https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11712

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **COMMERCIAL & TAX DIVISION** **COMMERCIAL CASE NO. E114 OF 2023** **TIM HOLDINGS PTY LIMITED…………….……………………..1ST PLAINTIFF** **JET EXPRESS HOLDINGS LIMITED………………………………2ND PLAINTIFF** **-VERSUS-** **DRAGONFLY AVIATION LIMITED………..…………..……....... DEFENDANT** **RULING** 1. Jurisdiction is everything. It is the lifeblood of any judicial proceeding. Without it, a Court has no power to take even a single step, and any coercive orders issued in its absence amount to a nullity. However, the invocation of jurisdiction—or the challenge thereof—must be deployed as a genuine legal shield. It should not be used as a sword of procedural gamesmanship to deflect the substantive justice of a dispute. This is more so after a party has actively partaken in the judicial process. This Court is called upon to balance the sanctity of contractual forum selection clauses against the equitable doctrine of waiver by conduct and the overarching judicial sovereignty of the Kenyan Courts. A sovereign Judiciary ought not to bow to any other foreign Court other than as provided for by the law. **Background Facts** 2. The Plaintiffs filed the Plaint dated 1st March, 2023. The Plaintiffs' claim arises from a series of agreements entered into with the Defendant in 2022 for the lease-purchase of an aircraft valued at USD 1.6 million. The Plaintiffs contend that after executing a Letter of Intent, a Lease-Purchase Agreement, and subsequent addenda, they fully performed their contractual obligations. This includes facilitating technical inspections, preparing regulatory documentation, undertaking maintenance works, replacing aircraft components, procuring insurance, providing technical services, and incurring various expenses at the Defendant's request. The Plaintiffs further aver that the Defendant accepted the aircraft's condition, paid certain initial amounts, and benefited from the services rendered before subsequently terminating the agreements. 3. The Plaintiffs averred that the Defendant breached the agreements by failing to pay the first instalment of the purchase price, failing to settle agreed contractual fees, and refusing to reimburse expenses incurred on its behalf for maintenance, repairs, documentation, insurance, and operational requirements. Consequently, the Plaintiffs seek recovery of outstanding contractual sums, reimbursement of expenditures, a contractual termination fee, maintenance reserves, and other amounts allegedly due following the Defendant's termination of the agreements. The suit therefore seeks judgment against the Defendant for USD 297,886.80 and EUR 32,587, together with interest, costs, and any other relief the Court may deem appropriate. 4. In response, the Defendant filed the Notice of Preliminary Objection dated 17th April, 2023 on the following grounds; *1. The Honourable Court lacks jurisdiction to determine the instant dispute for the reasons that:* *a) The parties herein have an exclusive jurisdiction to the effect that any disputes arising from the Lease – Purchase Agreement dated 19th July 2022 can only be settled by the Urgent Court of the British Virgin Islands or South Africa Urgent Court;* *b) The parties voluntarily agreed that the governing law and the Court to determine any dispute arising from Lease – Purchase Agreement shall be the Urgent Court of the British Virgin Islands or South Africa Urgent Court;* *c) The place of performance of the agreement between the parties was France; and* *d) The Agreement between the parties has the closest and most real connection with the laws of the British Virgin Islands or South Africa Urgent Court.* 5. The Defendant prayed that the suit instituted vide the Plaint dated 1st March, 2023 be struck out *in limine*, and the cost of and/or incidental to this objection and the suit itself be borne and paid by the Plaintiffs. **Issues for determination** 6. The Court has carefully considered the Objection as well as the written submissions and the oral highlights by Counsel for the parties. The Court frames a single issue for determination as follows: 1. *Whether the Preliminary Objection is merited.* **Analysis** 7. The guiding jurisprudence for preliminary objections remains the celebrated decision in **Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696**, which was recently affirmed by the Supreme Court of Kenya in **Wamae & 97 others v Barclays Bank of Kenya Limited [2021] KESC 5 (KLR)**. In ***Mukisa Biscuit***, **Law, JA** enunciated the principle: *"A preliminary objection consists of a 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 has to be ascertained or if what is sought is the exercise of judicial discretion."* 8. The Applicant raised the Preliminary Objection on the ground that this Court has no jurisdiction to determine the suit. It is trite law that jurisdiction is everything and that without it, a Court cannot perform any further action in a matter. This position was clearly stated by the Court of Appeal in **Phoenix of E.A. Assurance Company Limited v S. M. Thiga t/a Newspaper Service [2019] KECA 767 (KLR)** when it held thus: ***“Jurisdiction is primordial in every suit. It has to be there when the suit is filed in the first place. If a suit is filed without jurisdiction, the only remedy is to withdraw it and file a complaint one in the court seized of jurisdiction. A suit filed devoid of jurisdiction is dead on arrival and cannot be remedied. Without jurisdiction, the Court cannot confer jurisdiction to itself. The subordinate court could not therefore, entertain the suit and allow only that part of the claim that was within its pecuniary jurisdiction. In another locus classicus in this subject, this Court pronounced; Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd. (1989):*** ***“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 its tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction….Where a court takes it upon itself to exercise jurisdiction which it does not possess, its decision amounts to nothing. Jurisdiction must be acquired before judgment is given***.” 9. It was the Applicant’s argument that it is not in dispute that the cause of action in this matter arises from the Lease Purchase Agreement dated 19th July, 2022 between the Plaintiffs and the Defendant. It is also not in dispute that the Lease – Purchase Agreement dated 19th July, 2022 specifically designated the Urgent Court of the British Virgin Islands or South Africa Urgent Court as the forum to settle any disputes arising from the Agreement. 10. In contrast, the Respondents contended that the Defendant, having entered an unconditional appearance and subsequently filed an unconditional Statement of Defence, is deemed to have submitted to the jurisdiction of the Court. Any objection founded on a contractual jurisdictional ouster clause ought to have been raised at the earliest opportunity through a conditional appearance and an appropriate application challenging the Court’s jurisdiction. By actively participating in the proceedings without reservation, the Defendant waived any right to rely on the alleged jurisdiction clause and cannot now seek to oust the Court’s jurisdiction. Consequently, the Preliminary Objection is untenable and ought to be dismissed. 11. The issue of jurisdiction can be raised at any stage as was held in the case of **Kenya Ports Authority v Modern Holdings [E.A] Limited [2017] KECA 293 (KLR):** ***“We have stressed that jurisdiction is such a fundamental matter that it can be raised at any stage and even on appeal, though it is always prudent to raise it as soon as the occasion arises. It can be raised at any time, in any manner, even for the first time on appeal, or even viva voce and indeed, even by the court itself provided that where the court raises it suo moto parties are to be accorded the opportunity to be heard”*** 12. It is noteworthy that the Respondents do not dispute the facts raised by the Applicant and, in fact, by acknowledgment, they stated that in the Lease-Purchase Agreement dated 19th July, 2022. The said clause prescribes as follows; ***“GOVERNING LAW: Urgent court of the BVI or South African urgent Court.”*** 13. The Plaintiffs, submit that the Preliminary Objection is fatally compromised by the Defendant’s own conduct. The Plaintiffs argue that the Defendant entered an unconditional appearance on 18th April, 2023. It also filed a substantive application to set aside an interlocutory judgment on 05th June, 2023. Upon succeeding in the Motion it subsequently filed an unconditional Statement of Defence on the merits on 16th December, 2024. Therefore, the Defendant has unequivocally submitted to the jurisdiction of this Court. The Plaintiffs submit that any jurisdictional protest must be raised via a conditional appearance, which the Defendant failed to do. Furthermore, the Plaintiffs contend that the designated foreign courts do not formally exist, rendering the clause ambiguous, null, and void. 14. The crux of this dispute lies in the legal consequence of a Defendant participating in a suit while concurrently harbouring an objection to the forum. 15. It is a well-established tenet of civil procedure and private international law that a party who wishes to challenge the jurisdiction of a Court based on an exclusive foreign jurisdiction clause or an arbitration clause must do so at the earliest available opportunity. The established procedural mechanism for such a challenge is entering a conditional appearance or an appearance under protest, followed immediately by an application to stay the proceedings or strike out the suit. 16. The Courts have consistently held that once a Defendant participates in the suit by filing a defence without maintaining a protest, the Court assumes jurisdiction, and there is an effective ouster or waiver of the arbitral or foreign jurisdiction clause. 17. The leading decision on this principle is **United India Insurance Co Ltd v East African Underwriters (Kenya) Ltd [1985] KECA 39 (KLR)**, where **Madan, JA** *(as he then was)* held that while an exclusive jurisdiction clause should normally be respected, the Court retains discretion to assume jurisdiction over an agreement performed in Kenya. More pointedly, in **Evergreen Marine (Singapore), PTE Limited & Gulf Badar Group (Kenya) Limited v Petra Development Services Limited [2016] KECA 260 (KLR)**, cited by the Plaintiffs, clarified the doctrine of waiver by conduct as follows: *"Where parties have bound themselves on the jurisdiction and the law to govern the transaction, a party, by conduct may be presumed to have waived the term and submitted to the jurisdiction of the local courts. The well-known circumstances where a party is so presumed include where the party upon service of summons enters appearance without protesting jurisdiction like the appellants initially did. For the exclusive jurisdiction clause to have effect it must be clear to all that jurisdiction is protested at the earliest point of entering appearance. A defendant like in the case of United India Insurance Co. Ltd (supra) can enter appearance in protest and quickly follow it with an application for stay of all further proceedings or for the dismissal of the suit on account of lack of jurisdiction."* 18. Applying these binding principles to the instant suit, the Defendant's conduct is glaringly inconsistent with a genuine protest against this Court's jurisdiction. It denies the jurisdiction of this Court yet it has for all intents and purposes been actively litigating before it without any reservations. 19. It is a fundamental principle of law that a party cannot approbate and reprobate. It is an affront to the administration of justice for a Defendant to actively seek the protection and discretionary favour of the Kenyan High Court to set aside a judgment, dive into the substantive merits of the dispute by filing a comprehensive Statement of Defence, and then turn around to claim that the very Court that rescued it from a default judgment lacks the jurisdiction to hear the matter. In this case, the Defendant filed an application to set aside an interlocutory judgment and filed a defence; it did not refer the matter to the foreign Courts. 20. The Court finds that by participating in the suit through the filing of an application to set aside the interlocutory judgment and subsequently filing an unconditional Statement of Defence on the merits, the Defendant wholly submitted itself to the jurisdiction of this Court. The foreign jurisdiction clause, whatever its original validity, was ousted and waived by the Defendant's deliberate procedural choices. 21. The Court must finally address the principle of the judicial sovereignty of Kenyan Courts, as enshrined in the Constitution of Kenya, 2010. **Article 165(3)(a) of the Constitution** vests the High Court with unlimited original jurisdiction in civil and criminal matters. 22. While Kenyan Courts deeply respect private international law, international comity, and the freedom of contract—including forum selection clauses—this respect does not equate to a blind abdication of our constitutional mandate. A Kenyan Court should not defer to a foreign Court where doing so would occasion a gross injustice, where the connecting factors heavily favour Kenya, or where the designated foreign forum is procedurally illusory. 23. The Defendant is a limited liability company incorporated in Kenya, operating within Kenya, and regulated by the Kenya Civil Aviation Authority (KCAA). The economic impact of the transaction, the delivery requirements, and the alleged breach reverberate squarely within this jurisdiction. 24. More critically, the Plaintiffs have pointed out a glaring ambiguity in the jurisdictional clause itself. The agreement purports to vest jurisdiction in the "Urgent court of the BVI or South African urgent Court". This Court takes judicial notice, as submitted by the Plaintiffs, that the formal judicatures of the **Republic of South Africa (governed by Chapter 8 of the South African Constitution, 1996)** and the **British Virgin Islands (governed by the Virgin Islands Constitution Order, 2007)** do not establish standalone constitutional or statutory bodies known as the "Urgent Court". While superior Courts in those jurisdictions possess procedural mechanisms for "urgent cause lists" or "urgent applications," a distinct, standalone judicial entity known as the "Urgent Court" to which exclusive jurisdiction can be contractually ceded is a profound misnomer resulting in contractual ambiguity. 25. As held in **Halima Gababa Abdulahi v Lee Kinyanjui & another [2019] KEELRC 1777 (KLR)**, where a clause refers to a non-existent entity or is inherently ambiguous, the local Court retains its original jurisdiction. To decline jurisdiction and refer the Plaintiffs to a non-existent judicial body would be a dereliction of this Court's constitutional duty to ensure access to justice under **Article 48 of the Constitution**. The Kenyan High Court will not surrender its sovereignty to dispatch litigants on a futile expedition to foreign lands based on a defectively drafted clause that references phantom courts. 26. The Defendant, a Kenyan corporate citizen, happily utilized the coercive and equitable powers of this Court when it needed to rescue itself from the precipice of an interlocutory judgment. It cannot now be heard to declare that the sovereign Courts of Kenya are inadequate or lack jurisdiction to hear the substantive merits of the very dispute it has already comprehensively defended. 27. The Court finds that the Defendant's Preliminary Objection is an afterthought, procedurally unsustainable, and designed to derail the expeditious disposal of this suit. By unconditionally appearing, vigorously contesting the interlocutory judgment, and filing a substantive Statement of Defence, the Defendant waived whatever rights it may have possessed under the forum selection clause. The jurisdiction of the High Court of Kenya is fully and properly seized of this matter. 28. In light of this, the Court finds that the Preliminary Objection is not merited. The same is overruled and dismissed with costs. 29. As to costs the same lie at the discretion of this Court and ordinarily follow the event. The costs are awarded to the Plaintiffs. **Determination** 30. The Court determines the Defendant’s Notice of Preliminary Objection as follows: 1. *The Notice of Preliminary Objection dated 17th April, 2023 is overruled and is HEREBY dismissed.* 2. *The costs thereof are awarded to the Plaintiffs.* 31. It is so ordered. **DATED, SIGNED AND DELIVERED AT MILIMANI THIS 27TH DAY OF JULY, 2026.** **NJOROGE BENJAMIN K.** **JUDGE** In the presence of: Mr. Onyancha for the Plaintiffs. Mr. Mwangi for the Defendant. Mr. John Paul - Court Assistant.