Need Gelato Limited v Cap Holdings Limited & another [2025] KEBPRT 243 (KLR)

Need Gelato Limited v Cap Holdings Limited & another (Tribunal Case E086 of 2025) [2025] KEBPRT 243 (KLR) (17 April 2025) (Ruling)

Neutral citation: [2025] KEBPRT 243 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E086 of 2025

A Muma, Member

April 17, 2025

Between

Need Gelato Limited

Tenant

and

Cap Holdings Limited

1st Landlord

Mohammed T Bhaiji

2nd Landlord

Ruling

A. Parties And Their Representatives. 1. The Applicant, Need Gelato Limited (the “tenant”), is the tenant and rented two and a half containers space within Block 91/263 located in Gigiri Lane, Nairobi (“the suit premises”).

2. The firm of Madhani Advocate LLP represent the tenant in this matter.

3. The 1st Respondent, is a private limited company registered under the Company Act cap 486 Laws of Kenya.

4. The 2nd respondent is the registered proprietor of the suit premises (the “Landlord”).

5. The firm of Kamau Muthoni Advocates represents the respondents.

B. Background Of The Dispute. 6. Through a Reference dated 21st January, 2025 and an Application dated 23rd January 2025 canvassed through Certificate of Urgency of even date, the tenant moved this Honorable Tribunal seeking the following orders inter-alia: temporary injunctions restraining the Landlord by themselves, their officers, servants, agents or otherwise howsoever be restrained from harassing, evicting, intimidating, closing the suit premises or threatening to evict the Tenant or interfering with the tenant’s quite possession of and enjoyment of the suit premises.

7. Upon perusal of the Tenant’s Application, this Honourable Tribunal, on 27th January, 2025, issued the following orders ex-parte: temporary injunctions restraining the Landlord by themselves, their officers, servants, agents or otherwise howsoever be restrained from harassing, evicting, intimidating, closing the suit premises or threatening to evict the Tenant or interfering with the tenant’s quite possession of and enjoyment of the suit premises.

8. The court directed that the applicant to serve and file an affidavit of service.

9. In response to the tenant’s application, the landlord filed a Preliminary Objection (P.O) dated 10th February 2025, challenging the jurisdiction of the Tribunal on grounds that there was no existing tenancy relationship between the parties as the Tenancy Agreement had ended lapsed time.

10. On 11th February 2025, the tribunal directed the landlord to file submission in 7 days and the tenant to respond to the same in 14 days.

C. Tenant’s Case. 11. The tenant avers that he is a controlled tenant of suit premises in which they operate as Gelatare business.

12. Via his affidavit sworn on 23rd January 2025, through Kunaal Saha, director of the Need Gelato Limited, the tenant asserts that they entered into a Tenancy Agreement dated 28th January 2021, with the Landlord, hiring a two and half container space within Block 91/XX3 located in Gigiri Lane within Nairobi.

13. According to the Agreement, the Tenancy was to run for a period of two- years commencing on 1st February 2021. He further avers that it was agreed to that if the Agreement is not terminated be either party by end of the Tenancy Relationship, the Agreement would be deemed to have rolled over for another period of 2 years.

14. That on 9th December 2024, the Landlord, through Site Acquisition Specialists (SAS) issued the tenant with a Notice of Termination of even date, requiring the tenant to vacate the suit premises by 31st January 2025. The Notice followed letter correspondences between the parties which sought to renew the tenancy Agreement and increase rent payment which the tenant terms; unilateral and exorbitant increment to the rent and service charged.

15. The tenant avers that the impugned Termination Notice is improper, irregular and falling short of the requirements under Section 4 of the Landlord and Tenants (Shops, Hotels and Catering Establishments) Act CAP 305 Laws of Kenya (hereinafter, “the Act”) and prayed that this Tribunal grant an order to quash the said Notice.

D. Landlords’ Case. 16. The landlord has objected the tenant’s Reference and Application dated 21st and 23rd January 2o25 respectively, citing that this Tribunal lacks jurisdiction to hear and determine this matter on grounds that the Tenancy Agreement between parties had already ended by effluxion of time.

17. The landlord relying on the case of Pritam vs Ratilal & Another, Nairobi HCCC 1490 OF 1970 (1972) EA 560, averred that existence of a relationship between a tenant and landlord is a prerequisite to the application of the Act and where such relationship does not exist or it has come to or been brought to an end, the provision of the Act will not apply.

E. Jurisdiction. 18. The jurisdiction of this Honourable Tribunal has been contested.

F. Issues For Determination. 19. Having carefully perused the Pleadings presented before this Honourable Tribunal by the parties, it is therefore my respectful finding that the issues for determination before this Honourable Tribunal are:i.Whether this honourable tribunal has jurisdiction to listen and determine this matter?ii.Whether the impugned Termination Notice dated 9th December 2024 was properly issued?iii.Whether the tenant is entitled to the relief sought?

G. Analysis And Determination 20. It is key to note that a Tribunal cannot arrogate jurisdiction to itself as it can only exercise jurisdiction conferred to it by the law. As such, this Tribunal has the duty to interrogate the question of jurisdiction and satisfy itself before making any further step in line with the celebrated case of Owners of the Motor Vessel ‘Lillian S’ Vs Caltex Oil (Kenya) Limited [1989] eKLR.

21. The Landlord’s objection is hinged on the averments that there is no tenancy relationship between the parties as the Agreement had ended by effluxion of time.

22. The Tenant on the other hand opposed the P.O on the basis that there is a tenancy relationship and that the P.O does not raise pure point of law as it invites the court to arrogate facts.

23. It is not in contention that the parties had a Tenancy Agreement that lasted for two years and rolled over for another two years as per their License Agreement dated 28th January 2021. The big concern here is whether the existing relationship amounts to a control tenancy after the first tenancy had ended to warrant jurisdiction of this Tribunal.

24. To answer the question, I will direct myself to the Act under section 2 which provides for Control Tenancy as a tenancy of a shop, hotel or catering establishment:a.which has not been reduced into writing; orb.which has been reduced into writing and which:i.is for a period not exceeding five years; orii.contains provision for termination, otherwise than for breach of covenant, within five years from the commencement thereof

25. An examination of Section 2(a) of Cap 301 denotes that a controlled tenancy could include a tenancy of a shop, hotel or catering establishment which has not been reduced into writing.

26. Being that the Tenant has continued to occupy the premises even after the expiry of the tenancy agreement, and that the tenancy had rolled over as per the License Agreement and the Landlord continued to accept rent from the tenants, there is a presumption that the nature of tenancy between the parties herein is unwritten. Consequently, the relationship between the parties herein is controlled tenancy which confers jurisdiction to this Honourable Tribunal.

iii. Whether the impugned Termination Notice dated 9th December 2024 was properly issued? 27. Having established that this Tribunal has jurisdiction, I will then proceed and address whether the Termination Notice dated 9th December 2024 was properly issued.

28. It is important to note the landlord has not opposed the tenant’s application inviting the Tribunal to quash the landlord’s notice demanding that the tenant vacate the demise premises by 31st January 2025. The Tribunal will nonetheless proceed and address the issue having been raised by a party.

29. The position of the law on the issue of termination notice is now settled. The court in Manaver N. Alibahai T/A Diani Boutique vs South Coast Fitness 7 & Sports Centre Ltd, Civil Appeal No. 203n of 1994, stated that:“The Act lays down clearly and in detail, the procedure for the termination of a controlled tenancy. Section 4(1) of the Act states in very clear language that a controlled tenancy shall not terminate or be terminated, and no term or condition in, or right or service enjoyed by the tenant of, any such tenancy shall be altered, otherwise than in accordance with specified provisions of the Act. These provisions include the giving of a notice in the prescribed form. The notice shall not take effect earlier than 2 months from the date of receipt thereof by the tenant. The notice must also specify the ground upon which termination is sought. The prescribed notice in Form A also requires the landlord to ask the tenant to notify him in writing whether or not the tenant agrees to comply with the notice.”

30. Upon careful review of the notice titled "Notice Of Non-renewal Of License At The Gigiri Courtyard, L.R. Number 91/2XX/Gigiri Lane, Nairobi," dated 9th December 2024, it is evident that the notice did not comply with the statutory timeline of two months. The notice, issued on 9th December 2024, sought to terminate the tenancy by 31st January 2025, a date which has since elapsed. But slightly under 2 months.

31. The notice also clearly sets out the reason for non-renewal, namely the tenant’s failure to respond to previous notices issued by the landlord regarding renewal of the agreement.

32. In view of the foregoing, I find that the termination notice dated 9th December 2024 is also not in the prescribed form and was not therefore issued in accordance with Section 4(1) of the Act.

33. It is with this that I find that the 3rd issue framed of determination as whether the tenant is entitled to the relief sought, must succeed the main issue proceeding to hearing is there fore the increament of rent by 61% and signing of a new lease which shall be addressed at the full hearing.

H. Orders. 34. In the upshot, the Tenant’s Reference dated January 21, 2025 and Application dated January 23, 2025 is hereby allowed and the reference is fixed for hearing and directions on 3/6/2025. Hearing Notice do issue to the Landlord.

RULING DATED, DELIVERED AND SIGNED AT NAIROBI ON THIS 17TH DAY OF APRIL 2025 IN THE PRESENCE OF MURIUNGI FOR THE TENANT AND NA FOR THE LANDLORD.HON A. MUMAMEMBERBUSINESS PREMISES RENT TRIBUNAL