'
1. Before me in the notice motion dated 28/8/2025 brought under sections 238 and 239 of the Companies Act, order 51 Rule 1 of Civil Procedure Rule, sections 1A, 2B, 3, 3A of Civil Procedure Act.
2. The applicant seeks inter alia;
(1) THAT the 1" Applicant be granted leave to commence a Derivative Claim against the 1st -3rd Respondents seeking relief on behalf of the 2nd Applicant in respect of the acts and omissions by the Respondents, involving illegal disposal of assets, negligence, default, breach of duty and breach of trust in their capacity as Directors of the 2nd Applicant on such terms as the Honourable Court considers fit.
(2) THAT pending the hearing and determination of this Application a temporary injunction do issue restraining the 1-3rd Respondents, their servants, agents and/or employees from selling, alienating, transferring, charging, disposing, removing or in any way manner whatsoever dealing with any of the assets of the 2nd Applicant.
(3) THAT pending the hearing and determination of this Application, a temporary injunction do issue restraining the 4 Respondents, their servants, agents and/or employees from fencing off, selling, alienating, transferring, charging, disposing, removing or in any manner whatsoever dealing with all that parcel of land (Marwa Hill) known as LR No Kalembwani/Konza South Block 2/1688.
(4) THAT pending the hearing and determination of the intended Derivative Claim, a temporary injunction do issue restraining the 4 Respondent, their servants, agents and/or employees from fencing off, selling, alienating, transferring, charging, disposing, removing or in any manner whatsoever dealing with all that parcel of land (Marwa Hill) known as L.R No Kalembwani/Konza South Block 2/1688.
(5) THAT pending the hearing and determination of the intended Derivative Claim, the 1st -3rd Respondents be compelled to produce the Memo and Articles of Association, the books of records, banking slips, audited financial accounts and bank statements of the 2nd Applicant Company in their custody from the date of their appointment to date,
3. The application is supported by ground on its face - and the supporting affidavit of Jonah Kisilu Mutunga sworn on 28/8/2025 inter alia;
(1) THAT the Applicant is a director/shareholder of the 2nd Applicant alongside the 1st to 3rd Respondents and the owner of L.R No Kalembwani/Konza South Block 2/1819 neighbouring Marwa Hill but is unable to access any Company documents including the CR12 because the Respondents have not linked the same on the BRS.
(2) THAT on 9th June 2025, the 1 Applicant learnt that the 1-3 respondents had sold the 2nd Applicant''s (Marwa Hill) known as L.R No Kalembwani/Konza South Block 2/1688 to the 4th Respondent on 17th December 2024 despite his written objection and without any approval by the shareholders leaving the over 900 members who are largely farmers without grazing zones .
4. He depones that he is a director/shareholder of the 2nd applicant – alongside the 1st to 3rd respondent, and owner of LR No. Kalembwani/Konza South Block 2/1810 neighbouring Marwa Hill where he has a home and farm. His concern is that the four directors of the 2nd applicant have had meetings to discuss the proposal of the sale of Marwa Hill aka LR No. Kalembwani/Konza South/Block 2/1688 sometimes in December 2024. That on 9/6/2025 he conducted search at the lands office and found that the said parcel of land had been “illegally sold” and “transferred” to the 4th respondent on 17/12/2024 after he had raised on objection with the chair – and that at the time of filing this application the 4th respondent was in the process of fencing off the hill – and had blocked the access road to all neighbouring parcels in including access to his own – home.
5. The 4th respondent filed a Preliminary Objection dated 8/9/2025 on the ground that the court does not have jurisdiction to hear the application it concerns land dispute which is under the exclusive jurisdiction of the Environment & Land Court as provided for under Article 162 (2) (b) of the Constitution of Kenya.
6. The 4th respondent submits that applicant’s claim revolves around the ownership, title and use of land in relation to Kalembwani/Konza South Block 2/1688 and that is within the exclusive jurisdiction of the ELC court.
7. On jurisdiction he relies on Owners of a Motor Vehicle “Lilian S” Vs Caltex Oil (Kenya) LTD (1989) KLR 1 where it was held;
"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 ."
He also relies on Republic v Karisa Chengo & 2 Others [2017] eKLR, the Supreme Court held that:
The specialized courts exercise jurisdiction only in the specific areas identified by the Constitution and statutes, while the High Court exercises jurisdiction in the residual matters.
Thus, where the Constitution has created specialized courts, those courts are the fora for disputes falling within their jurisdiction."
the Court of Appeal in Co-operative Bank of Kenya Limited v Patrick Kang''ethe Njuguna & 5 Others [2017] eKLR where it was stated:-
Jurisdiction is determined on the basis of pleadings and reliefs sought and not on the drafting skills of counsel. If the matter, in substance, relates to the use, occupation and title to land, then it falls squarely within the jurisdiction of the ELC."
And the High Court in Pamoja Women Development Programme & 3 Others vs Jackson Kihuba Wangombe & Another [2016] eKLR where the court stated:
"The court must not be hoodwinked by the manner of drafting. If the substratum of the dispute is land, then only the ELC has jurisdiction."
In Suzanne Achieng Butler & 4 Others vs Redhill Heights Investments Limited & Another [2016] eKLR , the Court held;
" Jurisdiction is conferred by the Constitution or statute. The High Court cannot arrogate to itself jurisdiction where the Constitution expressly provides otherwise."
On what amounts to a P.O he relies on Oraro vs Mbaja [2005] eKLR . It was held that:
"A preliminary objection correctly understood is a point of law which must not be blurred with factual details liable to be contested and in any event, to be proved through the process of evidence .”
8. He argues that jurisdiction is a pure point of law and the court in duty bound to resolve it before delving into the merits of the application.
9. It is submitted that these authorities demonstrated that a dispute touching on land and title thereto are matters for the Environment and Land Court and not the High Court.
10. The 1st and 3rd respondents also cite Owners of the Motor Vehicle “Lilian S” Vs Caltex Oil (Kenya) LTD (1989) 1KLR
It is submitted that jurisdiction is determined from the perusal of the pleadings and cause of action and that it is clearly evident that the issue here is the use and occupation of Kalembwani/Konza South Block 2/ 1688. He cites section 13 of the ELC court, and Article 162 (2) and (3) of the constitution.
11. In response to their submissions – it is submitted that the 1st applicant is a shareholder/ director of the 2nd respondent with over 900 members while the 4th respondent is a beneficiary of the sale of one of the most important company assets LR Kalembwani/Konza South Block 2/ 1688 known as Marwa Hill.
12. That over the years the respondents have failed to account for the assets of the company, excluded the applicant – that the 1st to 3rd respondent have failed to call an AGM, file returns, declare profits, render account/avail company records – abdicated their fiduciary duty acted ultra vires.
13. It is submitted that the P.O herein cannot be determined without an investigation of the facts, which are liable to be contested, and which are to be proved through evidence. That ordinarily under the rule in Foss vs Harbottle – it is the company that would file the matter where it has been wronged but, in this case, – it is the exception as the wrong doers are directors of the company.
14. The applicant relies on section 238 of the Companies Act "238. Interpretation: Part XI
(1) In this Part, "derivative claim" means proceedings by a member of a company-
(a) In respect of a cause of action vested in the company; and
(b) Seeking relief on behalf of the company.
(2) A derivative claim may be brought only-
(a) Under this Part; or
(b) In accordance with an order of the Court in proceedings for protection of members against unfair prejudice brought under this Act .
The applicant also relies on Ghelani Metals Limited and 3others vs Elesh Ghelani Natwarlal and Another [2017] KEHC 4629 (KLR) which affirmed the statutory framework under the Companies’ Act stating;
“Statutory procedure is now the exclusive method of pursuing derivative claims. The Act sets out what sorts of company claims may be pursued and is also explicit that derivative claims may only be pursued under the Act.”
15. Regarding the question of jurisdiction, it is submitted that the court’s jurisdiction flows form the Constitution or legislation or both – see Supreme Court in Samuel Kamau Macharia and Another Vs KCB LTD And 2 Others Civil Application No. 2/2011.
16. That regarding derivative claims, the Companies Act defines court – as the High Court unless other court is specifically mentioned. It is submitted therefore, that the ELC/ELRC do not have this jurisdiction and leave to bring a derivative claim can only be obtained from the High Court as by law set out.
17. From the foregoing the only issue for determination is whether this court has jurisdiction to hear determine the matter herein.
18. It is not in dispute that the applicant states that he is seeking leave to bring a derivative claim on behalf of the company. On that specific issue there would be no question about which court has jurisdiction because by law the jurisdiction lies with the High Court only.
19. But is this matter about leave to file a derivative claim?
20. This can be gleaned from the pleadings, from the cause of action which determine whether the court has jurisdiction.
21. The applicant clearly states that he is the owner of LR Kalembwani/Konza South Block 2/1810 – which neighbours Kalembwani/Konza South Block 2/1688 which he says is an asset of the company. He confirms that this parcel of land has already been sold – and he is here because of his individual issues that have emerged as a consequence of the said sale: that due to the said sale he cannot access his home.
22. There is an issue here about land – the sale of the land, the use and occupation of the land – a dispute had arisen between him, and the 4th respondent – it is about the use of Marwa Hill – and his own property – 1810.
Whether or not the sale was unlawful or the transfer of the land was illegal – is for the ELC court to determine – because what stands out from the applicant’s pleadings is that the use of LR 1688 by its new users is affecting his use of LR 1810 and this court needs to stop them before they go any further.
Whether the 4th respondent has lawful title to the land is not an issue for this court - that is an issue from the ELC court.
Hence – while the applicant states that the land belonged to the company and was sold illegally – title has passed to the 4th respondent – and it is the ELC court that is empowered to look behind the title and see what happened and decide what to do with the parcel of land – this court cannot do that.
While the matter presents as an application for leave for a derivative action – in my reading of the pleadings the real cause of action appears to me to be the dispute between the applicant and the 4th respondent over use of the land no. 1688 – vis a vis the use and occupation of 1810.
It is for that reason that I find that the P.O is sustainable and decline jurisdiction.
The P.O is sustained and the matter is struck out for want of jurisdiction.
Dated, signed and delivered vis CTS this 14th November 2025
Mumbua T Matheka
Judge
CA Chrispol
'
1. Before me in the notice motion dated 28/8/2025 brought under sections 238 and 239 of the Companies Act, order 51 Rule 1 of Civil Procedure Rule, sections 1A, 2B, 3, 3A of Civil Procedure Act.
2. The applicant seeks inter alia;
(1) THAT the 1" Applicant be granted leave to commence a Derivative Claim against the 1st -3rd Respondents seeking relief on behalf of the 2nd Applicant in respect of the acts and omissions by the Respondents, involving illegal disposal of assets, negligence, default, breach of duty and breach of trust in their capacity as Directors of the 2nd Applicant on such terms as the Honourable Court considers fit.
(2) THAT pending the hearing and determination of this Application a temporary injunction do issue restraining the 1-3rd Respondents, their servants, agents and/or employees from selling, alienating, transferring, charging, disposing, removing or in any way manner whatsoever dealing with any of the assets of the 2nd Applicant.
(3) THAT pending the hearing and determination of this Application, a temporary injunction do issue restraining the 4 Respondents, their servants, agents and/or employees from fencing off, selling, alienating, transferring, charging, disposing, removing or in any manner whatsoever dealing with all that parcel of land (Marwa Hill) known as LR No Kalembwani/Konza South Block 2/1688.
(4) THAT pending the hearing and determination of the intended Derivative Claim, a temporary injunction do issue restraining the 4 Respondent, their servants, agents and/or employees from fencing off, selling, alienating, transferring, charging, disposing, removing or in any manner whatsoever dealing with all that parcel of land (Marwa Hill) known as L.R No Kalembwani/Konza South Block 2/1688.
(5) THAT pending the hearing and determination of the intended Derivative Claim, the 1st -3rd Respondents be compelled to produce the Memo and Articles of Association, the books of records, banking slips, audited financial accounts and bank statements of the 2nd Applicant Company in their custody from the date of their appointment to date,
3. The application is supported by ground on its face - and the supporting affidavit of Jonah Kisilu Mutunga sworn on 28/8/2025 inter alia;
(1) THAT the Applicant is a director/shareholder of the 2nd Applicant alongside the 1st to 3rd Respondents and the owner of L.R No Kalembwani/Konza South Block 2/1819 neighbouring Marwa Hill but is unable to access any Company documents including the CR12 because the Respondents have not linked the same on the BRS.
(2) THAT on 9th June 2025, the 1 Applicant learnt that the 1-3 respondents had sold the 2nd Applicant''s (Marwa Hill) known as L.R No Kalembwani/Konza South Block 2/1688 to the 4th Respondent on 17th December 2024 despite his written objection and without any approval by the shareholders leaving the over 900 members who are largely farmers without grazing zones .
4. He depones that he is a director/shareholder of the 2nd applicant – alongside the 1st to 3rd respondent, and owner of LR No. Kalembwani/Konza South Block 2/1810 neighbouring Marwa Hill where he has a home and farm. His concern is that the four directors of the 2nd applicant have had meetings to discuss the proposal of the sale of Marwa Hill aka LR No. Kalembwani/Konza South/Block 2/1688 sometimes in December 2024. That on 9/6/2025 he conducted search at the lands office and found that the said parcel of land had been “illegally sold” and “transferred” to the 4th respondent on 17/12/2024 after he had raised on objection with the chair – and that at the time of filing this application the 4th respondent was in the process of fencing off the hill – and had blocked the access road to all neighbouring parcels in including access to his own – home.
5. The 4th respondent filed a Preliminary Objection dated 8/9/2025 on the ground that the court does not have jurisdiction to hear the application it concerns land dispute which is under the exclusive jurisdiction of the Environment & Land Court as provided for under Article 162 (2) (b) of the Constitution of Kenya.
6. The 4th respondent submits that applicant’s claim revolves around the ownership, title and use of land in relation to Kalembwani/Konza South Block 2/1688 and that is within the exclusive jurisdiction of the ELC court.
7. On jurisdiction he relies on Owners of a Motor Vehicle “Lilian S” Vs Caltex Oil (Kenya) LTD (1989) KLR 1 where it was held;
"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 ."
He also relies on Republic v Karisa Chengo & 2 Others [2017] eKLR, the Supreme Court held that:
The specialized courts exercise jurisdiction only in the specific areas identified by the Constitution and statutes, while the High Court exercises jurisdiction in the residual matters.
Thus, where the Constitution has created specialized courts, those courts are the fora for disputes falling within their jurisdiction."
the Court of Appeal in Co-operative Bank of Kenya Limited v Patrick Kang''ethe Njuguna & 5 Others [2017] eKLR where it was stated:-
Jurisdiction is determined on the basis of pleadings and reliefs sought and not on the drafting skills of counsel. If the matter, in substance, relates to the use, occupation and title to land, then it falls squarely within the jurisdiction of the ELC."
And the High Court in Pamoja Women Development Programme & 3 Others vs Jackson Kihuba Wangombe & Another [2016] eKLR where the court stated:
"The court must not be hoodwinked by the manner of drafting. If the substratum of the dispute is land, then only the ELC has jurisdiction."
In Suzanne Achieng Butler & 4 Others vs Redhill Heights Investments Limited & Another [2016] eKLR , the Court held;
" Jurisdiction is conferred by the Constitution or statute. The High Court cannot arrogate to itself jurisdiction where the Constitution expressly provides otherwise."
On what amounts to a P.O he relies on Oraro vs Mbaja [2005] eKLR . It was held that:
"A preliminary objection correctly understood is a point of law which must not be blurred with factual details liable to be contested and in any event, to be proved through the process of evidence .”
8. He argues that jurisdiction is a pure point of law and the court in duty bound to resolve it before delving into the merits of the application.
9. It is submitted that these authorities demonstrated that a dispute touching on land and title thereto are matters for the Environment and Land Court and not the High Court.
10. The 1st and 3rd respondents also cite Owners of the Motor Vehicle “Lilian S” Vs Caltex Oil (Kenya) LTD (1989) 1KLR
It is submitted that jurisdiction is determined from the perusal of the pleadings and cause of action and that it is clearly evident that the issue here is the use and occupation of Kalembwani/Konza South Block 2/ 1688. He cites section 13 of the ELC court, and Article 162 (2) and (3) of the constitution.
11. In response to their submissions – it is submitted that the 1st applicant is a shareholder/ director of the 2nd respondent with over 900 members while the 4th respondent is a beneficiary of the sale of one of the most important company assets LR Kalembwani/Konza South Block 2/ 1688 known as Marwa Hill.
12. That over the years the respondents have failed to account for the assets of the company, excluded the applicant – that the 1st to 3rd respondent have failed to call an AGM, file returns, declare profits, render account/avail company records – abdicated their fiduciary duty acted ultra vires.
13. It is submitted that the P.O herein cannot be determined without an investigation of the facts, which are liable to be contested, and which are to be proved through evidence. That ordinarily under the rule in Foss vs Harbottle – it is the company that would file the matter where it has been wronged but, in this case, – it is the exception as the wrong doers are directors of the company.
14. The applicant relies on section 238 of the Companies Act "238. Interpretation: Part XI
(1) In this Part, "derivative claim" means proceedings by a member of a company-
(a) In respect of a cause of action vested in the company; and
(b) Seeking relief on behalf of the company.
(2) A derivative claim may be brought only-
(a) Under this Part; or
(b) In accordance with an order of the Court in proceedings for protection of members against unfair prejudice brought under this Act .
The applicant also relies on Ghelani Metals Limited and 3others vs Elesh Ghelani Natwarlal and Another [2017] KEHC 4629 (KLR) which affirmed the statutory framework under the Companies’ Act stating;
“Statutory procedure is now the exclusive method of pursuing derivative claims. The Act sets out what sorts of company claims may be pursued and is also explicit that derivative claims may only be pursued under the Act.”
15. Regarding the question of jurisdiction, it is submitted that the court’s jurisdiction flows form the Constitution or legislation or both – see Supreme Court in Samuel Kamau Macharia and Another Vs KCB LTD And 2 Others Civil Application No. 2/2011.
16. That regarding derivative claims, the Companies Act defines court – as the High Court unless other court is specifically mentioned. It is submitted therefore, that the ELC/ELRC do not have this jurisdiction and leave to bring a derivative claim can only be obtained from the High Court as by law set out.
17. From the foregoing the only issue for determination is whether this court has jurisdiction to hear determine the matter herein.
18. It is not in dispute that the applicant states that he is seeking leave to bring a derivative claim on behalf of the company. On that specific issue there would be no question about which court has jurisdiction because by law the jurisdiction lies with the High Court only.
19. But is this matter about leave to file a derivative claim?
20. This can be gleaned from the pleadings, from the cause of action which determine whether the court has jurisdiction.
21. The applicant clearly states that he is the owner of LR Kalembwani/Konza South Block 2/1810 – which neighbours Kalembwani/Konza South Block 2/1688 which he says is an asset of the company. He confirms that this parcel of land has already been sold – and he is here because of his individual issues that have emerged as a consequence of the said sale: that due to the said sale he cannot access his home.
22. There is an issue here about land – the sale of the land, the use and occupation of the land – a dispute had arisen between him, and the 4th respondent – it is about the use of Marwa Hill – and his own property – 1810.
Whether or not the sale was unlawful or the transfer of the land was illegal – is for the ELC court to determine – because what stands out from the applicant’s pleadings is that the use of LR 1688 by its new users is affecting his use of LR 1810 and this court needs to stop them before they go any further.
Whether the 4th respondent has lawful title to the land is not an issue for this court - that is an issue from the ELC court.
Hence – while the applicant states that the land belonged to the company and was sold illegally – title has passed to the 4th respondent – and it is the ELC court that is empowered to look behind the title and see what happened and decide what to do with the parcel of land – this court cannot do that.
While the matter presents as an application for leave for a derivative action – in my reading of the pleadings the real cause of action appears to me to be the dispute between the applicant and the 4th respondent over use of the land no. 1688 – vis a vis the use and occupation of 1810.
It is for that reason that I find that the P.O is sustainable and decline jurisdiction.
The P.O is sustained and the matter is struck out for want of jurisdiction.
Dated, signed and delivered vis CTS this 14th November 2025
Mumbua T Matheka
Judge
CA Chrispol
'