SOFTA BOTTLING COMPANY LIMITED & KUNGURU COMPLEX LIMITED V NAIROBI CITY COUNCIL [2005] KEHC 630 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL DIVISION, MILIMANI

Civil Case 263 of 2005 (1)

SOFTA BOTTLING COMPANY LIMITED…………………….….1ST PLAINTIFF

KUNGURU COMPLEX LIMITED…………………………..…...…2ND PLAINTIFF

VERSUS

NAIROBI CITY COUNCIL……………………………………………DEFENDANT

R U L I N G

Delay in the preparation and delivery of this ruling has been occasioned by the

last vacation of the court and my recent illness and hospitalization. The delay is

regretted.

The Plaintiffs’ herein filed this suit by plaint dated 6th May, 2005. They sought

the following main reliefs:-

(a) that the Defendant be ordered to renew all (trading) licenses issued to the

2nd Plaintiff; and

(b) that the Defendant be restrained from revoking any licenses issued to the 2nd

Plaintiff.

There are also claims for loss of earnings and general damages.

Together with the plaint the Plaintiffs’ filed chamber summons dated 10th May,

2005 in which they seek the following main orders;-

“(a) ……..;

(b) That an injunction do issue restraining the Defendant its servants,

agents and or employees from closing, arresting detaining revoking the

licenses or in any other manner whatsoever harassing and or interfering

with the operations of the Plaintiffs’ containers/depots and Softa Soda

vendors pending the hearing and determination of this suit.

(c) That a mandatory injunction do issue to the Defendant ordering it to

renew forthwith the 16 single business permits issued to the 2nd Plaintiff

to trade at Uhuru Park and Central Park Nairobi pending the hearing

and determination of this application.

(d) That a mandatory injunction do issue to the Defendant ordering it to

renew forthwith the 16 single business permits issued to the 2nd Plaintiff

to trade at Uhuru park and Central Park Nairobi pending the hearing

and final determination of this suit.

(e) ……..”

The application is expressed to be brought under Order 39, Rules 1 and 2 of the Civil

Procedure Rules. The grounds thereof as stated are;-

“(i) The Defendant has without notice or any justification whatsoever failed

to renew the 16 single business permits issued to the 2nd Plaintiff despite

repeated demands and tender of permits fees. This has led to grounding

of the only 16 selling points of the Plaintiff softa soda which have been

operating since 1998.

(ii) The Defendant has failed refused and or neglected to give any reasons

for the said refusal and has been systematically harassing and

interfering with the 2nd Plaintiff’s operations of its licenced

containers/depots and vendors of softa soda.

(iii) The permits are annual and the Plaintiff is bound to pay for the full

value irrespective of the date of issue and the Plaintiffs are suffering

serious financial loss each day the permits are withheld.

(iv) The Plaintiffs are willing and able to undertake as to damages or offer a

security for any injury the Defendant may suffer on account of issuance

of the orders sought.

(v) The Defendant’s actions are unlawful, discriminatory, without any

justification and solely aimed to frustrate the Plaintiffs’ operations as

the Defendant has been giving the vendors of Coca Cola products undue

preference with intent specifically targeting to eliminate 1st Plaintiffs’

product from the market. Further the Defendant’s acts and defaults

indicate a well co-coordinated effort to frustrate the sales of 1st

Plaintiff’s softa soda thereby subjecting the 1st Plaintiff’s sodas to

relegation from the market.”

There is a supporting affidavit sworn by one PETER KUGURU, the managing director

of both Plaintiffs. It elaborates those grounds.

In response to the application the Defendant filed a notice of preliminary

objection dated 30th May, 2005. That objection is that these proceedings, meaning the

Plaintiffs’ suit and application, are fundamentally misconceived and/or legally untenable

as the court lacks the primary jurisdiction over the subject matter by virtue of Section 165

of the Local Government Act, Cap 265, and should therefore be struck out. That

preliminary objection was argued before me on the 6th July, 2005. Mr. Njage, learned

counsel for the Defendant submitted that Section 165 aforesaid sets out the procedure to

be followed by an aggrieved party who wishes to challenge the refusal by a licensing

authority to grant or renew a trading license. He further submitted that sub-section 3

thereof provides for appeals to a subordinate court of the 1st class against such refusal,

and that therefore the Plaintiffs should have so appealed. He further pointed out that the

High Court is granted appellate jurisdiction under sub-section (5) of the said section

against the decision of the subordinate court. The primary jurisdiction therefore to

determine disputes as to licenses granted by local authorities is thus not conferred to the

High Court. The High Court cannot have both primary and appellate jurisdictions. He

cited one case,FOUR ACES LIMITED vs NAIROBI CITY COUNCIL &

ANOTHER, HCCC No. 337 of 2004 (unreported), a case of this division. That case is

similar to the present one except that it deals with the planning powers of local authorities

under the Physical Planning Act, Cap 286. Emukule J., held that the procedure laid down

in that Act regarding planning disputes must be exhausted first before an aggrieved party

can have recourse to court.

Mr. Njuguna, learned counsel for the Plaintiffs, responded that under sub-section

1 of Section 165 the Defendant may refuse to grant or renew a license for reasons given

in that sub-section. There must be a formal refusal by the Respondent to enable the

trader to appeal to the subordinate court, and the formal refusal must contain the grounds

of such refusal. Mr. Njuguna further contended that there was no such formal refusal by

the Defendant and that, therefore, the Plaintiffs could not appeal to the subordinate court

as provided under sub-section (3) of section 165. Mr. Njuguna further submitted that

there are other reliefs sought in the plaint which can only be canvassed in a suit

commenced by way of plaint. In his view, therefore, the present suit and application are

properly before the court.

I have carefully considered the submissions of the learned counsels. As already

noted the reliefs sought by the Plaintiffs in the plaint are essentially a complaint that the

Defendant has refused to renew their trading licenses or permits. Sub-section (3) of

section 165 of the Local Government Act provides as follows:-

“(3) Any applicant for the grant or renewal of a license or a business permit

whose application has been refused, and any person whose license or business

permit has been cancelled, by a local authority under this section may appeal

against such refusal or cancellation to a subordinate court of the 1st class

within whose jurisdiction the premises in or at which the applicant intended to

conduct or was conducting his trade, business, or occupation is situate, and in

the event of the appellant satisfying the court that the license or renewal thereof

was refused or, as the case may be, that the license was cancelled, on

insufficient grounds, the court may order such local authority to grant such

license or a renewal thereof, or as the case may be, the court may declare that

the cancellation was invalid.”

Subsection (5) of the same section provides:-

“(5) the appellant or the local authority concerned in any appeal under

subsection (3) may appeal to the High Court against any such order or

declaration of the subordinate court and the decision of the High Court therein

shall be final.”

Under sub-section (1) of section 165 a local authority may refuse to grant or renew any

license which it is empowered under the Act or any other written law to grant on any

such grounds as it may by by-law specify in addition to any of the grounds set out under

the sub-section.

It is pleaded in paragraph 4 of the plaint, inter alia, that the Defendant is the sole

licensing authority under the Local Government Act to issue and renew single business

permits within the City of Nairobi. It is further pleaded in paragraph 5 that since January

2005 the Defendant has“systematically and continuously breached” its aforesaid

obligation to grant or renew single business permits to the detriment of the Plaintiffs. It

is therefore clear that the Plaintiffs’ complaint in this suit is that the Defendant has

refused to grant or renew their trading permits. The proper course for the Plaintiffs to

follow in the face of such refusal is to appeal to a subordinate court as provided under

sub-section (3) of section 165. This court has only appellate jurisdiction under subwww.

section (5) against the decision of the subordinate court. The primary jurisdiction is

reposed in the subordinate court. The High Court cannot have both primary and appellate

jurisdictions in the same matter. If, as learned counsel for the Plaintiffs has stated, the

Plaintiffs are unable to so appeal because they have not been provided with a formal

written refusal with reasons for the refusal stated therein, then the Plaintiffs ought to seek

an appropriate order in judicial review proceedings.

For the above reasons I will uphold the preliminary objection. The Plaintiffs suit

is clearly misconceived and incompetent. It is hereby struck out with costs to the

Defendant. Order accordingly.

DATED AND SIGNED AT NAIROBI THIS 28TH DAY OF NOVEMBER, 2005.

H.P.G. WAWERU

JUDGE

DELIVERED THIS 2ND DAY OF DECEMBER, 2005.