injury that is actual, substantial and demonstrable; injury that cannot 'adequately' be compensated by an award of damages." 19.In this case, the Applicant claims it will suffer irreparable loss through the disruption of its manufacturing facility and heavy machinery. However, the evidence presented reveals that the Applicant has sublet the property to Fair Nuts Limited, which means it is not in actual physical occupation but is instead collecting rent from a sub-tenant while defaulting on its primary obligation to the landlord. Under the doctrine of equity captured in Giella v Cassman Brown & Co. Ltd [1973] EA 358, the balance of convenience cannot favor an Applicant who approaches the seat of justice with unclean hands. 20.Granting an injunction to a non-occupying tenant who owes millions in rent arrears would cause greater hardship to the property owner and promote unjust enrichment. Furthermore, the prayer for a full financial audit and complete disclosure cannot be granted at an interlocutory stage because it constitutes a substantive remedy that requires exhaustive examination of disputed documents at full trial. 21.This Court finds that while there is an active financial accounting dispute between the parties, the Applicant has failed to satisfy the sequential criteria for the grant of a temporary injunction. The lease having expired, and the Applicant being in open breach of contract by unauthorized subletting while maintaining substantial rent arrears, the balance of convenience tilts heavily in favor of the property owner's right to protect its investment and levy distress for rent. Granting the interlocutory orders sought would prematurely determine the substantive suit and work an injustice against the Respondents. 22.Consequently, the Court makes the following orders:i.The Plaintiff/Applicant’s Notice of Motion Application dated 5/03/2025 be and is hereby dismissed in its entirety.ii.The interim orders of appearance or temporary injunction holding the status quo pending the determination of this application be and are hereby vacated.iii.The prayer seeking a full financial audit and disclosure at this interlocutory stage is denied, with the issue reserved for determination during the plenary hearing of the main suit.iv.The costs of and incidental to this application are awarded to the 1st Defendant/Respondent.v.Parties are referred to the Deputy Registrar for Pre-trial Conference on 21/07/2026. 23.Orders Accordingly. DATED, SIGNED AND DELIVERED AT THIKA THROUGH MICROSOFT TEAMS ON THIS 15TH DAY OF JULY 2026.…………………….MOGENI JJUDGEIn the virtual presence of:Mr. Kariuki for the PlaintiffDefendants – AbsentMr. Melita - Court Assistant...........................MOGENI JJUDGE