Stanmore Holdings Ltd & another v Huleti Enterprises Ltd & 3 others (Miscellaneous Application E421 of 2026) [2026] KEHC 10400 (KLR) (Commercial and Tax) (15 July 2026) (Ruling)

Stanmore Holdings Ltd & another v Huleti Enterprises Ltd & 3 others (Miscellaneous Application E421 of 2026) [2026] KEHC 10400 (KLR) (Commercial and Tax) (15 July 2026) (Ruling) Neutral citation: [2026] KEHC 10400 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Miscellaneous Application E421 of 2026 BK Njoroge, J July 15, 2026 Between Stanmore Holdings Limited 1st Applicant Be Forward Co., Limited 2nd Applicant and Huleti Enterprises Ltd Defendant and Kenya Revenue Authority 1st Interested Party Kenya Bureau Of Standards 2nd Interested Party Kenya Ports Authority 3rd Interested Party Ruling 1.International trade relies on absolute certainty. Commerce abhors a vacuum. The lifeblood of global trade is the seamless exchange of goods for monetary consideration. Contracts must be honoured. Obligations must be met. When a buyer defaults, the cascading effect threatens the entire supply chain. 2.The unpaid seller is left vulnerable. The goods sit idle. Demurrage accrues daily. Port authorities threaten auction. The law must intervene. It must offer a swift remedy. It must offer a decisive resolution. It must offer an equitable outcome. 3.This Court is confronted with a classic dilemma of transnational commerce. The dispute invokes the ancient lex mercatoria or "merchant law". It breathes life into the statutory veins of the Sale of Goods Act. The Applicants seek the intervention of this Court. They seek to salvage a commercial transaction gone awry. The buyer has breached the contract. The seller holds the shipping documents. The cargo is marooned at the Port of Mombasa. Time is of the essence. 4.The matter proceeded undefended. The Respondent was duly served. The Respondent opted for silence. However, the absence of a defence does not absolve the Applicants. The evidentiary burden remains intact. The Court does not operate as a rubber stamp. The Court must interrogate the law. The Court must examine its own jurisdiction. 5.The Court must ensure that the orders sought align with statutory regimes. These regimes include the Sale of Goods Act and the East African Community Customs Management Act (EACCMA). 6.The law of commerce is not static. It must respond to the realities of modern shipping. It must address the complexities of international logistics. It must balance the strict requirements of customs administration with the equitable rights of private merchants. This Ruling seeks to strike that delicate balance. Background Facts 7.The facts of this case are fairly straightforward. It is suit is undefended. It is supported by the Affidavit of Luqman Yusuf Abdallah. He is the General Manager of the 1st Applicant, Stanmore Holdings Limited. The 1st Applicant is a certified clearing agent. It is based in Nairobi. It acts on behalf of the 2nd Applicant. The 2nd Applicant is Be Forward Co. Limited. It is a motor vehicle exporter based in Tokyo, Japan. 8.On or about 4th December, 2025, the 2nd Applicant entered into a contract of sale. The purchaser was the Respondent, Huleti Enterprises Ltd. The subject matter was a specific, used motor vehicle. It was a Toyota Probox Van. The Chassis Number is NSP160-0049025. The agreed purchase price was USD 5,930. 9.The terms of the sale were clear. They were unambiguous. The property in the vehicle would only pass to the Respondent upon full payment. Full payment was a condition precedent. It was not a mere warranty. It went to the root of the contract. 10.The Respondent remitted a partial payment. The amount paid was USD 2,965. This left an outstanding balance. The balance was USD 2,965. Based on the initial agreement, the 2nd Applicant shipped the vehicle. The expectation of full payment remained. 11.The vehicle was loaded onto a vessel, the Glorious Ace (Voyage V-0106A). It departed from the Port of Nagoya, Japan. The Bill of Lading, Number BFKS00841467, was issued on 27th December, 2025. The Respondent was named as the consignee on the transport documents. 12.The vessel arrived at the Port of Mombasa. The vehicle was discharged. It entered the custody of the Kenya Ports Authority (KPA). The Respondent, however, failed to remit the balance. The default was absolute. The 2nd Applicant issued numerous demands. 13.Notice and Warning of Cancellation emails were dispatched. They were sent on 11th January, 2026 and 15th January, 2026. A Final Warning of Cancellation was issued on 18th January, 2026. The Respondent ignored the correspondence. The Respondent remained in persistent default. 14.The vehicle is currently accruing storage charges. Demurrage is escalating at the port. If left uncleared, the cargo faces an imminent risk. It risks being auctioned by the Kenya Revenue Authority (KRA). KRA does auctions overstayed goods. This is a statutory mandate. 15.To mitigate further financial ruin, the 2nd Applicant took decisive action. It exercised its contractual right. It cancelled the sale to the Respondent. The 2nd Applicant subsequently secured a new buyer. The new buyer is Nicholas Kyalo Kimeu. He has paid the full purchase price. 16.The 2nd Applicant now seeks to transfer the cargo. It intends to deliver the vehicle to the new buyer. To effect this, the documentation must be amended. The Bill of Lading must be altered. The Cargo Manifest must be updated. The consignee details must change. The name must shift from the Respondent to the new buyer. 17.The 1st Applicant holds the original shipping documents. The shipping line requires a Court order. The customs authorities require a Court order. They will not execute the amendment without judicial sanction. This necessitates the present Application. Orders Sought in the Application 18.The Applicants moved the Court vide a Notice of Motion. The Motion is dated 14th April, 2026. The Application is brought under several legal provisions. These include Sections 1A, 1B, and 3A of the Civil Procedure Act. It invokes Order 51 Rule 1 of the Civil Procedure Rules. It also relies on Section 43(8) of the East African Community Customs Management Act. 19.The Application was filed under a Certificate of Urgency. The situation is dire. The cargo is at risk. The Applicants seek the following substantive orders:1.Spent.2.That the Honourable Court be pleased to grant leave/orders to amend the Bill of Lading No. BFKS00841467 and the Cargo Manifest for the motor vehicle USED TOYOTA PROBOX VAN CHASSIS NO: NSP160-0049025 held at the Port of Mombasa.3.That the Kenya Ports Authority (KPA) and the Kenya Revenue Authority (KRA) be directed to amend the said Bill of Lading and manifest to reflect the new consignee as NICHOLAS KYALO KIMEU instead of the Respondent.4.That the Respondent, having breached the contract of sale by failing to pay the balance of USD 2,965, be restrained from interfering with the cargo.5.That the costs of this application be costs in the cause. Issues for Determination 20.The Court has considered the Application, the provisions upon which it is anchored and the written submissions. The Court frames three (3) key issues for determination.6.Whether the High Court, sitting at the Commercial and Tax Division in Nairobi, possesses the requisite jurisdiction to entertain a dispute concerning a Bill of Lading and cargo physically located at the Port of Mombasa.7.Whether the 2nd Applicant qualifies as an "unpaid seller" under the Sale of Goods Act and is legally entitled to exercise the right of resale.8.Whether the Court has the statutory authority to direct the amendment of a Bill of Lading and a Cargo Manifest under the prevailing customs legislation, and whether the Applicants have established a prima facie case to warrant the grant of the orders sought. Analysis 21.The Application before the Court seeks interlocutory reliefs. Although the Applicants moved the Court via a Notice of Motion seeking ostensibly interlocutory reliefs, the suit is undefended. The overriding objective of civil litigation under Sections 1A and 1B of the Civil Procedure Act compels this Court to dispose of the matter efficiently. Given the wasting or perishable commercial nature of the cargo and the escalating demurrage, the Court exercises its inherent jurisdiction under Section 3A to treat this application as the final determination of the rights of the parties. Whether the High Court, sitting at the Commercial and Tax Division in Nairobi, possesses the requisite jurisdiction to entertain a dispute concerning a Bill of Lading and cargo physically located at the Port of Mombasa. 22.Jurisdiction is everything. Without it, a Court operates in a void. A Court cannot confer jurisdiction upon itself. Judicial craft or innovation cannot create jurisdiction. This principle is foundational. It was firmly established by the Supreme Court of Kenya. 23.In the landmark case of Macharia & another v Kenya Commercial Bank Ltd & 2 others [2012] KESC 8 (KLR), the Supreme Court held that jurisdiction must flow from the Constitution or a specific statute. The Court stated:“A Court's jurisdiction flows from either the Constitution or legislation or both. Thus, a Court of law can only exercise jurisdiction as conferred by the constitution or other written law. It cannot arrogate to itself jurisdiction exceeding that which is conferred upon it by law.". 24.The predominant purpose of this transaction is the sale of goods. The relief sought is the amendment of shipping documents. This relief is ancillary to the breach of the sale contract. Therefore, the Commercial and Tax Division of the High Court in Nairobi is perfectly seized of the matter. 25.The jurisprudence is clear. It is consistent. In Gold Sun General Trading Llc v Kenya Revenue Authority & 2 others [2016] eKLR, the Court affirmed the High Court's jurisdiction. The Court held that the High Court has jurisdiction under Article 165 to hear matters concerning the infringement of commercial rights. The manner in which a litigant decides to move the Court is within their discretion. 26.In Pyrotechnics Company Limited v Maersk Kenya Limited [2021] KEHC 8546 (KLR) the High Court provided guidance on jurisdiction in cargo recovery disputes. The Court held that Kenyan Courts may override exclusive foreign jurisdiction clauses where the circumstances demonstrate the matter ought properly to be heard in Kenya. Similarly, internal territorial boundaries within the Kenyan High Court system do not defeat the overriding objective of justice. The Commercial Division in Nairobi has the mandate to resolve this dispute. Whether the 2nd Applicant qualifies as an "unpaid seller" under the Sale of Goods Act and is legally entitled to exercise the right of resale. 27.The foundation of the Applicants' case rests on the Sale of Goods Act Cap 31 of the Laws of Kenya. The Act is a codification of the common law. It codifies the historical lex mercatoria. It meticulously balances the rights of the buyer against the protections afforded to the seller. 28.The Sale of Goods Act provides a comprehensive framework. Section 3(1) defines a contract of sale of goods. It is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price. 29.The distinction between a "sale" and an "agreement to sell" is critical. Where the transfer of property is immediate, it is a sale. Where the transfer is delayed or subject to a condition, it is an agreement to sell. The transaction herein was an agreement to sell. Property was to pass only upon full payment. 30.Section 39(1)(a) of the Sale of Goods Act defines an "unpaid seller." A seller of goods is deemed to be an unpaid seller when the whole of the price has not been paid or tendered. In the present case, the purchase price was USD 5,930. The Respondent paid USD 2,965. The balance of USD 2,965 remains outstanding. The 2nd Applicant is, undeniably, an unpaid seller. 31.The passing of property is the fulcrum of this dispute. Property means ownership. Section 19 of the Act governs the passing of property in specific goods. It provides that property is transferred to the buyer at such time as the parties intend it to be transferred. The intention is gathered from the contract terms, the parties' conduct, and the circumstances. 32.Here, it was an express term of the sale that property would only pass upon full payment. This constitutes a statutory reservation of the right of disposal. This is governed by Section 21 and Section 25 of the Act. The seller reserved the right of disposal. The condition of full payment was not fulfilled. 33.Consequently, although the goods were shipped, legal ownership never passed to the Respondent. The 2nd Applicant retains the equitable and legal interest in the motor vehicle. The Respondent acquired no title. 34.What remedies are available to the 2nd Applicant? The law is not silent. Section 40 of the Sale of Goods Act outlines the rights of an unpaid seller. These rights exist by implication of law. They include a lien on the goods while in possession. They include a right of stopping the goods in transitu after parting with possession. They include a right of resale. 35.The seller, acting through its agent, retained the original Bill of Lading. Under Section 21 of the Sale of Goods Act, the seller thereby reserved the right of disposal. Because the condition precedent of full payment was breached, property never passed to the Respondent. The seller, constructively remaining in possession via the document of title, is lawfully entitled to exercise an unpaid seller's lien under Section 41 of the Act. Upon the Respondent's persistent default and the issuance of formal notice, the seller lawfully exercised the statutory right of resale under Section 48(3) to mitigate its financial exposure. 36.Finally, Section 47 of the Act grants the right of resale. The buyer has failed to pay the balance. Multiple demands were issued. Warnings of cancellation were ignored. 37.The seller is fully within its rights to resell the vehicle. This is necessary to mitigate losses. The 2nd Applicant has secured a new buyer. The new purchaser is Nicholas Kyalo Kimeu. The law protects this subsequent transaction. The original buyer's default triggers the seller's right to recover capital. Whether the Court has the statutory authority to direct the amendment of a Bill of Lading and a Cargo Manifest under the prevailing customs legislation, and whether the Applicants have established a prima facie case to warrant the grant of the orders sought. 38.A Bill of Lading is a document of profound commercial significance. It is not merely a receipt. It serves three distinct functions. First, it is a receipt for the goods shipped. Second, it is evidence of the contract of carriage. Third, it is a document of title to the goods. 39.At common law, the transfer of an endorsed Bill of Lading transfers proprietary rights. It transfers the property in the goods it represents. 40.This principle was immortalized in the case of Lickbarrow v Mason (1787) 2 TR 63, (1787) 100 ER 35 where the Court held that the transfer of a bill of lading passes title. This established the bedrock of international trade finance. It secured modern logistics. 41.However, the Respondent in this matter never received the original Bill of Lading. The 1st Applicant retains the original documents. The 1st Applicant acts as the agent for the seller. Without the original Bill of Lading, the Respondent cannot claim the cargo. 42.The cargo is legally paralyzed. It cannot be cleared by the defaulting buyer. It cannot be released to the new buyer until the shipping documents are formally amended. The port authorities demand perfection in documentation. 43.Under Section 24 of the East African Community Customs Management Act (EACCMA), strict reporting is mandatory. The master or agent of a vessel arriving from a foreign port must submit a complete cargo manifest. This must be given to customs authorities. 44.The manifest is a detailed declaration. It lists all cargo on board. It identifies the consignor. It identifies the consignee. It details the marks and numbers. It provides the description of the goods. 45.Can a manifest be amended after arrival? Yes. However, it is an exception rather than the rule. In standard shipping practice, a consignee amendment is a formal document correction. If requested while the vessel is in transit, the shipping line can amend it easily. 46.Once the vessel arrives and the manifest is filed, amending the Bill of Lading is highly restricted. This restriction prevents tax evasion. It prevents smuggling. It stops fraudulent diversion of cargo. 47.To prevent such fraud, customs regulations require strict adherence to manifested details. The system is designed to protect revenue. It is designed to secure the supply chain. 48.However, this strictness cannot be used as an instrument of injustice. It cannot shield a defaulting buyer. Where a genuine commercial breach has occurred, the law must provide an avenue for rectification. The unpaid seller seeks to mitigate losses. The law must facilitate this. 49.The EACCMA does not prohibit amendments. It regulates them. The High Court has inherent equitable jurisdiction. It has the power to order the correction of statutory registers and documents. This is applicable where it is just and equitable to do so. 50.It has not been demonstrated that the original buyer has interfered with the motor vehicle so as to justify the orders of injunction sought. The Courts does not act in vain. Without justification of any threats or danger, the injunction sought is not granted. 51.If the Court does not intervene, the consequences are dire. Under Section 42 and Section 43 of the EACCMA, goods deposited in a customs warehouse that are not entered and removed within thirty (30) days are deemed overstayed. KPA acts as a customs warehouse. 52.The Commissioner of Customs is empowered to auction such goods. The auction recovers taxes and storage costs. The vehicle in question arrived on 27th December, 2025. The statutory clock has been ticking. 53.The accruing port storage charges and demurrage are rapidly increasing. They diminish the value of the security. The balance of convenience tilts heavily in favour of granting the amendment. 54.Refusing the order would result in the auction of the vehicle. This would occasion severe and irreparable financial loss to the 2nd Applicant. The 2nd Applicant has already suffered a breach of contract. The Respondent, having only paid half the price and abandoned the transaction, stands to suffer no legitimate prejudice. 55.The Application proceeded undefended. The Respondent has not filed a Replying Affidavit. The law regarding undefended suits is well settled. An applicant is not automatically entitled to the orders sought merely because the Respondent is absent. 56.The Court is not a rubber stamp. The Applicant must still prove its case. The standard is a balance of probabilities. 57.The Applicants have met this evidentiary threshold. The documentary evidence is overwhelming. It is incontrovertible. The Court has examined the Pro Forma Invoice (No. 3649296). 58.The Court has reviewed the emails warning of cancellation due to default. The Final Warning of Cancellation is on record. The Court has reviewed the Bill of Lading (BFKS00841467). This proves the shipment. 59.The Court has also examined the Affidavit of Nicholas Kyalo Kimeu. He swears to his purchase of the vehicle. He undertakes to indemnify the authorities. 60.The right of the unpaid seller has been brazenly infringed. The Respondent failed to remit the balance of USD 2,965. The financial loss is manifest. It is the daily accrual of port charges. It is the looming threat of a customs auction. 61.The Applicants have given a clear undertaking. They will indemnify the shipping line. They will indemnify KRA. They will indemnify KPA. This indemnification covers any liabilities arising from the amendment of the documents. This cures any potential risk to the interested statutory parties. 62.Transnational commerce demands efficiency. It demands certainty. When parties enter into international contracts of sale, they rely on the predictability of the law. 63.The Respondent has breached the contract. The 2nd Applicant retains ownership. The 2nd Applicant retains the right to resell. The amendment of the Bill of Lading and the Cargo Manifest is necessary. It is the logical consequence of the exercise of the right of stoppage and resale. 64.The customs authorities must facilitate the lawful resolution of commercial disputes. They must do so provided their revenue mandates are not compromised. The taxes will be paid by the new consignee. The state loses nothing. 65.The Court is persuaded that the Applicants have made out their case. The orders sought are meritorious. 66.As to costs, the same lie at the discretion of this Court. They ordinarily follow the event. The costs shall be in the cause. Determination 67.The Applicant’s application by way of a Notice of Motion dated 14th April, 2026 is HEREBY allowed in the following terms:2.That the Honourable Court Hereby grants leave/orders to amend the Bill of Lading No. BFKS00841467 and the Cargo Manifest for the motor vehicle Used Toyota Probox Van Chassis No: NSP160-0049025 held at the Port of Mombasa.3.That the Kenya Ports Authority (KPA) and the Kenya Revenue Authority (KRA) are Hereby directed to accept, facilitate, and approve the amendments to the said Bill of Lading and manifest to reflect the new consignee as Nicholas Kyalo Kimeu instead of the Respondent.4.That the costs of this application be costs in the cause. 68.It is so ordered. DATED, SIGNED AND DELIVERED AT MILIMANI THIS 15TH DAY OF JULY, 2026NJOROGE BENJAMIN K.JUDGEIn the presence of:Miss Maiyo for the Applicants.Mr Kiprono for the Respondent.N/A for the Interested PartiesMr. John Paul - Court Assistant