Mweni v Kerubo [2025] KECPT 353 (KLR)

Mweni v Kerubo (Tribunal Case 183/ E283 of 2024) [2025] KECPT 353 (KLR) (Civ) (26 June 2025) (Ruling)

Neutral citation: [2025] KECPT 353 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil

Tribunal Case 183/ E283 of 2024

Janet Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members

June 26, 2025

Between

Stella Mweni

Claimant

and

Miriam Kerubo

Respondent

Ruling

1. The Matter for determination by the Tribunal is Preliminary Objection Application dated 4th June,2024 filed by the Respondent/ Defendant objecting to the filing of a Statement of Claim dated 15/4/2024 by the Claimants seeking for refund of their share deposits which was attached and eventually debited to satisfy a defaulted Loan of Kshs 2,130,000 which the Claimants had guaranteed the Respondent.

2. The Preliminary Objection is Anchored on the following groundsa.That the Tribunal lack jurisdiction under section 76 to hear and determine the Claim since it does not relate to Co-operative dispute envisioned under section 76 of the Co-operative Act.b.That the intended claim is a civil dispute that falls under the commercial courts and not Co-operative Tribunal.c.That the claim does not disclose any Co-operative dispute.

Facts 3. Earlier, the Claimants/ Plaintiffs had filed a Statement of Claim dated 15th April, 2024 in which they stated that they were members of Sheria Sacco Society by Virtue of being employees of the Judiciary.They further stated that in November 2017 the Respondent/ Defendant applied for a Development Loan of Kshs. 2,130,000/= from Sheria and approached them to act as guarantors for her. As Colleagues, the 1st,2nd,3rd, 4th and 5th Claimants signed the Loan Application form as Guarantors for the Respondents using their share deposits as follows;1st- Stellah Mweni Masavu- Ksh275,304/=2nd – Jackline Jepkosgei Kirui – Ksh15,300/=3rd - John Kambo- Ksh116,414/=4th – Paul Lobilara Ekitela- Ksh483,999/=5th- Linus Kabatha Irungu- Ksh203. 199/=

Total [Ksh. 1,094,216. 00] 4. In Support of their Claim, the Claimant filed a Verifying Affidavit dated 15/4/2024 sworn by Ms. Stella Mweni Masavu, a copy of the Loan Application form signed by the Respondent on 17/11/2017, Sacco’s demand letter dated 02/10/2023 addressed to the Respondent and Copied to the guarantor recovery notice by the Sacco dated 03/11/2023 and several copies of WhatsApp communication between the Claimants and Respondents.

5. On record the Respondent entered appearance vide a Memorandum of Appearance application dated 21/5/2024 but failed to file a Defence and instead filed the instant application for Preliminary Objection.

Issues For Determination 6. Having Considered the facts as outlined and the ground for Preliminary Objection, we have framed the following issues for determination:a.Whether the Co-operative Tribunal lacks the requisite Jurisdiction under section 76 of the Co-operative Society’s Act to hear and determine the matter.b.Whether the claim constitute a dispute within the context of section 76 of the Co-operative society’s act.c.Whether a dispute on the recovery of money deducted from guarantors by a Co-Operative Society or Sacco to Satisfy a defaulted Loan which won grantors to a member is a preserve of commercial courts or the Co-operative Tribunal.

Analysis And Determination Whether the Co-operative Tribunal lacks the requisite Jurisdiction under section 76 of the Co-operative Society’s Act to hear and determine the matter. 7. Without doubt the establishment of the Co-operative Tribunal as provided under Section 76 of the Co-operative Society’s Act No. 12 of 1997 is to hear and determine disputes that relate to the business of a Co-operative Society or Sacco.The Business of any Sacco like that of Sheria Sacco Limited is defined in the Sacco Societies Act No. 14 of 2018 as follows:“ it means financial intermediation and any other activity by a Sacco Society based on Co-operative Principles and in accordance with the Act or in Compliance with Islamic law, by way of :i.Receipt of withdrawable deposits, domestic Money Transfer services, Loans, Finance, Advances and credit facilitiesIn anticipation of disputes that would a rise while carrying out Sacco business, Parliament its wisdom provided under section 67[3] of the Sacco Society’s Act No.14 of 2008 that: “All Disputes arising out of Sacco business under the Act shall be referred to the Co-operative Tribunal”

8. We note that the Respondent in her application of Preliminary Objection narrowed her argument on the Tribunals Jurisdiction to Section 76 only and choose to overlook the provision of Section 79[5] of the Co-operative Societies Act 1997 which provide in Categorical terms that: “The Tribunal shall have unlimited geographical and pecuniary Jurisdiction in matters of Co-operative disputes”The term “Shall” means Mandatory and therefore Co-operative Societies and Saccos which are spread all over the Country, each with different financial performance are directed to file their disputes in the Co-operative Tribunal as the Court of for instance.

Instance 9. This Tribunal is fully seized of the fault that “Jurisdiction is everything and without it, it must down its tools” as eliminated in the favour famous case of Owners of the Motor Vessels “ Lillians’ v Caltex Oil [K] Ltd.As such, and as it stands now, this tribunal has been clothed with powers and authority to take cognizance, hear and determine all disputes which emanate from the Co-operative societies and Sacco’s in Kenya.

10. Because the Statement of Claim that the Respondent raise a Preliminary Objection against it emanate from Members of a Sacco whether present or current, the Co-operative Tribunal Confirm that it has Jurisdiction to hear and determine the matter on the basis of the analysis and the law, we find that the Respondents Preliminary Objection on the ground of lack of jurisdiction has no Merit and it must fail.

Whether the claim constitute a dispute within the context of section 76 of the Co-operative society’s Act. 11. Under Paragraph 5 of the Preliminary Objection,- the Respondent argue out that the claim raised by the Claimants does not disclose any Co-operative Dispute.We have analysed the Statement of Claim filed by the Claimants together with the evidence filled to establish whether it raises a dispute or note.First, we refer to definition of what constitutes a dispute in law.According to Black Law dictionary, a dispute is defined as a conflict or Controversy especially one that has given rise to a legal action. It involves disagreement over a point of Law or fact, a conflict of Legal views or interests or a conflict of Claims or rights.“Essentially a dispute arises when one party asserts a right, a claim or demand and another opposes it with contrary Claims or allegations [Emphasis ours]The above definition is similar to what constitutes a dispute in the context of Co-operative Society which refers to a dispute as a disagreement or conflict that arises among its member members on matters that are related to the Society’s business, operations or financial Matters.

12. Sections 76 1[a] of the Co-operative Society’s Act Provides that if any dispute Concerning the business of a Co-operative Society/ Arises.Among members, Past members and persons Claiming through members, past members and deceased members ora.Between members, past members or deceased members, and the society, its committee or any officer of the society; orb.Between the Society and any other Co-operative Society, it shall be referred to the Tribunal.2. a dispute for the purposes of this section shall include-a.a claim by a Co-operative Society for any debt or demand due to it from a member or past member, or from the nominee or personal representative of a deceased member, whether such debt or demand is admitted or not; orb.a claim by a member, past member or the nominee or personal representative of a deceased member for any debt or demand due from a Co-operative Society, whether such debt or demand is admitted or not;c.a claim by a Sacco Society against a refusal to grant or a revocation of licence or any other due, from the authority.”It shall be referred to Co-operative TribunalThe Claimants acted in which Sheria Sacco granted a Loan of Kshs. 2,130,000/= to the Respondent . The Respondent defaulted and after going through the process of recovery, the Sacco recovered the defaulted amount from the guarantors.When the guarantors wrote demand letters, approached the Respondent to pay them back the amounts deducted, the Respondent regenerated on all her promises which therefore created the instant dispute.

13. It is not in doubt, that the Claimants and the Respondent are members of Sheria Sacco Ltd.Therefore, the dispute falls squarely under the referred Section 76 [1][a] of the Co-operative Society’s ActA read through the Claimants’ Statement of Claim dated 15/4/2024 portray a lot of frustrations that the Claimants has gone through as a result of the Respondent’s inept attitude of remaining non-committal.

14. Although the Respondent has not filed a Defence on this claim discloses a Co-operative dispute. We therefore find that the Preliminary Objection on grounds No. 3,4 and 5 have no basis in law and must fail.

Whether a dispute on the recovery of money deducted from guarantors by a Co-Operative Society or Sacco to Satisfy a defaulted Loan which won grantors to a member is a preserve of commercial courts or the Co-operative Tribunal? 15. Noting that the Co-operative Tribunal is a specialized organ that has been established to handle only disputes within the Co-operative Sector, in the recent past, Court Hesitated to grant audience to Co-operative Members who opted to passby the Co-operative tribunal and file their cases in the Commercial Courts.To buttress this position, the High Court in the case of Universal Traders Sacco v Margret Mwikali Mbithi[2015] held that:“Courts as a general rule should follow the procedures laid down in a statute, unless there is a good reason not to do so”.

16. In the instant Claim, the statute is Co-operative Society’s Act and the Sacco societies, which provide that all Co-operative Disputes in Kenya involving its members and the society or the Society and members must be adjudicated by the Co-operative Tribunal.The test of this trite law was enunciated in the case of Gerald Wambua Makau v Lukenya Ranching & Farming Co-operative Society Ltd[2004]where the court held:“ That dispute involving members of Co-operative Societies must be addressed through the Co-operative Tribunal”

17. It is therefore not in order for the Respondent to propound that a recovery of sums guaranteed by members of Co-operative Society fall outside the ambit of the Co-operative Tribunal on the Contrary, the Tribunal in the right forum.It is therefore the finding of the Tribunal that ground 2 of the Respondents Preliminary Objection is unprocedural and cannot be entertained.

18. In the final analysis we find that the Respondents application is not merited and order as follows:i.Ground No. 1 – Must fallii.Ground 2 – Not merited and must falliii.Ground 3 – Failiv.Ground 4 & 5 – Not Meritedv.Ground 6 &8 – Fail

Upshot 19. Preliminary Objection dated 4th June, 2024 is found to be without merit and it fails.This Tribunal has jurisdiction to hear this Claim.Mention for Pre-Trial Direction 8/9/2025. Notice to Issue.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 26TH DAY OF JUNE, 2025. HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 26. 6.2025Hon. Beatrice Sawe Member Signed 26. 6.2025Hon. Fridah Lotuiya Member Signed 26. 6.2025Hon. Philip Gichuki Member Signed 26. 6.2025Hon. Michael Chesikaw Member Signed 26. 6.2025Hon. P. Aol Member Signed 26. 6.2025Tribunal Clerk GechikoMs. Mirian Kerubo – PresentMs. Stellah Mueni – No appearanceHon. J. Mwatsama Deputy Chairperson Signed 26. 6.2025