1. The Plaintiff filed an application under Notice of Motion dated June 9, 2025, seeking the following orders:
a) Spent
b) Spent
c) Pending the hearing of this application, the 1st Defendant/Respondent be compelled to produce the true loan account and/or statement.
d) The Court be pleased to order the 1st Defendant to produce the true loan amount and the statement.
e) The Court be pleased to issue an order of injunction restraining the 2nd Defendant/respondent, their agents, servants, or employees from conducting a public auction or by private treaty and/or otherwise, all that parcel known as Nyeri Municipality Block 1/445, Nyeri, along Nyeri-Mathari Road, pending the hearing of the suit or further orders.
f) The costs of this Application are to be provided for.
2. The application is supported by the affidavit of Patrick Kinyua Munyito, a director of the Plaintiff/Applicant. He deposed that in 2009, the Applicant received financial accommodation from the 1st Respondent to import maize from abroad, with Land Parcel Nyeri Municipality Block 1/445 Nyeri as collateral.
3. At the time, the 1st Respondent undertook a valuation of the suit property, which, according to Gimco valuers, came to a sum of Kshs. 73 million as the market rate.
4. Since then, the Plaintiff states that they have made improvements and built additional buildings on the properties.
5. They also state that they have made substantial repayments. However, on May 7, 2025, a director of the Plaintiff was served with a document at a hotel stating that the 2nd Defendant will conduct a public auction on June 11, 2025.
6. That the said Notice was for 38 days, as opposed to the usual 45 days’ notice. Further, the Plaintiff had not been served with the three months’ notice by the Defendant, as required by section 90(2) of the Land Act.
7. They also depose that the notice cited the market value of the suit land as Kshs 35 million, with a forced value of Kshs 26 million, which is manifestly low given that it was earlier valued at Kshs. 73 million, and constitutes an undervaluation.
8. He deposed that he has secured a ready buyer for the suit property who is willing to purchase it for Kshs 75 million. Still, the 1st Defendant has refused to file its consent to the sale of the property to the interested buyer.
9. Further, that the 1st Defendant has refused to render a proper account and/or statement and has unilaterally and illegally changed interest contrary to section 44 of the Banking Act, Cap 488, Laws of Kenya.
10. The Applicant is apprehensive that if the public auction proceeds, they will suffer financial loss and the debt owing to them will not be recovered.
The 1st Defendant/Respondent’s replying affidavit
11. Judy Chege, the 1st Defendant/Respondent’s Manager, Remedial & Recoveries, swore an affidavit in response to the instant application on June 26, 2025. She deposed that the Applicant is a customer of the 1st Defendant/Respondent at the Kenyatta National Hospital Branch.
12. Regarding the Applicant’s prayer for the production of account statements, she deposed that the 1st Respondent has always supplied them upon the customer’s request.
13. Regarding the terms of engagement with the Applicant, she deposed that the total of the loan facility offered to the Applicant and the overdraft facility amounted to Kshs.26,565,692.10/=. The Applicant applied for an additional overdraft facility of Ksh.8,000,000/= and a term loan of Kshs.17,000,000/=. Together with the existing asset finance loan, the total was Ksh.41,315,692.10/=.
14. However, the Applicant defaulted on the repayment terms outlined in the letter of offer and, as of December 23, 2012, had a total outstanding debt of Kshs.71,138, 453.95/=. A letter of demand was issued to the Applicant on that date.
15. That the Applicant continued to default on its loan repayment arrangements, compelling the 1st Respondent to issue a 3-month statutory notice to the Applicant on 3rd April 2012 and then to issue a further 3-month notice on 9th July 2012.
16. The 1st Respondent made several attempts to realize the charged securities but was unsuccessful, partly due to threats issued by the Applicant to the intended purchasers.
17. The 1st Respondent’s position is that they are incurring substantial financial losses due to the Applicant’s persistent default. They further state that, if the prayers sought are granted, they will be denied the opportunity to recover the money advanced to the Plaintiff and will suffer great loss, damage, and gross injustice.
18. The 1st Respondent’s view is that, since the Applicant has been unable to repay the outstanding debt accruing since 2009, it is only fair that the charged securities be realized to enable the 1st Respondent to recover the outstanding loan debt. They denied declining to sign the consent form for a potential buyer that the Applicant presented to them.
19. The application was canvassed through written submissions; however, I did not see the Applicant’s written submissions.
The 1st Defendant/Respondent’s written submissions
20. Counsel for the 1st Respondent, pursuant to the Court's directive, submitted to the parties to address, by way of written submissions, the question of whether this court has jurisdiction to hear and determine this matter, given that it seemingly pertains to a charge over the suit property.
21. Counsel quoted Article 162(2) and (3) of the Constitution of Kenya, which sets out the Environment and Land Court's jurisdiction over the environment and the use and occupation of, and title to, land.
22. They also relied on the Environment and Land Court Act, which establishes the Environment and Land Court (ELC) and sets out its jurisdiction under section 13 as well as section 150 of the Land Act.
23. Regarding the jurisdiction question, their submission is that the present suit challenges the Bank's statutory power of sale. Thus, they contend that this court lacks jurisdiction to resolve the dispute. They relied on the Court’s decisions in Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna & 5 others [2017] KECA 79 (KLR) and Karisa Chengo & 2 others v Republic [2015] KECA 756 (KLR).
24. Their submission is that the law makes no explicit provision for matters relating to the enforcement of a charge and that Section 150 of the Land Act does not extend such jurisdiction to the ELC.
25. The 1st Respondent also cited the Court of Appeal’s decision in Bank of Africa Kenya Limited & another v TSS Investment Limited & 2 others [2024] KECA 410 (KLR), in which it was held that the Environment and Land Court (ELC) lacks jurisdiction to hear and determine disputes over mortgages, charges, or any contract not connected to or incidental to the "use" of land.
26. It is submitted that, in determining whether the ELC has jurisdiction in a matter, the test is whether the dominant issue in the dispute relates to the environment and the use and occupation of, and title to, land, as established in Butler & 4 others v Redhill Heights Investments Limited & another [2016] KEHC 1313 (KLR).
27. It is their submission that the dispute arises from a commercial matter and concerns either the nature of the sale or the terms of the aforementioned formal charge. The 1st Respondent prays that the suit and the application dated 9th June 2025 be dismissed with costs to the defendant.
Analysis and determination
28. This suit and the instant application relate to the Plaintiff’s and the 1st Respondent’s relationship, in which the Plaintiff sought loan facilities from the 1st Respondent Bank, secured, among other securities, by a charge over Land Parcel Nyeri Municipality Block 1/445. The property was scheduled for public auction on June 11, 2025, but the auction was stayed pending the hearing and determination of the instant application dated June 9, 2025.
29. On October 28, 2025, the Court directed the parties, for purposes of prosecuting this matter, to file submissions in the jurisdiction of the Court to hear and determine this matter.
30. Jurisdiction is fundamental because it is everything, and the court cannot take any further steps if it lacks the requisite jurisdiction. The often-cited case on jurisdiction is Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] eKLR, where the Court held that:
“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 down tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.”
31. The jurisdiction of this court is established under Article 162(2)(b) of the Constitution, which provides that Parliament shall establish courts with the status of the High Court to hear and determine disputes relating to the environment and to the use and occupation of, and title to, land. To give effect to Article 162(2)(b) of the Constitution, Parliament enacted the Environment & Land Court Act. Section 13(2) of the Act provides as follows:
“In exercise of its jurisdiction under Article 162(2)(b) of the Constitution, the Court shall have power to hear and determine disputes –
(a) relating to environmental planning and protection, climate issues, land use planning, title, tenure, boundaries, rates, rents, valuations, mining, minerals and other natural resources;
(b) relating to compulsory acquisition of land;
(c) relating to land administration and management;
(d) relating to public, private and community land and contracts, choses in action or other instruments granting any enforceable interests inland; and (e) any other dispute relating to environment and land.”
32. Further to this, Section 150 of the Land Act provides as follows:
“The Environment and Land Court established in the Environment and Land Court Act (Cap. 8D) and the subordinate courts as empowered by any written law shall have jurisdiction to hear and determine disputes, actions and proceedings concerning land under this Act.”
33. The Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna & 5 others [2017] eKLR is the case relied upon by the 1st Defendant/Respondent in which the Court of Appeal held as follows:
“The jurisdiction of the ELC to deal with disputes relating to contracts under Section 13 of the ELC Act ought to be understood within the context of the court’s jurisdiction to deal with disputes connected to “use” of land as discussed herein above. Such contracts, in our view, ought to be incidental to the “use” of land; they do not include mortgages, charges, collection of dues and rents which fall within the civil jurisdiction of the High Court.”
34. Ngugi J (as he then was) in the case of Suzanne Achieng Butler & 4 others v Redhill Heights Investments Limited & another [2016] eKLR discussed the predominant purpose test, the importance of distinguishing the predominant issue in a case to determine the court in which jurisdiction over the matter lies, and highlighted that:
“When faced with a controversy whether a particular case is a dispute about land (which should be litigated at the ELC) or not, the Courts utilize the Pre-dominant Purpose Test: In a transaction involving both a sale of land and other services or goods, jurisdiction lies at the ELC if the transaction is predominantly for land, but the High Court has jurisdiction if the transaction is predominantly for the provision of goods, construction, or works.”
35. Similarly, Munyao J (as he then was) observed in Lydia Nyambura Mbugua v Diamond Trust Bank Kenya Limited & another [2018] eKLR, holding that:
“The Constitution uses an exclusion method, and in simple terms, what falls within the jurisdiction of the ELC and ELRC, cannot fall within the jurisdiction of the High Court by dint of the provisions of Article 165 (5) of the Constitution. But then, one may ask, what if I have a matter which brings forth various issues, some of which fall within the jurisdiction of the High Court or Employment and Labour Relations Court (ELRC) and some falling within the jurisdiction of the ELC, and yet such dispute cannot be severed for the different issues to be heard in different courts" That is a case with mixed issues, some falling within the jurisdiction of the ELC and some falling within the jurisdiction of the High Court or ELRC, the three superior courts with equal status. In such instance one needs to find out what the predominant issue in the case is, and file suit in the court which has jurisdiction to hear the predominant issue.”
36. The Court must therefore apply the predominant purpose test to determine whether it has jurisdiction to hear and determine the suit. The issue herein is whether the 1st Defendant can auction the suit property under its statutory power of sale to recover the amount the Plaintiff owes to it, a debt the Plaintiff has not denied.
37. In Bank of Africa Kenya Limited & another v TSS Investment Limited & 2 others (Civil Appeal E055 of 2022) [2024] KECA 410 (KLR), the Learned Judges of Appeal held that:
“In view of the foregoing, the only question that falls to be determined is whether the respondents’ suit against the appellants involved “… matters relating to environment and the use and occupation, and title to land”. We do not think so. In our considered view, the issues in contention in the suit, and the purpose for which the respondents moved the trial court for the injunctive relief sought and granted in the impugned ruling, were intended to forestall the 1 st appellant’s exercise of its statutory power of sale over the suit properties on the basis of the alleged tenancy relationship with the 3rd respondent.”
38. Consequently, the issues herein concern an outstanding debt, not the environment, the use and occupation of, or title to, land. Therefore, the Court lacks jurisdiction to hear and determine this matter, which falls outside its scope. Accordingly, the application dated 9th June 2024, as well as the entire suit, cannot be sustained. The Court downs its tools; they are struck out with costs.
Dated, signed, and delivered virtually in Nyeri on this 29th day of April, 2026.
E. K. MAKORI
JUDGE
In the Presence of:
Mr. Murage for the Plaintiff
Dennis: Court Assistant
In the Absence of:
Mr. Kiminda for the 1st Defendant
a) Spent
b) Spent
c) Pending the hearing of this application, the 1st Defendant/Respondent be compelled to produce the true loan account and/or statement.
d) The Court be pleased to order the 1st Defendant to produce the true loan amount and the statement.
e) The Court be pleased to issue an order of injunction restraining the 2nd Defendant/respondent, their agents, servants, or employees from conducting a public auction or by private treaty and/or otherwise, all that parcel known as Nyeri Municipality Block 1/445, Nyeri, along Nyeri-Mathari Road, pending the hearing of the suit or further orders.
f) The costs of this Application are to be provided for.
2. The application is supported by the affidavit of Patrick Kinyua Munyito, a director of the Plaintiff/Applicant. He deposed that in 2009, the Applicant received financial accommodation from the 1st Respondent to import maize from abroad, with Land Parcel Nyeri Municipality Block 1/445 Nyeri as collateral.
3. At the time, the 1st Respondent undertook a valuation of the suit property, which, according to Gimco valuers, came to a sum of Kshs. 73 million as the market rate.
4. Since then, the Plaintiff states that they have made improvements and built additional buildings on the properties.
5. They also state that they have made substantial repayments. However, on May 7, 2025, a director of the Plaintiff was served with a document at a hotel stating that the 2nd Defendant will conduct a public auction on June 11, 2025.
6. That the said Notice was for 38 days, as opposed to the usual 45 days’ notice. Further, the Plaintiff had not been served with the three months’ notice by the Defendant, as required by section 90(2) of the Land Act.
7. They also depose that the notice cited the market value of the suit land as Kshs 35 million, with a forced value of Kshs 26 million, which is manifestly low given that it was earlier valued at Kshs. 73 million, and constitutes an undervaluation.
8. He deposed that he has secured a ready buyer for the suit property who is willing to purchase it for Kshs 75 million. Still, the 1st Defendant has refused to file its consent to the sale of the property to the interested buyer.
9. Further, that the 1st Defendant has refused to render a proper account and/or statement and has unilaterally and illegally changed interest contrary to section 44 of the Banking Act, Cap 488, Laws of Kenya.
10. The Applicant is apprehensive that if the public auction proceeds, they will suffer financial loss and the debt owing to them will not be recovered.
The 1st Defendant/Respondent’s replying affidavit
11. Judy Chege, the 1st Defendant/Respondent’s Manager, Remedial & Recoveries, swore an affidavit in response to the instant application on June 26, 2025. She deposed that the Applicant is a customer of the 1st Defendant/Respondent at the Kenyatta National Hospital Branch.
12. Regarding the Applicant’s prayer for the production of account statements, she deposed that the 1st Respondent has always supplied them upon the customer’s request.
13. Regarding the terms of engagement with the Applicant, she deposed that the total of the loan facility offered to the Applicant and the overdraft facility amounted to Kshs.26,565,692.10/=. The Applicant applied for an additional overdraft facility of Ksh.8,000,000/= and a term loan of Kshs.17,000,000/=. Together with the existing asset finance loan, the total was Ksh.41,315,692.10/=.
14. However, the Applicant defaulted on the repayment terms outlined in the letter of offer and, as of December 23, 2012, had a total outstanding debt of Kshs.71,138, 453.95/=. A letter of demand was issued to the Applicant on that date.
15. That the Applicant continued to default on its loan repayment arrangements, compelling the 1st Respondent to issue a 3-month statutory notice to the Applicant on 3rd April 2012 and then to issue a further 3-month notice on 9th July 2012.
16. The 1st Respondent made several attempts to realize the charged securities but was unsuccessful, partly due to threats issued by the Applicant to the intended purchasers.
17. The 1st Respondent’s position is that they are incurring substantial financial losses due to the Applicant’s persistent default. They further state that, if the prayers sought are granted, they will be denied the opportunity to recover the money advanced to the Plaintiff and will suffer great loss, damage, and gross injustice.
18. The 1st Respondent’s view is that, since the Applicant has been unable to repay the outstanding debt accruing since 2009, it is only fair that the charged securities be realized to enable the 1st Respondent to recover the outstanding loan debt. They denied declining to sign the consent form for a potential buyer that the Applicant presented to them.
19. The application was canvassed through written submissions; however, I did not see the Applicant’s written submissions.
The 1st Defendant/Respondent’s written submissions
20. Counsel for the 1st Respondent, pursuant to the Court's directive, submitted to the parties to address, by way of written submissions, the question of whether this court has jurisdiction to hear and determine this matter, given that it seemingly pertains to a charge over the suit property.
21. Counsel quoted Article 162(2) and (3) of the Constitution of Kenya, which sets out the Environment and Land Court's jurisdiction over the environment and the use and occupation of, and title to, land.
22. They also relied on the Environment and Land Court Act, which establishes the Environment and Land Court (ELC) and sets out its jurisdiction under section 13 as well as section 150 of the Land Act.
23. Regarding the jurisdiction question, their submission is that the present suit challenges the Bank's statutory power of sale. Thus, they contend that this court lacks jurisdiction to resolve the dispute. They relied on the Court’s decisions in Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna & 5 others [2017] KECA 79 (KLR) and Karisa Chengo & 2 others v Republic [2015] KECA 756 (KLR).
24. Their submission is that the law makes no explicit provision for matters relating to the enforcement of a charge and that Section 150 of the Land Act does not extend such jurisdiction to the ELC.
25. The 1st Respondent also cited the Court of Appeal’s decision in Bank of Africa Kenya Limited & another v TSS Investment Limited & 2 others [2024] KECA 410 (KLR), in which it was held that the Environment and Land Court (ELC) lacks jurisdiction to hear and determine disputes over mortgages, charges, or any contract not connected to or incidental to the "use" of land.
26. It is submitted that, in determining whether the ELC has jurisdiction in a matter, the test is whether the dominant issue in the dispute relates to the environment and the use and occupation of, and title to, land, as established in Butler & 4 others v Redhill Heights Investments Limited & another [2016] KEHC 1313 (KLR).
27. It is their submission that the dispute arises from a commercial matter and concerns either the nature of the sale or the terms of the aforementioned formal charge. The 1st Respondent prays that the suit and the application dated 9th June 2025 be dismissed with costs to the defendant.
Analysis and determination
28. This suit and the instant application relate to the Plaintiff’s and the 1st Respondent’s relationship, in which the Plaintiff sought loan facilities from the 1st Respondent Bank, secured, among other securities, by a charge over Land Parcel Nyeri Municipality Block 1/445. The property was scheduled for public auction on June 11, 2025, but the auction was stayed pending the hearing and determination of the instant application dated June 9, 2025.
29. On October 28, 2025, the Court directed the parties, for purposes of prosecuting this matter, to file submissions in the jurisdiction of the Court to hear and determine this matter.
30. Jurisdiction is fundamental because it is everything, and the court cannot take any further steps if it lacks the requisite jurisdiction. The often-cited case on jurisdiction is Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] eKLR, where the Court held that:
“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 down tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.”
31. The jurisdiction of this court is established under Article 162(2)(b) of the Constitution, which provides that Parliament shall establish courts with the status of the High Court to hear and determine disputes relating to the environment and to the use and occupation of, and title to, land. To give effect to Article 162(2)(b) of the Constitution, Parliament enacted the Environment & Land Court Act. Section 13(2) of the Act provides as follows:
“In exercise of its jurisdiction under Article 162(2)(b) of the Constitution, the Court shall have power to hear and determine disputes –
(a) relating to environmental planning and protection, climate issues, land use planning, title, tenure, boundaries, rates, rents, valuations, mining, minerals and other natural resources;
(b) relating to compulsory acquisition of land;
(c) relating to land administration and management;
(d) relating to public, private and community land and contracts, choses in action or other instruments granting any enforceable interests inland; and (e) any other dispute relating to environment and land.”
32. Further to this, Section 150 of the Land Act provides as follows:
“The Environment and Land Court established in the Environment and Land Court Act (Cap. 8D) and the subordinate courts as empowered by any written law shall have jurisdiction to hear and determine disputes, actions and proceedings concerning land under this Act.”
33. The Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna & 5 others [2017] eKLR is the case relied upon by the 1st Defendant/Respondent in which the Court of Appeal held as follows:
“The jurisdiction of the ELC to deal with disputes relating to contracts under Section 13 of the ELC Act ought to be understood within the context of the court’s jurisdiction to deal with disputes connected to “use” of land as discussed herein above. Such contracts, in our view, ought to be incidental to the “use” of land; they do not include mortgages, charges, collection of dues and rents which fall within the civil jurisdiction of the High Court.”
34. Ngugi J (as he then was) in the case of Suzanne Achieng Butler & 4 others v Redhill Heights Investments Limited & another [2016] eKLR discussed the predominant purpose test, the importance of distinguishing the predominant issue in a case to determine the court in which jurisdiction over the matter lies, and highlighted that:
“When faced with a controversy whether a particular case is a dispute about land (which should be litigated at the ELC) or not, the Courts utilize the Pre-dominant Purpose Test: In a transaction involving both a sale of land and other services or goods, jurisdiction lies at the ELC if the transaction is predominantly for land, but the High Court has jurisdiction if the transaction is predominantly for the provision of goods, construction, or works.”
35. Similarly, Munyao J (as he then was) observed in Lydia Nyambura Mbugua v Diamond Trust Bank Kenya Limited & another [2018] eKLR, holding that:
“The Constitution uses an exclusion method, and in simple terms, what falls within the jurisdiction of the ELC and ELRC, cannot fall within the jurisdiction of the High Court by dint of the provisions of Article 165 (5) of the Constitution. But then, one may ask, what if I have a matter which brings forth various issues, some of which fall within the jurisdiction of the High Court or Employment and Labour Relations Court (ELRC) and some falling within the jurisdiction of the ELC, and yet such dispute cannot be severed for the different issues to be heard in different courts" That is a case with mixed issues, some falling within the jurisdiction of the ELC and some falling within the jurisdiction of the High Court or ELRC, the three superior courts with equal status. In such instance one needs to find out what the predominant issue in the case is, and file suit in the court which has jurisdiction to hear the predominant issue.”
36. The Court must therefore apply the predominant purpose test to determine whether it has jurisdiction to hear and determine the suit. The issue herein is whether the 1st Defendant can auction the suit property under its statutory power of sale to recover the amount the Plaintiff owes to it, a debt the Plaintiff has not denied.
37. In Bank of Africa Kenya Limited & another v TSS Investment Limited & 2 others (Civil Appeal E055 of 2022) [2024] KECA 410 (KLR), the Learned Judges of Appeal held that:
“In view of the foregoing, the only question that falls to be determined is whether the respondents’ suit against the appellants involved “… matters relating to environment and the use and occupation, and title to land”. We do not think so. In our considered view, the issues in contention in the suit, and the purpose for which the respondents moved the trial court for the injunctive relief sought and granted in the impugned ruling, were intended to forestall the 1 st appellant’s exercise of its statutory power of sale over the suit properties on the basis of the alleged tenancy relationship with the 3rd respondent.”
38. Consequently, the issues herein concern an outstanding debt, not the environment, the use and occupation of, or title to, land. Therefore, the Court lacks jurisdiction to hear and determine this matter, which falls outside its scope. Accordingly, the application dated 9th June 2024, as well as the entire suit, cannot be sustained. The Court downs its tools; they are struck out with costs.
Dated, signed, and delivered virtually in Nyeri on this 29th day of April, 2026.
E. K. MAKORI
JUDGE
In the Presence of:
Mr. Murage for the Plaintiff
Dennis: Court Assistant
In the Absence of:
Mr. Kiminda for the 1st Defendant