https://new.kenyalaw.org/akn/ke/judgment/scc/2026/23

Shree Ghanshyam Hardware Limited v Mexiume Limited (Commercial Case E8822 of 2024) [2026] SCC 23 (KLR) (22 May 2026) (Judgment) Neutral citation: [2026] SCC 23 (KLR) Republic of Kenya In the Milimani Small Claims Court Commercial Case E8822 of 2024 GW Kiamah, RM May 22, 2026 Between Shree Ghanshyam Hardware Limited Claimant and Mexiume Limited Respondent Judgment 1.The claimant instituted this suit via the statement of claim dated 25/6/2024 seeking judgment against the respondent for Kshs. 184,605/= on the basis that it supplied the respondent with goods and machinery for building and constructions between 2021 and 2023 and raised several invoices but the same were not settled. That the debt stood at Kshs. 119,100/= as at 25/2/2023 and the same was attracting 5% interest monthly as provided for in the invoices. That the outstanding sum inclusive of interest was thus Kshs. 184,605/= as of 29/2/2024 and the same remained pending. 2.The respondents filed a response dated 2/12/2024 and averred that some of the delivered goods were defective and the same were returned. That payment was done on the invoices raised for accepted goods and the invoices relied on by the claimant reflected goods that were returned and others were to be fixed but the requests were ignored. The respondent thus averred that the invoices ought to have been recalled, and the total amount payable to the respondent was Kshs. 242,000/=. The respondent also denied the interest charge of 5% and denied any outstanding balance. 3.In response, the claimant filed a further statement dated 1/4/2025 and averred that there was only two issues regarding defective machines and two relevant credit notes were registered in the respondent’s statement nullifying the invoices thus the issues were resolved. All other claims of defective goods were denied and the claimant maintained that delivery was done thus the invoices ought to have been settled. 4.The claim proceeded under Section 30 of The Small Claims Court Act. The claimant’s submissions were dated 4/2/2026 whereas the respondent’s were dated 2/4/2026. However, both parties breached the clear directions on page limit and format, consequently, both submissions are expunged from court record. I have seen and considered the pleadings and evidence on record. The main issue for determination is whether the claimant has proven its case as against the respondent. 5.The standard of proof in civil claims is on a balance of probabilities. See the Court of Appeal in Mumbi M'Nabea v David M. Wachira [2016] eKLR. 6.Sections 107, 108 and 109 of the Evidence Act, Chapter 80 of the Laws of Kenya places the burden of proof of a fact on the person who wishes the court to believe in the existence of such fact. 7.It was not in dispute that the parties had a contractual relationship for delivery of constructions goods and machines. What was in dispute was whether there was any outstanding balance, and whether 5% interest on balance was chargeable. 8.The claimant produced the relevant invoices and statement which reflected a balance of Kshs. 119,100.00/= as of 25/2/2023. Though the respondent pleaded that the outstanding invoices reflected goods that were faulty and the same were returned, the respondent failed to produce any evidence to proof communication as regards the complains raised, or evidence of non-acceptance of those goods. On the hand, the claimant was able tot proof that the rejected goods were recalled and credit notes numbers 126, 142, 173 and 316 raised to recall the relevant invoices. The claim that invoice numbers 9899, 10159, 10041 and 10281 were for faulty and unrepaired goods was unsupported and that defense fails. As such, the amounts therein were payable. 9.Having found that the invoices were duly raised, the burden of proof shifted to the respondent to proof that the invoices were either settled, or that the goods were not accepted due to defects. Without such proof, I do find that on a balance of probability, the claimant proved an outstanding balance of Kshs. 119,100.00/=. 10.As to whether interest of 5% per month is chargeable on late payment, I do note that it trite that interest cannot be imposed merely though invoices. An invoice does not create a contract, it only proofs that a contractual relationship exists. It thus follows that interest would bind parties only by agreement either express or implied. 11.There was nothing to proof that there was previous acceptance of such terms and the 5% interest was unilaterally introduced in the invoices. Further, a monthly rate of 5% amounts to an annual rate of 60% and application of the same would be inordinately high and excessive. In Descent Buildwell LLP v Reliance Communications (NCLAT, 2025), the court rejected a claim for interest based on invoices on grounds that there was no proof of prior acceptance. 12.I do however note that by settling the invoices as raised, the respondent implied consent to the terms. See the case of Agromate v Felcra Niaga (Court of Appeal, 2022) where it was held that failure to object to interest ibntoduced through invoices amounted to acceptance of the interest clause. There was also nothing to proof that the respondent protested to the clause on interest noting that the respondent paid earlier invoices with the same terms, retained the goods without protest, and continued trading with the claimant. 13.However, having already found that the interest charged was excessive, on the basis of Section 26 of the CPA, this Court has discretion to award reasonable interest. 14.In the end, I find that the claimant has partially proven its claim successfully on a balance of probabilities and I hereby order as follows: -1.Judgment is hereby entered in favour of the claimant as against the respondent for the sum of Kshs. 119,100/=. The sum shall attract interest at court rate from the date of filing till the date of judgment.2.The total sum in (1) above shall attract interest at court rate from the date of judgment till payment in full.3.The claimant is awarded costs of Kshs. 20,000/= 15.The respondent is granted a 30- days stay of execution.It is so decreed. DATED AND DELIVERED AT NAIROBI VIA CTS THIS 22ND DAY OF MAY 2026HON. GLADYS W. KIAMAHRESIDENT MAGISTRATE/ADJUDICATOR