https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3373

Ajwala v Rosslyn Suites Limited & 2 others (Land Case E334 of 2025) [2026] KEELC 3373 (KLR) (4 June 2026) (Ruling) Neutral citation: [2026] KEELC 3373 (KLR) Republic of Kenya In the Environment and Land Court at Nairobi Land Case E334 of 2025 MN Kullow, J June 4, 2026 Between Susan Awuor Ajwala Plaintiff and Rosslyn Suites Limited 1st Defendant Enaki Property Owners Public Ltd Company 2nd Defendant Hass Consult Real Estate Company 3rd Defendant Ruling Introduction 1.This matter is in relation to property known as apartment No B604 on the 6th floor of block B and E304 on the 3rd floor of block E constructed on LR No 10688/219 herein referred to as the suit properties. 2.Vide chamber summons application dated 25th September 2025 the Applicants seek the following orders:a.That this honourable court be pleased to stay all proceedings in this suit pending arbitration of this dispute in compliance with the terms of the respective agreements for lease entered into by and between the plaintiff and defendantsb.That this honourable court be pleased to issue any such and further orders as it may deem fit in the interests of justicec.Costs of the application 3.The application was premised on grounds as in the supporting affidavit sworn by Farhana Hassanali where she deponed that the parties were bound by the arbitration clause that was in the sale agreements in relation to the apartments being sale agreement dated 6th August 2020 for apartment B604 and 20th December 2023 for apartment E304 4th June 2015 and that the proceedings filed herein had been filed prematurely despite there being an arbitration clause. That the court is obligated to stay proceedings in matters subject to sale agreements the parties had entered into. 4.The respondent/plaintiff filed a replying affidavit sworn on 6th October 2025.She deponed that in as much as the parties had entered into agreements with an arbitration clause, the dispute involved issue touching on consumer protection which issues could not be ventilated through arbitration. 5.That the arbitration clause did not oust the jurisdiction of this court under section 10 of the arbitration Act where courts are to ventilate on issues touching consumer protection where rights of the parties are at stake relying on the provision of Article 46 of the constitution exists to resolve a dispute between parties under an agreement and not stop the implementation of any court order 6.The applicant swore a supplementary affidavit sworn on the 5th November 2025 where it was deponed that the consumer Protection Act in which the plaintiff was anchoring the argument in the replying affidavit applied to immovable goods and property and not immovable property hence did not apply in this case Applicant’s Submissions 7.The applicants submitted on the following issues for determinationi.Whether the Applicant has taken any step in the proceedings other than the steps allowed by Section 6 of the Arbitration ActThe defendants argued that they had not taken any steps in the suit other than file a notice of appointment and prosecute this application hence had not waived their right to arbitration relying on the provision of the relevant part of Section 6(1) of The Arbitration Act which basically gave the courts the mandate to stay proceedings where a party claims raises a claim on the issue of arbitrationii.Whether there are any legal impediments on the validity of the arbitration clause.The applicants argued that the plaintiff had not challenged the validity of the arbitration clause to make it null and void, neither had she indicated that it had ceased to have an effect as a binding contract relying on the case of Euromec International Limited v Shandong Taikai Power Engineering Company Limited [2021] KEHC 93 (KLR).Counsel submitted that on the issue raised that the matter is not one to be subject to arbitration, he argued that this can only be determined by an arbitrator and not this court as held in Careitas v Kenya Rugby Union [2025] KEHC 811 (KLR). Respondent’s submissions 8.The plaintiff filed submissions dated 18th December 2025 and submitted on the followingWhether the consumer protection Act applies to real estate lease transactions.Counsel submitted that as per section 2 of the Act, an agreement was one between a supplier and a consumer in which the supplier agrees to supply goods or services for payment and the applicants herein were suppliers in the business of giving out residential accommodation. That the immovable property constitutes services under the consumer protection Act hence the leases fall within consumer agreements.Whether the arbitration clause in the lease is enforceableCounsel further submitted on section 88(1) of the Consumer Protection Act which stated that disputes arising out of consumer agreements are not subject to arbitration as it will be preventing a party from exercising his of her rights. Analysis and Determination 9.The sole issue for determination is whether the court should stay the proceedings to allow the parties refer the matter to ArbitrationA perusal through the lease agreements dated 6th August 2020 and 20th December 2023 point out to the existence of the arbitration clauses 8.10 and 8.11 which clauses clearly lists arbitration as the mode of conflict resolution of any dispute arising from the lease agreements.The respondents herein claim that the dispute is one touching on consumer rights which rights the applicants herein violated and is a dispute to be resolved under the consumer protection Act cap 501 which will mean this court is the right forum to adjudicate on. 10.It is not asserted by the Respondent that clause 8.10 and 8.11 being the Arbitration Agreement is null and void or otherwise incapable of being performed what is in contention is the nature of the dispute and whether it is one to be referred to arbitration. Section 6(1) of the Arbitration Act No. 4 of 1995 is key. It provides that;1.A court before which proceedings are brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than the time when that party enters appearance or files any pleadings or takes any other step in the proceedings, stay the proceedings and refer the parties to arbitration unless it finds—a.that the arbitration agreement is null and void, inoperative or incapable of being performed; orb.that there is not in fact any dispute between the parties with regard to the matters agreed to be referred to arbitration.” 11.The provision above, is mandatory but has a limitation. It is expressly provided that if the arbitration agreement is “null and void, in operative or incapable of being performed,” and where there is no dispute between the parties with regard to matters agreed to be referred to arbitration. Where a party alleges these matters and they are proved, the court will not stay the proceedings and refer the matter to arbitration.As already submitted the arbitration clauses herein are not null and void as they have not been challenged. 12.The respondent claims that the dispute relates to consumer rights that have been infringed on and need to be adjudicated on by this court as they fall under consumer agreements in section 88(1) of the Consumer protection Act.I have looked at the plaint filed and particularly the particulars of breach. The plaintiff acknowledges that the issues arising are as a result of breach of the lease agreement on the grounds of inter alia;a.Unfair terms of the lease restricting access to the plaintiffb.Misleading informationc.Concealment of material factsd.Delay in failing to deliver the property within the agreed time 13.Clause 8.10 reads that any dispute or controversy or claim arising out of relating to this agreement or a termination hereof (including without prejudice to the generality of the foregoing whether as to its interpretation, application or implementation) shall be resolved by way of consultation held in good faith between the parties. The issues raised by the plaintiff are all emanating from the lease agreement herein and well captured in clause 8.10. The argument that the leases are consumer agreements fails as the breach is said to be on the lease agreements 14.It is trite law that a court cannot rewrite or interfere with the parties’ autonomy in contracts. The courts are under an obligation to give effect to the terms of the contract executed by the parties. Since the parties agreed to refer the dispute to arbitration, the court should, at the first instance, give them an opportunity to resolve their dispute through their preferred method. Referring the parties to arbitration under Section 6 (1) of the Arbitration Act, is a matter of discretion. The applicant in her plaint further goes to state that the said actions above have denied her quiet and peaceful enjoyment of her property leading to loss and damages a clear indication that the plaintiff’s issues are arising out of breach 15.In light of the Constitutional imperative for courts to promote Alternative Dispute Resolution, courts should to the fullest extent possible, give effect intentions of the parties as to the mode of resolving any dispute that arises. I therefore find that the application to stay the proceedings is merited. It is also imperative that the Arbitration process is not used to unduly delay the matter more, It is therefore necessary that the court exercises its inherent powers to do justice to ensure that any party deliberately obstructs the process so as to delay the hearing. Final dispositionThe upshot of the foregoing is that that chamber summons application dated 25th September 2025 is merited and grant the following orders;1.That there be a stay of proceedings in this suit pending arbitration of this dispute in compliance with the terms of the respective lease agreements entered into between the applicants and respondents2.The matter is hereby referred to Arbitration. The arbitration should be completed within 60 days of referral to an Arbitrator failing which either parties shall be at liberty to move the court to list the matter for hearing3.Costs of the application be borne by Respondents. It is so ordered. DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI ON THIS 4TH OF JUNE 2026.MOHAMMED N. KULLOWJUDGERuling delivered in the presence of: -Ms. Achieng for the PlaintiffMr. Wachira for the DefendantPhilomena W. Court Assistant