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ELCAllowedELC Case of 2001 (Naivasha) - Notice of Motion dated 27th January 2025

Kisai & 2 others (Suing on their Behalf and on Behalf of 443 Members of the Olongonot Community) v Kiambu Nyakinyua Farmers Company Limited & 2 others; Kiwaka General Merchants Limited & 28 others (Interested Parties) (Environment & Land Case 11 of 2024) [2025] KEELC 4961 (KLR)

Environment and Land Court
3 July 2025
3,527 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

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A Kenyan court paused a 24-year land case because no one is sure who legally controls the company defending it.

What this practically means

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Executive summary

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The 1st Defendant, a limited liability company, moved the court by Notice of Motion dated 27th January 2025 seeking a stay of proceedings in this long-running land suit (filed in 2001) pending determination of Nairobi High Court Judicial Review Case No. E267 of 2024, which challenges an irregular change of the company's directors. It argued that the judicial review leave operated as a stay of the register changes, that a company must act through a natural-person director (citing Sections 128-130 of the Companies Act), and that continuing the suit without lawful directors would violate its right to a fair hearing. The Plaintiffs opposed, contending the judicial review concerned only internal leadership disputes distinct from the land ownership issues, that the suit had already been delayed for over two decades largely due to the Applicant's internal wrangles, and that a stay would gravely interfere with their right to expeditious litigation. The Interested Parties did not oppose; the 2nd and 3rd Defendants did not participate. Applying the stringent test for stay of proceedings from Global Tours & Travels, Halsbury's Laws, and the Supreme Court's Githiga v Kiru Tea Factory line of authority on directorship disputes, Oundo J held that a company acts only through its directors, that the directorship question was intertwined with control of the company and the land dispute, and that continuing would risk futile litigation and prejudice. The court stayed the proceedings pending determination of the 1st Defendant's bona fide directors in the judicial review and allowed the application with costs.

Questions the Court framed

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

  1. 1.Whether the court should stay the proceedings in the instant suit pending determination of Nairobi High Court Judicial Review Case No. E267 of 2024 on the Directorship of the 1st Defendant/Applicant
  2. 2.Whether the Applicant demonstrated a substantial legal question with reasonable prospects of success, irreparable harm, that the balance of convenience favoured a stay, and whether a stay was in the public interest

Key legal issues

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01

Whether a stay of proceedings should issue pending determination of a company's bona fide directors in a judicial review against the Registrar of Companies

Holding

Stay granted: the suit is stayed pending determination of the 1st Defendant's bona fide directors in the judicial review, since a company acts only through its directors and the directorship dispute affects its proper representation and the outcome of the land dispute.

Reasoning

A company acts through its directors; a dispute over the legitimacy of its directors raises a fundamental question about authority to instruct lawyers and defend the company's interests. The court drew on the Kiru Tea Factory line of Supreme Court decisions holding that where there is a genuine and serious dispute over the legitimate board, proceedings may be stayed to prevent injustice or futile litigation. The land proprietorship question was held to be intertwined with control of the company.

p. 8
02

The threshold for stay of proceedings

Holding

The test is high and stringent; the power is exercised sparingly and only in exceptional cases, weighing the interest of justice, expeditious disposal, arguability and expeditiousness of the application.

Reasoning

The court applied Ringera J's formulation in Global Tours & Travels and Halsbury's principles: a stay is a serious, grave and fundamental interruption of a litigant's right to conduct litigation, and should not be imposed unless it is clear the proceedings ought not continue. The applicant must satisfy the court that the stay is in the interest of justice after weighing the pros and cons.

p. 7

Legal principles established

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  • Stay of proceedings is a grave judicial action that interferes with the right of a litigant to conduct litigation; the threshold is high and stringent and the power must be exercised sparingly and only in exceptional cases.
  • Where there is a genuine and serious dispute over who constitutes the legitimate board of directors of a company party to litigation, the court may stay proceedings until the directorship question is settled to prevent injustice or futile litigation.

Court orders

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  1. 1.Stay of the proceedings in the instant suit pending determination of the 1st Defendant/Applicant'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 1st Defendant/Applicant's Notice of Motion dated 27th January 2025 is allowed with costs

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.

It must be remembered that 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. Therefore, the test for stay of proceeding is high and stringent.
p. 6threshold for stay of proceedings
the sole question is whether it is in the interest of justice to order a stay of proceedings and if it is, on what terms it should be granted
p. 7judicial discretion to stay proceedings (Global Tours & Travels)
The remit of the Registrar of Companies to ascertain the bona fide directors of the respondent is a lawful and legitimate one, bearing validity under the commercial laws at play
p. 8Registrar of Companies' role in directorship disputes (Githiga v Kiru Tea Factory, as quoted)
I hold that the proceedings in the instant suit be stayed pending a determination of the 1st Defendant/Applicant’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. I find thus merit in the 1st Defendant/Applicant’s Application dated the 27th January 2025 which is herein allowed with costs.
p. 8disposition - stay granted with costs

Issues in the judgment

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minor

The judgment refers to the movant variously as '1st Defendant/Applicant' and once as '1st Defendant/Respondent' in the submissions section

minor

Applicant's submissions frame issues referring to 'the Appellant' although this is a first-instance suit, not an appeal

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, "Kisai & 2 others (Suing on their Behalf and on Behalf of 443 Members of the Olongonot Community) v Kiambu Nyakinyua Farmers Company Limited & 2 others; Kiwaka General Merchants Limited & 28 others (Interested Parties) (Environment & Land Case 11 of 2024) [2025] KEELC 4961 (KLR)", Case Analysis (2025). ELC Case of 2001 (Naivasha) - Notice of Motion dated 27th January 2025. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/4961/eng@2025-07-03

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