Mugo v Bingwa Sacco Society Ltd [2025] KECPT 224 (KLR)

Mugo v Bingwa Sacco Society Ltd (Tribunal Case E001 of 2025) [2025] KECPT 224 (KLR) (12 March 2025) (Ruling)

Neutral citation: [2025] KECPT 224 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case E001 of 2025

BM Kimemia, Janet Mwatsama, P. Gichuki, B Sawe, F Lotuiya & PO Aol, Members

March 12, 2025

Between

Jane Wanjiru Mugo

Claimant

and

Bingwa Sacco Society Ltd

Respondent

Ruling

1. The Application for determination is dated 10th January 2025 filed on 13th January,2025. The Application seeks for:i.Spentii.Spentiii.That pending the determination of Application, an order of temporary injunction be and is hereby issued against the Respondent, its agents, servants, assigns, proxies or employees barring it from conducting the director’s elections in Mutira Electoral Zone on 14th January 2025iv.That pending the hearing and determination of the entire claim, an order of temporary injunction be and is hereby issued against the Respondent, its agents, servants, assigns, proxies or employees barring it from conducting the director’s elections in Mutira Electoral Zone.v.That in the alternative and without prejudice to prayers (ii-iv) above this Honourable tribunal be pleased to suspend the director’s elections scheduled for 14th January 2025 in Mutira Electoral Zone until the question of the claimant/ Applicant’s eligibility is settled.vi.That the costs of this Application be awarded to the Claimant/ Applicant.

2. The Application is supported by the Supporting Affidavit of Jane Wanjiru Mugo sworn on 10/1/2025. The Applicant avers on 30/12/2024, the Respondent (Bingwa Sacco Society) issued an Election Notice notifying its members of election of directors for 14th January 2025 and this included Mutira Electoral zone. The Applicant applied for the position on 8/1/2025 and presented all requisite documents. The chairman of the Respondent’s nomination committee however notified the Claimant Applicant that she was not eligible to vie for the position because she was an employee of the society within the last 10 years at the time of its election.In the notification, the Respondent’s Chairman of Nomination Committee cited clause 9. 1 (f) (xx) of a document called the Electoral policy. The Applicant avers the decision by the Respondent to bar her from vying is illogical and contrary to the eligibility criteria as outlined in the election notice & clause 50, 51 and 54 of the Respondent’s by- laws.The said Electoral Policy document did not have any legal effect as it is in conflict with Section 8 Co-operatives Society Act, Rule 8 of Co-operative societies Rules as read together with clause 91 of the Respondent’s By- laws which provides for the procedural prerequisites of Amendment of By- laws. The Applicant avers the infringement of her rights continue to occur prejudicing her and preventing her from representing her electoral zone of the Respondent’s board and requests for the Application to be allowed as prayed.

3. The Applicant relied on the following documents in support of her application:a.Election notice dated 30/12/2024b.The Applicant’s Application & attached documentsc.Letter from nominating committee dated 8/1/2025d.Electoral policy documentse.Respondent’s by- lawsThe Applicant further relied on her Supplementary Affidavit sworn on 21st February 2025 in response to the Replying Affidavit sworn by the Respondent and attached other documents including:f.Minutes of SGM dated 29/9/2022g.Notice of meeting & agenda of SGM held on 19/9/2023h.Memorandum signed by members of Respondenti.Nomination form

4. The Respondent filed a Replying Affidavit sworn by Elizabeth Warui on 13th January 2025 in response to the Application. She stated she is the CEO of Respondent and states that the Electoral Notice dated 30/12/2024 was clear that the Applicants were to fulfil the requirements of By-law 54 and the Electoral Policy. She avers that the Electoral Policy was approved and resolved upon by the society’s General Meeting held on 19th September 2023. Further the Respondent states that the Electoral policy was approved and resolved upon by the society’s Board of Directors in a meeting held on 24/10/2023. As such the Electoral policy is provided for under By law 50(C) which provides for Election’s Nominations Committee.Under By-Law 54(b) (xxi) a member is eligible for election when they conform to the standards established by the board of directors. As such a member who has been an employee of the society in the preceding 10 years is not eligible for elections as per clause 9(1) (f) (xx) of the Electoral Policy.The Respondent avers the Applicant retired from the society on 23rd May 2024 and was paid her dues. She therefore is not eligible for election to the board of directors of Respondent.To that end the Claimant’s Application should not be dismissed with costs.The Respondent relied on the following documents in opposition of the case:a.Notice of election dated 30/12/2024b.Electoral policy dated September 2023c.Minutes of SGM held on 19/9/2023d.Minutes of board of directors held on 24/10/2023e.Copy of Judgement ELRC 001 OF 2024 Nyeri.f.Termination benefits form.

5. Having read the pleadings both for Claimant/Applicant and the Respondent’s and having heard the oral submission by counsel for both sides the issue for determination is only one which is on the Electoral Policy document.Issue for determinationWhether the Electoral Policy document of Respondent is valid and/or binding on its members?The genesis of the Application and case as it were is the Electoral Policy document.While submitting the Applicant made reference to Respondent’s Replying Affidavit document marked EW3. Minutes of 19th September 2023 the Applicant stated amendment to By-Laws are valid upon registration. The Applicant avers the alleged meeting had no notice of the Electoral policy documents being an agenda and as such the same not properly enshrined or form part of the Amended By- Laws. The By- laws were amended in February 2023 and the Electoral Policy document is for June 2023. The Applicant’s contention is that the Electoral Policy Document did not form part of the Amended By- Laws. According to the Applicant the Election Policy offends and contradicts the Respondent’s By-Laws. The Electoral Policy document provides for laws/regulations that are not in the By- laws while the By- Laws are supreme and its members are to be elected using it.

6. From the submissions by the parties we look into the meeting held on 19th September 2023 where the Electoral Policy document features. From our understanding after submissions by counsels the Electoral Policy document was discussed in a meeting prior to 19/9/2023 which takes us to minutes of the meeting held on 29/9/2022 attached as the Electoral Policy document ought to have been emanated from document annexed as JWM1 g in the Applicant’s Supplementary Affidavit. Therein we are drawn to Minute 4/29/9/2022iv.New system where the meeting was informed of a new system by name of orbit -Respondentv.Kutus buildingvi.loans recoveryWe have perused through the minutes, which have not been controverted by Respondent as to the veracity of its contents and have not seen anywhere where it was minuted about the Electoral Policy document. There was no discussion of the Electoral Policy document.We are thus taken to minutes of the meeting held on 19th September 2023 and the Min No. 3/19/09/2023 matters arising as annexed in Respondent’s Replying Affidavit marked EW3 where the same discusses:i.New systemii.Electoral policy amendmentiii.Loans recoveryWe note of all the discussions there is an introduction of a new ‘agenda’ as it were in the latter minutes that is of the Electoral Policy Amendment. The said Electoral Policy document is discussed under matters arising and yet the same had not been discussed earlier.The Respondent’s while submitting stated the Respondent’s board had mandate to align the Electoral Policy document with the Respondent’s by- laws hence reasons why they changed the Electoral Policy document by adding other more clauses.Respondent avers all they had to do was introduce the members to the policy. We look into Article 55 of Respondent’s By- laws, which provides for the functions and responsibilities of the board of directors.Indeed Article 55 (d) Bingwa Sacco amended by- laws provide for “……Establish appropriate policies including but not limited to human resource policy, credit policy, investment policy, savings policy, liquidity policy, pricing policy, information preservation policy, dividend policy and risk management policy.”The question to be answered is why then does the Applicant object to the Electoral policy document?Our interpretation of Article 55 above is that the board has responsibility and mandate to come up with various policy documents to enable this society to run. These policies are to be read and to be looked into and be in tandem with the By- Laws of a society and the Cooperative Societies Act.The policies in place which Respondent’s By- Laws were being amended were those in place before 6/6/2023 when the same were registered with the Commission for Co- operatives. The Electoral Policy was indeed introduced much later after the Amended By- Laws of Bingwa Sacco Society ltd.

7. What then is the effect of the above?We are convinced the Electoral Policy document are thus not aligned to the Respondent’s Amended By- Laws as the Respondent would like us to believe. The Board can not come up with a policy document that is only known to them and not the members of the society to whom it ought to apply. It can not be used as an arrow when needed instead of being both an arrow and shield for all intent and purposes.We are not convinced the Electoral Policy Document was discussed and brought to the attention of the members of Bingwa Sacco Society and is an unknown novel document even to the Respondent itself.The Electoral Policy Document is being introduced to its members at the time of its “use” instead of prior for the membership of the society to appreciate its content. We are inclined to agree / believe the Applicant the Electoral Policy Document is an alien document introduced by the board of Respondents.Whether or not it was intentional or aimed at Applicant that is not the issue at hand. The issue is the document not being familiar to its members and it not having been debated / member education done on it.The other question as to why the same appears in the minutes of 19/9/2023 is also neither here nor there, as we have confirmed the same was not discussed in the meeting of 2022, which led to Amendment of By- Laws which was to introduce the Electoral Policy Document. The Respondent would like the Tribunal to believe the Electoral Policy Document was used previously which is not the position from their own other evidence the Electoral Policy Document was discussed in September 2023 meeting and could not have been used earlier.The how and when the Electoral Policy Document was introduced is another question that needs to be responded.We appreciate the board has a mandate to come up with appropriate policies to guide the societies activities. Even with the introduction of the said policies the same ought to be shared to the members in this instance it was not done.Member public participation is key to enable every member be on board on the issues affecting the society.To this end we find:a.The Electoral Policy Document is an unknown or alien document to the Respondent’s society. Respondent have not informed the Tribunal when and where they undertook member education or deliberated on the same. As much as the Electoral Policy Document is said to have been used earlier to other candidates it does not mean the same cannot be challenged at this stage as it is being challenged by the Applicant. The document from our assessment and understanding does not have the understanding of the Respondent’s membership.b.In their final submissions the Respondent stated the Applicant would not be a good fit if allowed to vie for elections as she cannot work well with the Directors of Respondent. We are not persuaded by that line of thought as well. The position being sought is an elective position. Any elected leader would have mandate from the electorate irrespective of whether the management would like the elected leader or not.c.The Applicants in a rejoinder of their final submissions stated the Respondent in a bid to further frustrate the Applicants have already planned for the AGM to be held on 13/3/2025 a day after the ruling of this Application. This was neither confirmed or denied by Respondent. The Applicant averred looking into the conduct of Respondent the case was given priority to enable the Respondent society pave way for elections.With all the above we are convinced the Electoral Policy Document should not be used to vet the candidates vying for elections because there are too many inconsistencies of how it came to be and that it has not been fully appreciated by the members. We thus find merit in the Application dated 10/01/2025.

We Order As Follows:1. That: The Applicant be allowed to vie for the Mutira Electoral Zone elections at a date that shall be set by the Respondent Society.2. That: The Respondent Society is to have their AGM after the Mutira election zone elections have been held.3. That: Each party to bear their own costs.4. That: The prayers in the Application and Statement of Claim being similar this matter is marked as closed.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 12TH DAY OF MARCH, 2025 IN THE PRESENCE OF:Hon B. Kimemia Chairperson Signed 12. 03. 2025Hon J. Mwatsama Deputy chair Signed 12. 03. 2025Philip Gichuki Member Signed 12. 03. 2025Beatrice Sawe Member Signed 12. 03. 2025Fridah Lotuiya Member Signed 12. 03. 2025P. Aol Member Signed 12. 03. 2025Tribunal Clerk Jonah MutaiOnsando advocate for the Respondent.Anyona advocate holding brief for Manwa Advocate the Claimant.Hon J. Mwatsama Deputy chairperson Signed 12. 03. 2025