Mobil Energy Limited v Greenspan Mall Limited [2022] KEBPRT 131 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. E367 OF 2021 (NAIROBI)

MOBIL ENERGY LIMITED..............................................TENANT/APPLICANT

VERSUS

GREENSPAN MALL LIMITED............................LANDLORD/ RESPONDENT

RULING

A. Parties and representatives

1. The Applicant Mobil Energy Limited is the tenant and rented space on LR No. 82/8759 situated within  Donholm Road, Eastlands Nairobi for the business (hereinafter known as the ‘tenant’)

2. The firm of Odera Were Advocates represent the Tenant/applicant in this matter.

3. The respondent is the Landlord and owner of the suit property LR No. 82/8759 situated within  Donholm Road, Eastlands Nairobi rented out to the tenants (hereinafter the landlord).

4. The firm of Mboya Wangong’u & Waiyaki Advocates represent the Landlord/Respondent in this matter.

B. The dispute background

5. On 16th July 2019, the Landlord and the Tenants entered into lease agreement in respect of the suit premises. The terms of the agreement were that the Tenant would occupy the suit premises for a period of 6 years, commencing on 1st July 2018 to 30th June 2024, at an agreed rent as provided in the lease.

6. On 30th July 2021 the Tenant moved this tribunal by way of reference and Notice of motion under certificate of urgency filed under section 12(4) of the Landlords and Tenants (Shops, Hotels and Catering) Establishments Act Cap 301. The Landlord was seeking amongst other orders that pending the hearing and determination of the reference that the Tribunal order the Respondents be restrained by themselves, their employees, and/or agents from attaching, auctioning, selling, alienating, transferring or interfering in any way with the applicant’s goods on the suit property. Further that the Tenant be allowed to continue settling their arrears by way of reasonable monthly installments.

7. On 3rd August 2021 the Tribunal ordered that the respondents be restrained by themselves, their employees, and/or agents from attaching, auctioning or selling the applicant’s properties and from interfering with their quiet possession as well as that in the interim the tenant should pay Kshs. 350,000 as rent.

C. Jurisdiction

8. The jurisdiction of this Tribunal is in dispute.

D. Claims

9. The Tenant filed a reference and a notice of motion application dated 30th July 2021

10. The Landlord filed a notice of preliminary objection dated 27th August 2021.

11. Parties have filed written submissions and the matter was fixed for ruling.

E. List of issues for determination

12. It is the contention of this Tribunal that the issues raised for determination are as follows;

a) Whether this Honourable Court has jurisdiction to hear and determine this matter?

F. Analysis and Findings

Whether this Honourable Court has jurisdiction to hear and determine this matter?

13. The jurisdiction of this Honorable Court is limited to controlled tenancies as provided for under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap 301 Laws of Kenya.

14. Section 2 of the Act defines a controlled tenancy asfollows:

“controlled tenancy” means a tenancy of a shop, hotel or catering establishment—

(a) which has not been reduced into writing; or

(b) which has been reduced into writing and which—

(i) is for a period not exceeding five years; or

(ii) contains provision for termination, otherwise than for breach of covenant, within five years from the commencement thereof; or

(iii) relates to premises of a class specified under subsection (2) of this section.”

15. The court in the case of Al-Riaz International Limited v Ganjoni Properties Limited [2015] eKLRin expounding on the requirements of Section 2 of the Act stated as follows:

“In my view, the provisions of section 2 of Cap. 301 are clear. Thus, if a tenancy satisfies any of the conditions provided at section 2, the tenancy automatically becomes a controlled one and subject to the provisions of Cap. 301 and it does not matter whether the parties had agreed that the provisions of Cap. 301 shall not apply to their relationship. Whether the tenancy relationship between the parties herein was a controlled one, which is subject to the provisions of Cap. 301, is a matter of law and cannot be ousted by agreement between parties because that would amount to contracting outside the law.

16. In the present case, the main issue is whether or not the tenancy relationship between the Landlord and the Tenant qualifies as a controlled tenancy and therefore subject to the jurisdiction of this honourable court.

17. From a clear reading of the lease agreement between the parties it provides that the lease was for a period of 6 years commencing 1st July 2018 to 30th June 2024. It is also the observation of this Tribunal that the lease agreement does not contain a termination clause prior to the intended date of expiry.

18. Based on the above, it is evident that the parties herein did not intend for their relationship to be deemed a controlled tenancy and hence does not fall within the ambit of the jurisdiction of this Tribunal. The lease agreement is duly executed by both parties which further proves its binding nature upon the parties.

19. Based on the foregoing, it is therefore my finding that this honourable Court is not clothed with jurisdiction to hear and determine the dispute between the parties herein and must down its tools.

G. Orders

a) The Landlord’s notice of preliminary objection dated 27th August 2021 is hereby upheld.

b) The Tenant’s reference and application dated 30th July 2021be and are hereby dismissed.

c) The Landlord shall have costs.

HON A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

RULING DATED, SIGNED AND DELIVERED VIRTUALLY BY HON A. MUMA THIS 15TH DAY OF DECEMBER, 2021

in the presence of Omondi forWerefor theTenantand in the absence of theLandlord.

HON A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL