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ELCAllowedMiscellaneous Application (2nd Respondent/Applicant's Notice of Motion dated 7th February 2025) in the pending appeal from the judgment of Hon. Y.M. Barasa

Mbaka (Suing as the Legal Administrator of the Estate of the Late Margaret Njoki Mbaka alias Njoki Mbaka) v Kiambu Nyakinyua Farmers Company Limited & another (Environment and Land Appeal E015 of 2024) (Environment and Land) [2025] KEELC 4277 (KLR)

Environment and Land Court
5 June 2025
3,236 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court paused a land case because no one could confirm who legitimately runs the defendant company.

What this practically means

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Executive summary

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This Environment and Land Court ruling at Naivasha, delivered by M.C. Oundo, J on 5th June 2025, determines a Notice of Motion dated 7th February 2025 by the 2nd Respondent/Applicant, a limited liability company, seeking a stay of the proceedings in the pending appeal (arising from a judgment of Hon. Y.M. Barasa concerning ownership of parcel Longonot/Kijabe Block 6/708) pending determination of Nairobi High Court Judicial Review Case No. E267 of 2024, which challenges an irregular change of the company's directors. The Applicant argued that without properly constituted directors it could not instruct counsel, file pleadings or defend itself, and that continuing would breach Sections 128-130 of the Companies Act and fetter its right to fair hearing. The Appellant and 1st Respondent opposed, contending that a company is a separate legal entity unaffected by internal directorship wrangles and that the Judicial Review orders had no bearing on the appeal, which turned purely on points of law. The court restated the high and stringent threshold for stay of proceedings, applying Kenya Wildlife Service v James Mutembei, the Global Tours & Travels discretion test, and Halsbury's Laws of England. Relying principally on the Supreme Court's decision in Githiga v Kiru Tea Factory Company Limited, the court held that where there is a genuine and serious dispute over who constitutes the legitimate board, a stay may issue until directorship is settled. The court found the application merited and stayed the proceedings pending determination of the 2nd Respondent's bona fide directors, awarding costs to the Applicant at lower scale as the application was undefended.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the present proceedings ought to be stayed pending determination of the Directorship of the 2nd Respondent in Nairobi High Court Judicial Review Case No. E267 of 2024
  2. 2.Whether the Applicant has shown that its application raises a substantial legal question with a reasonable prospect of success
  3. 3.Whether irreparable harm would be suffered if the proceedings are not stayed
  4. 4.Whether the potential harm from allowing the proceedings to continue outweighs the harm if a stay is granted
  5. 5.Whether it is in the public interest to stay the proceedings while the Judicial Review is ongoing
  6. 6.Who should bear the costs of the Application

Key legal issues

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Whether proceedings in the appeal should be stayed pending determination of the directorship of the 2nd Respondent in the pending Judicial Review case

Holding

The proceedings were stayed because the outcome of the Judicial Review case would determine who the 2nd Respondent's bona fide directors are, which directly affects its capacity to participate in and defend the suit

Reasoning

The court applied the principle in Githiga v Kiru Tea Factory that a genuine and serious dispute over directorship justifies a stay until the legitimate board is established. A company acts through its directors, and a dispute over their legitimacy raises a fundamental question of authority to instruct lawyers, file pleadings and defend the company's interests. The land proprietorship question was found to be intertwined with control of the company, and allowing the matter to proceed risked the rightful directors neither acting nor speaking for the company, fettering its right to fair hearing.

p. 6
02

The threshold for stay of proceedings

Holding

The threshold is high and stringent; the power is exercised sparingly and only in exceptional cases, where proceedings are frivolous, vexatious, harassing, manifestly groundless, or where the applicant could not possibly succeed

Reasoning

Relying on Halsbury's Laws of England and Kenya Wildlife Service v James Mutembei, the court restated that a stay is a serious, grave and fundamental interruption in a party's right to conduct litigation towards trial on the merits. The court nevertheless exercised its discretion on the interest-of-justice test in Global Tours & Travels, finding that justice required a stay because the company's proper representation was in doubt.

p. 5

Legal principles established

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  • Stay of proceedings is a grave judicial action which seriously interferes with a litigant's right to conduct litigation; the test for its grant is high and stringent
  • Where there is a genuine and serious dispute as to who constitutes the legitimate board of directors of a company, the court may stay proceedings until the issue of legitimate directorship is settled, to prevent injustice or futile litigation
  • Whether to grant a stay of proceedings is a matter of judicial discretion to be exercised in the interest of justice, weighing factors such as expeditious disposal, prima facie merits of the intended appeal, judicial time and expedition of the application

Court orders

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  1. 1.Stay of the proceedings in the instant suit pending determination of the 2nd Respondent's bona fide Directors in Nairobi High Court Judicial Review Case No. E267 of 2024: Republic v The Registrar of Companies, Exparte George Muiru Kagunya & others
  2. 2.The 2nd Respondent's Application dated 7th February 2025 is allowed with costs at lower scale since the same was undefended

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Article 159(2) of the Constitution; Sections 1A, 1B, 3, 3A & 6 of the Civil Procedure Act; Order 51 Rule 1 of the Civil Procedure Rules, 2010

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

I hold that the proceedings herein be stayed pending a determination of the 2nd Respondent’s bona fide Directors in the pending matter in Nairobi High Court Judicial Review Case No. E267 of 2024: Republic v The Registrar of Companies, Exparte George Muiru Kagunya & others.
p. 6Final orders - stay of proceedings granted
I find thus merit in the 2nd Respondent’s Application dated the 7th February, 2025 which is herein allowed with costs at lower scale since the same was undefended.
p. 6Final orders - application allowed with costs at lower scale
Stay of proceedings is a grave judicial action which seriously interferes with the right of a litigant to conduct his litigation. It impinges on right of access to justice, right to be heard without delay and overall, right to fair trial.
p. 5Threshold for stay of proceedings
A company is a legal entity, which acts through its Directors and therefore if there is a dispute on the legitimacy of its Directors, a fundamental question arises in respect of the authority to instruct lawyers, file pleadings, or even defend the company's interests.
p. 6Company acts through directors - effect of directorship dispute

Issues in the judgment

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minor

The judgment describes the pending matter as an appeal, yet refers to the 1st Respondent sometimes in the feminine and the record contains internal inconsistencies in the parties' descriptions; the case number of the main appeal is not stated on the record

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Mbaka (Suing as the Legal Administrator of the Estate of the Late Margaret Njoki Mbaka alias Njoki Mbaka) v Kiambu Nyakinyua Farmers Company Limited & another (Environment and Land Appeal E015 of 2024)  (Environment and Land) [2025] KEELC 4277 (KLR)", Case Analysis (2025). Miscellaneous Application (2nd Respondent/Applicant's Notice of Motion dated 7th February 2025) in the pending appeal from the judgment of Hon. Y.M. Barasa. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/4277/eng@2025-06-05

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.