https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9917

Placid View Properties Limited v Etihad Cap Africa Limited (Commercial Arbitration Cause E027 of 2024) [2026] KEHC 9917 (KLR) (Commercial and Tax) (2 July 2026) (Ruling) Neutral citation: [2026] KEHC 9917 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Arbitration Cause E027 of 2024 RC Rutto, J July 2, 2026 Between Placid View Properties Limited Applicant and Etihad Cap Africa Limited Respondent Ruling 1.Following the delivery of the Ruling delivered on 28th February, 2025, in which this Court awarded costs and upheld an arbitral award made and published on 8th March, 2024, against the Applicant in the principle sum of USD 175, 000 and interest amounting to USD 55, 716. 16, the Respondent filed a Bill of Costs dated 19th May, 2025. In a Ruling delivered on 24th November, 2025, the Deputy Registrar, taxed and allowed the Respondent’s Party and Party Bill of Costs in the sum of Kshs. 926, 541/=. 2.Dissatisfied by the Ruling of the Deputy Registrar, the Applicant has filed the present reference seeking orders among others, that the Ruling of the Deputy Registrar dated 24th November, 2025, be set aside with respect to Item 1 (instruction fees) and Item 2 (getting up fees) and that the Respondent’s Bill of costs be taxed afresh in relation to the contested items. 3.The gist of the reference as set out in the Notice of Objection to the taxation dated 25th November, 2025, concerns items 1 and 2 of the Respondent’s Party and Party Bill of Costs. The Applicant contends that the taxing master erred in principle and improperly exercised her discretion improperly by failing to consider that the matter was determined at the preliminary stage. Further, the Applicant argues that the taxed bill of costs is not commensurate to the work done, given that the suit was disposed at a preliminary stage. The Applicant therefore urges the court to set aside the taxing master’s ruling in respect to Item 1 on instructions fees and Item 2 on getting up fees on the basis that it is contrary to the principles of fairness, reasonableness and access to justice. 4.In opposing the application, the Respondent filed a replying affidavit sworn on 13th February, 2026, by its Director. The Respondent states that when the bill of costs came up for taxation on 22nd July, 2025, the Applicant was directed to file submissions and raise any objections to specific items. Despite the matter being mentioned twice to allow the Applicant to file submissions, the Applicant failed to do so. 5.The Respondent further state that the taxing master awarded instruction fees of Kshs. 647, 750. 84/= and getting up fees at Kshs. 215, 915. 90/- in accordance with the scales set out in Schedule 6 of the Advocates (Remuneration) Order. It is the Respondent’s position that the taxing master applied the correct legal principles and scales in assessing the bill of costs and that the Applicant has not demonstrated any error in principle or misapplication of the law. 6.The Respondent concludes that taxation of costs is a discretionary exercise which was exercised judiciously, reasonably and in accordance with the law. 7.The reference was canvassed by way of written submissions. The Applicant’s submissions are dated 8th April, 2026, while the Respondent’s submissions are dated 28th April, 2026. Applicant’s submissions 8.The Applicant began its submissions with a brief introduction and identified the issues for determination as whether the taxation was proper and whether the court should exercise its discretion to interfere. 9.On the first issue, the Applicant submitted that the taxation of the impugned items was improper and founded on errors of principle. It contends that the underlying suit was determined at a preliminary stage and did not proceed to a full hearing. Consequently, the instruction fees awarded were manifestly excessive and disproportionate to the work undertaken, while the award of getting-up fees was not justified, there having been no substantive trial preparation. In support of this position, the Applicant relies on Mwanje v ICS Technical College & another (Judicial Review Application E154 of 2024) [2025] KEHC 8116 (KLR) arguing that getting-up fees are only justifiable where a matter has been prepared for hearing and may be improperly awarded where the matter does not proceed to hearing or is not confirmed for hearing. The Applicant therefore contends that, as the present suit did not proceed to hearing, the award of getting-up fees was erroneous in principle and unjustified. 10.The Applicant further relies on First American Bank of Kenya Ltd v Shah & 2 others [2002] KEHC 1277 (KLR) for the proposition that a court may interfere with taxation where there is an error of principle or where the award is manifestly excessive. It notes that, in that case the court reduced the instruction fees awarded, and submits that similar intervention is warranted in the present matter. 11.Additionally, the Applicant submits that that it has filed an application before the Court of Appeal, being Civil Application No. E220 of 2025, seeking to set aside the ruling delivered on 28th February, 2025, in Commercial Arbitration Cause No. E027 of 2024. It further, states that it filed a substantive appeal, being Court of Appeal Civil Application No. E063 of 2026, which forms the substratum of the taxed costs. The Applicant avers that it is actively pursuing a stay of execution and awaits directions from the Court of Appeal. It therefore contends that proceeding with taxation before the High Court was premature and risked rendering the appellate process nugatory. It argues that the Taxing Master failed to consider the pendency of the appellate proceedings, resulting in an award made without due regard to relevant and material circumstances. 12.On the issue of the Court’s discretion, the Applicant submits that this Court has jurisdiction to interfere with the decision of a Taxing Master’s decision where sufficient cause has been demonstrated. It argues that such cause exists in this case because there is a pending appeal challenging the foundation of the costs; the Applicant acted reasonably in awaiting directions; the taxation resulted in an excessive and unjust award; and there is a risk of execution that may occasion substantial injustice. On that basis, the Applicant urges the Court to intervene in the interests of justice. 13.In conclusion, the Applicant submits that the taxation was conducted without due regard to material circumstances and that the awards in respect of Items 1 and 2 were excessive and founded on errors of principle. It therefore prays that the ruling of the Taxing Master delivered on 24th November, 2025, be set aside, that the items be taxed afresh, and that the Court grant any further orders it deems fit in the interests of justice. Respondent’s submissions 14.The Respondent’s submissions began with a brief introduction. It identified a single issue for determination namely whether the Applicant has demonstrated any basis upon which this court may interfere with the taxing master’s exercise of discretion. 15.Relying on John Oganda and Company Advocates v Superclean Shine Limited [2026] KEHC 3489 (KLR), Joreth Ltd v Kigano & Associates (2002) eKLR and First American Bank of Kenya Ltd v Shah & 2 others (Civil Suit 2255 of 2000) [2002] KEHC 1277 (KLR) (Civ) (25 April 2002) (Ruling), the Respondent submits that the law is settled that a court will not interfere with a taxation unless it is demonstrated that the taxing officer committed an error of principle or that the award is manifestly excessive. 16.With regard to instruction fees, the Respondent submits that the Applicant has failed to demonstrate any error on the part of the Taxing Master. It contends that the Applicant’s complaint is limited to the assertion that the matter did not proceed to full hearing and that the fees awarded were excessive. According to the Respondent, that argument is legally untenable because instruction fees are not dependent on the stage at which proceedings conclude, but rather upon the nature, importance and value of the dispute. The Respondent relies on Joreth Ltd v Kigano & Associates [2002] KECA 153 (KLR), where the Court of Appeal emphasized that the value and importance of the subject matter are key considerations in assessing instruction fees. Further reliance is placed on Otieno Ragot & Company Advocates v Kenya Airports Authority [2021] KECA 587 (KLR) where the Court held that the substance of the dispute guides the assessment of instruction fees. It is submitted that the substance of the dispute in the present matter was readily ascertainable from the pleadings and that the Taxing Master correctly applied Schedule 6 of the Advocates (Remuneration) Order having taken into account all relevant factors. The Respondent therefore argues that there is no evidence of misdirection or application of a wrong principle. 17.On getting up fees, the Respondent contends that such fees are properly awardable where a matter has been prepared for hearing. It argues that the Taxing Master only needed to be satisfied that substantial preparation had been undertaken before awarding getting-up fees and that the threshold was met. The Respondent further submits that the governing principle is that getting-up fee compensate for preparatory work, and are not contingent upon the matter proceeding for a full hearing. In support of this position, it relies on Pineapples Edge Limited v Kipkenei & Co Advocates [2025] eKLR. It is therefore contended that the Applicant has not demonstrated that the discretion was exercised arbitrarily or on the basis of any wrong principle. 18.The Respondent further submits that the Applicant failed to actively participate in the taxation proceedings despite having been afforded several opportunities to do so. Consequently, the Respondent argues that the Applicant cannot now challenge the outcome without first demonstrating a clear error of principle. 19.On the issue of the pending appeal, the Respondent reiterates that the existence of appellate proceedings does not bar taxation in the absence of a stay order. It submits that the Taxing Master was entitled to proceed with taxation notwithstanding the intended appeal and that the appeal itself does not invalidate the taxation process. It maintains that in the absence of an order staying proceedings, the Taxing Master was perfectly entitled to continue with taxation. To hold otherwise, it argues, would occasion unnecessary delay and frustrate the enforcement of lawful entitlements and the fruits of litigation. 20.The Respondent also submits that the application improperly invites this Court to reassess the Bill of Costs and substitute its own discretion for that of the Taxing Master which is impermissible. It maintains that the role of the court on a reference is limited to determining whether a clear error of principle has been established. Since no such error has been demonstrated, the Respondent urges that the Taxing Master’s discretion ought to be respected. 21.In conclusion, the Respondent submits that the Applicant’s chamber summons dated 25th November, 2025, lacks merit and prays that it be dismissed with costs and that the ruling of the Taxing Master be upheld. Analysis and Determination 22.I have carefully considered the chamber summons application herein, the affidavit in support thereof, the response opposing the summons, and the rival written submissions filed by the parties. The primary issue falling for determination is whether this court ought to interfere with the decision of the Taxing Officer and if so, to what extent. 23.Taxation of costs is fundamentally a matter within the discretion of the Taxing Officer. The principles governing the circumstances under which a Judge of the High Court may interfere with that discretion are now well settled. In Republic v Ministry of Agriculture and 2 Others; Ex parte Muchiri W’Njuguna & Others [2006] eKLR, the Court articulated the applicable test as follows;“The taxation of costs is not a mathematical exercise; it is entirely a matter of opinion based on experience. A court will not, therefore, interfere with the award of a taxing officer, particularly where he is an officer of great experience, merely because it thinks the award is somewhat too high or too low; it will only interfere if it thinks the award is so high or so low as to amount to an injustice to one party or the other…. The court cannot interfere with the taxing officer’s decision on taxation unless it is shown that either the decision was based on an error of principle, or the fee awarded was manifestly excessive as to justify an inference that it was based on an error of principle. Of course it would be an error of principle to take into account irrelevant factors or to omit to consider relevant factors. And according to the Advocates (Remuneration) Order itself, some of the relevant factors to take into account include the nature and importance of the case or matter, the amount or value of the subject matter involved, the interest of the parties, the general conduct of the proceedings and any direction by the trial judge. Needless to state, not all the above factors may exist in any given case and it is therefore open to the taxing officer to consider only such factors as may exist in the actual case before him. If the court considers that the decision of the taxing officer discloses errors of principle, the normal practice is to remit it back to the taxing officer for reassessment unless the judge is satisfied that the error cannot materially have affected the assessment… A taxing officer does not arrive at a figure by multiplying the scale fee, but places what he considers a fair value upon the work and responsibility involved… Since costs are the ultimate expression of essential liabilities attendant on the litigation event, they cannot be served out without either a specific statement of the authorizing clause in the law, or a particularized justification of the mode of exercise of any discretion provided for…. The complex elements in the proceedings which guide the exercise of the taxing officer’s discretion, must be specified cogently and with conviction. The nature of the forensic responsibility placed upon counsel, when they prosecute the substantive proceedings, must be described with specificity. If novelty is involved in the main proceedings, the nature of it must be identified and set out in a conscientious mode. If the conduct of the proceedings necessitated the deployment of a considerable amount of industry and was inordinately time-consuming, the details of such a situation must be set out in a clear manner. If large volumes of documentation had to be classified, assessed and simplified, the details of such initiative by counsel must be specifically indicated – apart, of course, from the need to show if such works have not already been provided for under a different head of costs….” 24.This decision further emphasizes that an error of principle arises where irrelevant factors are considered or relevant factors omitted, and in such instances, the proper course is ordinarily to remit the matter back to the taxing officer for reassessment. 25.The foregoing authority underscores the limited jurisdiction of this court when reviewing a taxation. The Court will not interfere merely because it would have reached a different conclusion on quantum. Intervention is only justified where there is proof of an error of principle or where the amount awarded is so manifestly excessive or low as to occasion an injustice. This position has been consistently reiterated in numerous subsequent decisions. In KANU National Elections Board & 2 Others v Salah Yakub Farah [2018] eKLR, the Court stated:“…before the court interferes with the decision of the taxing master it must be satisfied that the taxing master’s ruling was clearly wrong, as opposed to the court being clearly satisfied that the taxing master was wrong. This indicates that the court will not interfere with the decision of the taxing master in every case where its view of the matter in dispute differs from that of the taxing master, but only when it is satisfied that the taxing master’s view of the matter differs so materially from its own that it should be held to vitiate the ruling.” 26.Accordingly, the duty of this Court is to determine whether the Taxing Officer properly applied the correct legal principles and took into account all material considerations. 27.The Applicants challenge the assessment of instruction fees under Item 1, contending that the matter was disposed of at a preliminary stage, and the instruction fees awarded was therefore excessive and disproportionate to the work done. They further argue that the taxing officer failed to consider that the matter did not proceed to a full hearing. 28.I have carefully examined the impugned ruling. It is evident that the Taxing Officer correctly identified the applicable law, namely Schedule 6 of the Advocates (Remuneration) Order, 2014. She also properly identified the value of the subject matter from the pleadings and judgment as arising from the arbitral award which the Applicant sought to challenge. The arbitral award comprised USD 230,716.16, being USD 175,000 in principal and USD 55,716.16, in accrued interest, equivalent to Kshs. 30,215,875.71/-. On that basis, the Taxing Officer applied Schedule 6(1)(b) of the Advocates (Remuneration) Order and computed instruction fee at Kshs. 647,750.84/-. 29.The law governing assessment of instruction fees is settled. In Joreth Limited v Kigano & Associates [2002] 1 EA 92, the Court of Appeal held that the value of the subject matter is to be determined from the pleadings, judgment or settlement, and where ascertainable, forms the basis for taxation. Where it is not ascertainable, the taxing officer exercises discretion guided by relevant factors such as the nature and importance of the matter, the interests of the parties, the conduct of the proceedings and all other relevant circumstances 30.In the present matter, the Applicant has not demonstrated that the Taxing Officer misapprehended the value of the subject matter, applied the wrong schedule, or took into account irrelevant considerations. The complaint is essentially that the matter was disposed of at a preliminary stage. However, that fact alone does not constitute an error of principle. Instruction fees are earned upon being engaged and are not contingent upon the stage at which the proceedings terminate. A matter determined on a preliminary objection does not, without more, justify a reduction in instruction fees properly calculated in accordance with the Advocates (Remuneration) Order. 31.Notably, the Taxing Officer expressly considered the pleadings, the applicable scale and the value of the subject matter before arriving at the impugned figure. I am satisfied, that no error of principle has been demonstrated. Further, the sum awarded cannot be said to be manifestly excessive so as to warrant interference. Accordingly, I find no basis to disturb the award under Item 1. 32.The second challenge relates to Item 2 on getting-up fees in the sum of Kshs. 215,915.90/-. The Applicant argues that since the matter did not proceed to full hearing, such fees were unjustified. 33.Getting-up fees are governed by Schedule 6 paragraph 2 of the Advocates (Remuneration) Order, which provides:In any case in which a denial of liability is filed or in which issues for trial are joined by the pleadings, a fee for getting up and preparing the case for trial shall be allowed in addition to the instruction fee and shall be not less than one-third of the instruction fee. 34.The rationale for getting-up fees is to compensate an advocate for the preparatory work undertaken in readiness for trial. Such work includes consideration of pleadings, legal research, evidentiary review, and, formulation of legal strategy. However, getting-up fees are not automatic, there must be evidence that the matter had progresses to a stage justifying preparation for hearing. In Mwanje v ICS Technical College & Another (Judicial Review Application E154 of 2024) [2025] KEHC 8116 (KLR), the court awarded getting up fees. The court held that;“ 20.As to whether the getting up fees in this matter was justified, I note that the matter was opposed by the filing of a replying affidavit sworn by Judith Ngene Musyoka on 22nd July 2024. Thereafter, directions were given on the mode of disposal of the substantive motion and after the parties filed written submissions, they attended court on 1/10/2024 and highlighted their submissions upon which judgment was slated for 8/11/2024 but was posted in the Case Tracking System on 13th January, 2025. 21.Accordingly, I find and hold that the taxing master erred in principle when she held that no fee for getting up for trial was chargeable in view of the above court record showing that the matter was opposed and it proceeded to full hearing…..” 35.In this case, the record demonstrates that the matter was contested. The Respondent filed a Replying Affidavit and a Notice of Preliminary Objection challenging the Originating Summons. Pleadings were exchanged and legal issues identified. Counsel necessarily engaged in legal research and preparation, culminating in a successful defence of the claim. 36.More importantly, the Taxing Officer expressly applied Schedule 6 paragraph 2 and awarded 1/3 of the instruction fee as prescribed under the Order. There is no indication that she misapprehended the applicable law or exercised her discretion on wrong principles. 37.While the matter was ultimately disposed of on a preliminary objection, that fact alone does not negate the preparatory work undertaken. Litigation preparation commences well before the hearing stage, and by the time the preliminary objection was argued, counsel had already invested substantial effort in preparation. 38.In the circumstances, I am not persuaded that the Taxing Officer erred in principle in awarding getting up fees. The amount awarded is neither arbitrary nor manifestly excessive. 39.The Applicant further argues that taxation ought not to have proceeded in light of the proceedings before the Court of Appeal. This argument is unmeritorious. The mere existence of an appeal does not operate as a stay of proceedings or stay of execution. A successful litigant remains entitled to enjoy the fruits of its judgment unless a stay is granted. 40.No order staying taxation was place before the Taxing Officer or this Court. In the absence of such an order, the Taxing Officer was perfectly entitled to proceed with taxation of the Bill of Costs. The pendency of an appeal cannot, therefore, invalidate taxation. 41.I have also considered the Respondent's contention that the Applicant failed to participate in the taxation proceedings despite being granted opportunities to do so. While such failure does not bar a reference, it reinforces the obligation upon the Applicant to demonstrate a clear error of principle, which has not been discharged in this case. 42.Ultimately, what the Applicant seeks is for this Court to reassess the quantum and substitute its own view for that of the Taxing Officer. That is not the function of this Court on a reference from taxation. The Court's jurisdiction is supervisory not appellate. Unless an error of principle is demonstrated or the award is shown to be manifestly excessive, the discretion of the Taxing Officer must be respected. 43.I am not satisfied that the Taxing Officer committed any error of principle in taxing Items 1 and 2 of the Respondent's Party and Party Bill of Costs. Neither am I satisfied that the amounts awarded are so manifestly excessive as to warrant interference by this Court. 44.In the circumstance, I find no merit in the Chamber Summons application dated 25th November, 2025. The same is hereby dismissed. The Respondent shall have the costs of this reference, assessed at Kshs. 20,000/=. 45.Orders accordingly. DELIVERED, DATED AND SIGNED VIRTUALLY THIS 2ND DAY OF JULY, 2026RHODA RUTTOJUDGECourt Assistant: WabwireMs. Obuya for the ApplicantMr. Olaha for the Respondent