Peter Mukuru Mukundi v Ruaraka Housing Estate Ltd [2021] KECPT 14 (KLR)

Peter Mukuru Mukundi v Ruaraka Housing Estate Ltd [2021] KECPT 14 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL

AT NAIROBI

TRIBUNAL CASE NO. 470 OF 2017

PETER MUKURU MUKUNDI....................CLAIMANT

-VERSUS-

RUARAKA HOUSING ESTATE LTD....RESPONDENT

RULING

1. The Respondent filed a Notice of Preliminary Objection dated 15th January 2019, essentially challenging the jurisdiction of this Tribunal over the subject matter, contending that the Defendant is a Limited Liability Company, and not contemplated as a party suitable for adjudication under the Co-operative Societies Act. The parties proceeded by way of written Submissions, which we have carefully considered, and on reliance thereupon we make this Ruling.

2. ISSUES FOR DETERMINATION

Having carefully considered the documents and arguments by both parties in their Written Submissions, we have framed the following issue for determination:

a. Whether Tribunal has jurisdiction to handle the present Claim; and

3. ANALYSIS OF ISSUES

We now proceed to dissect the issues as follows:

a. Whether Tribunal has jurisdiction to handle the present Claim

Section 76(1)(c) of the Co-operative Societies Act Cap 490 of the Laws of Kenya provides that if any dispute concerning the business of a co-operative society arises between the society and any other co-operative society, it shall be referred to the Co-operatives Tribunal. This is a wide jurisdiction, but it is not unlimited. This jurisdiction extends to subjects that affect the interests of the Society, including investments. This is what has been defined in law as “the business of the Society.”

4. The present Claim is between a member of a Co-operative Societies, and a party which from its outward appearance looks like a Limited Liability Company. From the facts, the Defendant was initially a co-operative society, but was later converted to a Limited Liability Company. Members of the erstwhile Society became members/shareholders of the new Limited Liability Company.

5. It is not in dispute that the Defendant was initially Ruaraka Housing Project, a child of Kenya Police SACCO Limited. The said Ruaraka Housing Project was later incorporated on 26th November 2001, as per its Certificate of Incorporation. This, again, is not in contention.

6. The business of the society is not just about the internal affairs, but includes protection of the economic interests of its members, including their investments, as was held in Gatanga Coffee Growers -vs- Gitau [1970] EA 361. On the premise of the foregoing, we are not persuaded that the Defendants should be permitted to escape from the proceedings hereof, just because they had a cosmetic facelift. As a matter of fact, the Defendants still form part of the business of the SACCO’s members, including the Claimant, who has an Ordinary Share Certificate No. 01307 dated 11th December 1991.

7. We thus hold that it is unsustainable for this Tribunal to renege its jurisdiction in a case where the economic interests and investments of members through their respective Co-operative Society is in contestation.

8. In the interest of justice, we find that the Orders sought should be denied and the Preliminary Objection dated 15th January 2019 be disallowed, and the matter to proceed to hearing.

ORDERS

We therefore Order as follows:

a. The Defendant’s Notice of Preliminary Objection dated 15th January 2019 be and is hereby dismissed with costs;

b. The matter to proceed to full trial: parties to file and exchange their witness statements and documents within 30 days hereof; and

c. Mention for Directions on  2.12.2021

RULING SIGNED, DATED AND DELIVERED VIRTUALLY  AT NAIROBI THIS 7TH DAY OF OCTOBER, 2021

Hon. B. Kimemia            Chairperson                   Signed        7.10.2021

Hon. J. Mwatsama         Deputy Chairperson     Signed        7.10.2021

Mr. P. Gichuki                Member                         Signed        7.10.2021

Mr. B. Akusala               Member                         Signed        7.10.2021

Tribunal Clerk               R. Leweri

Gatitu  for the Claimant

Odhiambo for the  Respondent

Hon. J. Mwatsama    Deputy Chairperson     Signed        7.10.21

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