Kwale Cement Factory Limited & Another v Kenya Deposit Insurance Corporation (KDIC) (As Receiver for Chase Bank (K) Limited)
The bottom line
#Kenya's Environment and Land Court struck out a bank-related land dispute, ruling that enforcing a mortgage belongs in the High Court, not the land court.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Notice of Preliminary Objection dated 24th April, 2026 by the Defendant meets the legal threshold of a preliminary objection based on Law and Precedents
- 2.Whether this Honourable Court is clothed with the requisite jurisdiction to hear and determine the suit herein
- 3.Depending on the outcome of Issue No. (b), whether the suit should be struck out or transferred to the High Court, and what is the fate of the Counterclaim
- 4.Who will bear the costs of the Preliminary Objection and of the suit
Key legal issues
#Whether the objection qualified as a proper preliminary objection
It did, as the question of jurisdiction is a pure point of law requiring no ascertainment of facts
The court reviewed the Mukisa Biscuit line of authorities and held that a jurisdictional challenge is a pure point of law argued on the assumption that all facts pleaded by the other side are correct, and may be raised at any stage.
Whether the ELC has jurisdiction over the suit
No - the substratum of the suit is a commercial banking dispute over enforcement of charges, reserved to the High Court under Article 165(3)(a)
Applying the dominant question/substratum test and the binding Co-operative Bank and Bank of Africa decisions, the court found the genesis of the dispute was a banker-customer relationship; the land was mere collateral; no environmental harm, boundary dispute or title controversy was pleaded; the gravamen was restraining the statutory power of sale.
Whether the suit should be struck out or transferred
Struck out; transfer was refused because a suit filed without jurisdiction is a nullity incapable of transfer
Relying on Kagenyi v Musiramo and Phoenix of E.A. Assurance, the court held that an order for transfer cannot be made unless the suit was first instituted in a court with jurisdiction; a nullity is nothing and cannot be transferred. Parties were granted liberty to file afresh before the High Court.
Fate of the Defendant's Counter-Claim
Equally struck out for want of jurisdiction, as a counter-claim is an independent suit founded on the same commercial substratum
The court reasoned that a counter-claim is a separate suit in which the defendant is claimant; since it sought recovery of monies under the same banker-customer relationship, the court could not approbate and reprobate by striking out the plaint but retaining the counter-claim.
Costs
Each party to bear its own costs despite the Defendant's success
Although costs follow the event under Section 27(1) of the Civil Procedure Act, the court noted the objection was taken some nine years after institution, long after the Defendant had itself filed a defence and counterclaim actively participating in the proceedings, and its own counterclaim was also struck out.
Legal principles established
#- Jurisdiction is conferred by the Constitution and statute and cannot be conferred by consent, waiver, acquiescence, conduct or estoppel of the parties
- The ELC's jurisdiction over contracts is confined to contracts incidental to the use of land and does not extend to mortgages and charges, which fall within the High Court's civil jurisdiction
- A suit filed in a court without jurisdiction is a nullity and cannot be transferred to a competent court
- Article 159(2)(d) cannot be used to manufacture or donate jurisdiction where the Constitution has withheld it
Court orders
#- 1.The Notice of Preliminary Objection dated 24th April, 2026 by the Defendant is upheld
- 2.The Plaint dated 3rd July, 2017 is struck out for want of jurisdiction
- 3.The Amended Counter-Claim dated 2nd October, 2017 by the Defendant is equally struck out for want of jurisdiction
- 4.Parties granted liberty to institute their respective claims afresh before the High Court of Kenya, subject to the applicable law and limitation of action
- 5.Any interim orders subsisting in the suit are discharged forthwith
- 6.Each party shall bear its own costs of the Preliminary Objection and of the suit
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Article 162(2)(b) of the Constitution of Kenya, 2010 read with Section 13 of the Environment and Land Court Act, No. 19 of 2011
Relief refused
#Plaintiffs' invitation to transfer the suit to the High Court instead of striking it out
A suit filed in a court without jurisdiction is a nullity and nothing capable of being transferred
Plaintiffs' estoppel argument based on the Defendant's Counter-Claim
Jurisdiction is conferred by Constitution and statute, not by consent, waiver or estoppel
Costs
Each party shall bear its own costs of the Preliminary Objection and of the suit.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
THAT this Honourable Court being bereft of the requisite jurisdiction, the Plaint dated 3rd July, 2017 by the Plaintiffs be and is hereby struck out for want of jurisdiction.
THAT for the same reasons, the Amended Counter - Claim dated 2nd October, 2017 by the Defendant be and is hereby equally struck out for want of jurisdiction.
THAT each party shall bear its own costs of the Preliminary Objection and of the suit.
The land offered as collateral is merely the mechanism by which the bank secured its commercial exposure, and its existence does not transform a banking dispute into a land dispute.
Proceedings conducted without jurisdiction are void ab initio and cannot be cured or validated by consent, acquiescence or the passage of time.
The provision of Article 159 (2) (d) of the Constitution is not a panacea for all manner of shortcomings, and it certainly cannot be deployed to manufacture or donate jurisdiction where the Constitution itself has withheld it.
Issues in the judgment
#Judge's surname spelled inconsistently within the judgment
Chronology anomaly: objection dated 2026 and ruling dated 2026 in a 2021 suit; plaint dated 2017
Framed issue (d) heading duplicated with issue (e) on costs
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kwale Cement Factory Limited & Another v Kenya Deposit Insurance Corporation (KDIC) (As Receiver for Chase Bank (K) Limited)", Case Analysis (2026). ELC Case No. 317A of 2021 (Formerly Mombasa ELC Case No. 248 of 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/6201/eng@2026-09-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.