New Titanic Jacaranda General Spares v Omil & another (Commercial Case E095 of 2026) [2026] SCC 235 (KLR) (31 August 2026) (Ruling)

**REPUBLIC OF KENYA** **IN THE SMALL CLAIMS COURT AT MALABA** **SCCOMM CASE NO. E095 OF 2026** **NEW TITANIC JACARANDA** **GENERAL SPARES......................................................................CLAIMANT** **-VERSUS-** **FRANCILE OPONDO OMIL………………………….………..…...1ST RESPONDENT** **HELLEN ATIENO MIRIMO………………………………….…….2ND RESPONDENT** **RULING.** 1. What is before me for determination is the respondents’ preliminary objection dated 18th August 2026 challenging the ***jurisdiction*** of this court to hear and determine this matter on the following grounds: - 2. ***That the current proceedings have been improperly commenced.*** 3. ***That the Court herein is found to lack jurisdiction in accordance with Section 13(5) of the Small Claims Court Act.*** 4. ***That the 1st and 2nd Respondents shall seek that the suit be dismissed with costs.*** 5. This matter came up for first mention 20th August 2026 when parties agreed to have the Preliminary Objection canvassed first and by way of written submissions. 6. The Respondents submit that the Preliminary Objection raises a pure point of law because section 13(5) of the Small Claims Court Act expressly excludes claims founded on employment and labor relations from the jurisdiction of the Small Claims Court. They contend that the Claimant’s own pleadings establish that dispute arose from an employer employee relationship, with the 1st Respondent allegedly receiving Kshs. 232,295.45/= in cash proceeds while working for the Claimant. Relying on Mukisa Biscuit Manufacturing Co. Ltd vs Westend Distributors Ltd (1969) EA 696 and Owners of Motor Vehicle Lillian S vs Caltex Oil (Kenya) Ltd (1989) KLR 1, the Respondents submit that jurisdiction is fundamental and once absent, the court must down its tools; they consequently pray that the Preliminary Objection be upheld and the claim be dismissed with costs. 7. The Claimant submits that the Preliminary Objection lacks merit and that this court has jurisdiction because the claim arises from employer-employee relationship between the Claimant and the 1st Respondent. It argues that although the 1st Respondent ceased employment on 6th June 2026, the claim concerns monies allegedly concealed or stolen during his employment, and the Claimant’s documents permit recovery of stolen cash, goods and costs through civil proceedings. The Claimant relies on Maisha Mapya Kenya Foundation Ltd vs Shikuku & Another (2025) KEELRC 761 (KLR) and urges the court to find that the objection lacks merit and dismiss it with costs. 8. I have considered the Notice of Preliminary Objection, the pleadings and the rival written submissions. In **Flodida Construction Machinery Limited v Peter Wepukhulu Wanyonyi** [**[2026] KEELRC 992 (KLR)**](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/992/eng%402026-04-22)**,** the court in considering substantially similar arguments, acknowledged the existence of divergent decisions of courts of concurrent jurisdiction and ultimately held that a claim for recovery of money allegedly diverted or misappropriated by an employee in the course of employment arose from the employment relationship and fell within the jurisdiction of the ELRC. 9. This Court is not unaware that it has previously relied upon the reasoning in Maisha Mapya Kenya Foundation Limited v Shikuku & another which has been cited by the Claimant. However, having had the benefit of considering the subsequent and binding jurisprudence of the Court of Appeal on the constitutional demarcation of jurisdiction between courts, this Court is persuaded that its earlier approach requires reconsideration. 10. The Court of Appeal has settled the principle that disputes which relate to or arise from an employment relationship fall within the exclusive jurisdiction of the Employment and Labour Relations Court. In **Kenya Medical Research Institute v Davy Kiprotich Koech [2018] KECA 128 (KLR)**, the Court of Appeal, in considering a dispute arising substantially from an employment relationship, held that the appropriate forum was the Employment and Labour Relations Court and directed transfer of the matter thereto. The position was subsequently reaffirmed **in Hantex Garments EPZ Limited v Kazungu & another [2023] KECA 1287 (KLR)**, where the Court of Appeal reiterated the constitutional distinction between the High Court and the specialised court established under Article 162(2), holding that employment-related disputes fall within the jurisdiction of the ELRC. 11. The significance of these authorities is not merely that the claims therein arose in an employment setting, but that the jurisdiction of the specialised court flows from the Constitution and legislation and cannot be assumed or enlarged by the nature of the relief sought. The Court of Appeal's pronouncements are binding upon this Court and must prevail over contrary decisions of courts of concurrent jurisdiction. I have also considered the decision **in Flodida Construction Machinery Limited v Peter Wepukhulu Wanyonyi**, which is particularly instructive as it concerned allegations of diversion and misappropriation of an employer's money by an employee. The Court held that where the alleged acts occurred while the respondent was acting in his capacity as an employee and in the course of his employment, the claim arose out of the employment relationship and was therefore properly within the jurisdiction of the ELRC. 1. In the present matter, the Claimant's own pleadings disclose that the 1st Respondent was working for the Claimant when, on 21st March 2026, he allegedly received and concealed cash proceeds amounting to Kshs.232,295.45. The claim is therefore not founded upon an independent transaction between strangers but upon acts allegedly committed by the 1st Respondent in the course of his employment. The fact that the employment relationship subsequently ceased does not, in my view, alter the character of the cause of action. 2. More importantly, section 13(5) of the Small Claims Court Act expressly provides that a claim shall not be brought before the Small Claims Court where the cause of action is founded upon employment and labour relations. The statutory exclusion is categorical. It is therefore immaterial that the relief sought is framed as recovery of money or special damages if, upon examination of the pleaded cause of action, the claim is founded upon the employment relationship. 3. I therefore find that, although this Court has previously adopted the reasoning in Maisha Mapya, the subsequent consideration of the Court of Appeal authorities persuades me that the earlier approach ought not to be followed. This is not a departure undertaken lightly; it is necessitated by the hierarchical doctrine of precedent. 4. Accordingly, I find that the present claim is founded upon an employer–employee relationship and falls within the exclusion contemplated under section 13(5) of the Small Claims Court Act. This Court consequently lacks jurisdiction to entertain the claim. 5. Counsel for the Respondents have asked the court to dismiss the suit with costs. This court is inclined to strike out the suit rather than dismiss it as prayed. A court that lacks jurisdiction cannot determine the merits of the claim or grant substantive relief thereon. This also leaves the Claimant at liberty, subject to the applicable law and limitation periods to pursue the claim before the court vested with the requisite jurisdiction. 6. Accordingly, the suit is struck out with costs for want of jurisdiction. Costs of the Preliminary Objection and the Suit are assessed at Kshs. 5,000/=, payable by the Claimant to the Respondents. **RULING DATED, SIGNED AND DELIVERED VIRTUALLY AT MALABA SMALL CLAIMS COURT THIS 31ST DAY OF AUGUST 2026.** In the Presence of n/a for the Claimant and Mr. Emukule for the Respondents Court Assistant: Paul Otieno **A.Z. OGANGE** **RESIDENT MAGISTRATE/ADJUDICATOR** 31.08.2026