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MagistrateDismissedNot stated in the judgment (Plaint dated 12th May, 2021)· [2025] KEMC 160 (KLR)

Leseketeti v Kirisia Engineering Co. Ltd & another (Civil Case E021 of 2021) [2025] KEMC 160 (KLR)

Chief Magistrate's Court (Magistrate's Court) at Maralal
17 July 2025
1,728 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~7 min to read original · ~4 min brief

The bottom line

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A Maralal court dismissed a Kshs 1.47 million partnership profits claim because partnerships with assets above Kshs 300,000 must be sued over in the High Court, not a Magistrate's Court.

What this practically means

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Executive summary

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The plaintiff sued by plaint dated 12th May 2021 seeking Kshs 1,477,018 with interest and costs, alleging that pursuant to a partnership agreement dated 2nd November 2017 with the 2nd defendant for the execution of a government water project tender, undertaken through the 1st defendant company, he raised the required capital and performance bid but the 2nd defendant withheld his rightful share of profits. The defendants filed a joint defence denying liability and fraud and sought dismissal with costs. The plaintiff testified through PW1 (himself) and PW2; the 2nd defendant testified as DW1 that he had already paid the plaintiff Kshs 2,500,000 as his share of profits under a 50:50 agreement. Before ruling on the merits, the court raised, on its own motion, the question of its jurisdiction. Citing Owners of Motor Vessel Lilian 'S' v Caltex Oil (K) Ltd, the court reiterated that jurisdiction is everything. Both parties admitted the suit was founded on the partnership agreement with a 50:50 profit ratio, and the evidence showed generated profits exceeding Kshs 5 million. Under section 2 of the Partnership Act 2012, a Magistrate's Court only has jurisdiction over partnership disputes where gross assets do not exceed Kshs 300,000; larger disputes lie in the High Court. The court accordingly dismissed the suit with costs for want of jurisdiction, without making findings on the merits, and indicated a right of appeal of 30 days.

Key legal issues

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01

Whether the Magistrate's Court had jurisdiction over the partnership dispute

Holding

The court lacked jurisdiction because the gross assets of the partnership, including current assets (generated profits) in excess of Kshs 5 million, exceeded the Kshs 300,000 threshold set by section 2 of the Partnership Act 2012, vesting jurisdiction in the High Court alone

Reasoning

Both parties admitted the suit was founded on a Partnership Agreement dated 2nd November 2017 with a 50:50 profit-sharing ratio. Relying on Hellen Wangari Wangechi v Carumera Muthoni Gathua, a partnership requires a business carried on in common with a view to profit. The pleadings and testimonies showed generated profits in excess of Kshs 5 million. Section 2 of the Partnership Act 2012 confines Magistrate's Court jurisdiction to partnerships with gross assets not exceeding Kshs 300,000; disputes exceeding that figure lie in the High Court. Applying Owners of Motor Vessel Lilian 'S', once the court formed the opinion it lacked jurisdiction it had to down its tools and dismiss the suit.

p. 4
02

Whether the question of jurisdiction could be raised by the court on its own motion

Holding

A question of jurisdiction, once raised by a party or by the court on its own motion, must be decided forthwith on the evidence before the court, whether or not raised as a formal preliminary objection

Reasoning

The court noted that ideally the point should have been raised by the parties as a preliminary objection, quoting Mukisa Biscuit Company Ltd v Westend Distributors on the nature of preliminary objections. However, following Owners of Motor Vessel Lilian 'S', the court held that a jurisdictional question raised by a party or by the court suo motu must be disposed of immediately on the material before it, and that a party who fails to question jurisdiction may not be heard to raise it after determination. The court therefore considered and decided the jurisdictional issue on its own initiative.

p. 3

Legal principles established

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  • Jurisdiction is everything and without it a court cannot make even one step; a court must down its tools once it holds the opinion that it lacks jurisdiction
  • Under section 2 of the Partnership Act 2012, the High Court (not a Magistrate's Court) has jurisdiction over partnership disputes where gross assets of the partnership exceed Kshs 300,000

Court orders

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  1. 1.The suit is dismissed for lack of jurisdiction
  2. 2.Costs of the suit to the defendants
  3. 3.Right of appeal is 30 days
Jurisdiction invoked
Partnership Act, 2012, section 2 (definition of 'court')

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, "Leseketeti v Kirisia Engineering Co. Ltd & another (Civil Case E021 of 2021) [2025] KEMC 160 (KLR)", Case Analysis (2025). Not stated in the judgment (Plaint dated 12th May, 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2025/160/eng@2025-07-17

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