Court of Appeal checks the ELC COURT 

Commentary on the decision of the Court in Bank of Africa Kenya Ltd & another v. TSS Investment Ltd & 2 others [2024] KECA 410 (KLR) 

INTRODUCTION 

The Court of Appeal has checked on the Environment and Land Court (ELC) for overstepping its jurisdiction. The bench argued that the ELC only has authority over disputes related to the “use” of land and contracts associated with that use and therefore cannot assume jurisdiction over commercial disputes particularly, disputes about mortgages, charges, or any contract that is not incidental to the “use” of land. 

FACTUAL BACKGROUND 

 TSS Investment Limited had offered two parcels of land as collateral to the Bank of Africa Kenya Limited for a loan, but failed to repay. The 1st and 2nd respondents, who operated a car bazaar on the land, filed a suit against the bank and TSS Investment in the ELC in an attempt to stop the bank from realizing its security. 
WHAT DID THE COURT SAY? 

The court ruled that the ELC lacked jurisdiction to handle the suit and cited a previous case, Co-operative Bank of Kenya Limited vs. Patrick Kangethe Njuguna & 5 others, which stated that the ELC only has authority over disputes related to the “use” of land and contracts incidentally connected to that use, excluding mortgages, charges, collection of dues, and rents. These matters fall under the jurisdiction of the High Court. The court emphasized that a charge is a disposition that does not have a direct contractual relation to the “use” of the land. 

WHAT ARE THE LEGAL IMPLICATIONS OF THIS DECISION? 

 This decision has significant legal implications for Kenyan land law. It clarifies that the ELC’s jurisdiction is primarily limited to matters directly associated with the use of land and contracts incidental to that use. This excludes mortgages, charges, collection of dues, and rents, which fall under the purview of the High Court. The decision also highlights the importance of understanding the jurisdiction of the ELC as outlined in Article 162 of the Constitution, Section 13 of the ELC Act, and Section 150 of the Land Act. 

CONCLUSION/ CALL TO ACTION 

The Lawmakers should review and amend Section 13 of the ELC Act to provide more specific guidelines on the jurisdiction of the ELC. Finally, landowners and lenders should be cautious of this ruling as it excludes charges and mortgages from the confines of “use of land” and “contracts incidental to the use of land.” They are classified as financial instruments hence the High court has jurisdiction on them as opposed to ELC.