https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12823

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **COMMERCIAL AND TAX DIVISION** **CIVIL CASE NO. E389 OF 2023** **TIMSALES LIMITED ……….……………….. PLAINTIFF/APPLICANT** **VERSUS** **SILPACK INDUSTRIES LIMITED….DEFENDANT/RESPONDENT** **RULING** 1. Before this Court for determination is the Plaintiff’s application dated 12th May, 2025, seeking the following orders; 1. ***a Summary Judgment as against the Defendant for the sum of USD 946, 068. 63 together with interest at court rates from the date of filing the suit until payment in full.*** 2. ***in the alternative, judgment on admission for the same amount together with interest at court rates from the date of filing suit until payment in full.*** 3. ***costs of the application and the suit.*** 2. The application is supported by the affidavit of Prakash Kanani, a sales Executive of the Plaintiff. He depones that between February 2021 and January 2022, the Defendant ordered and received various goods from the Plaintiff. Following each supply, the Plaintiff issued invoices for the orders to the Defendant. However, the Defendant allegedly failed to settle the outstanding invoices, resulting in an unpaid balance of USD 946,068.63 inclusive of accrued interest as at the date of filing suit. 3. The deponent further states that the Defendant expressly acknowledged the debt by issuing several post-dated cheques pursuant to a payment arrangement between the parties. Under this arrangement, the Plaintiff was to present the cheques for payment progressively and in accordance with the Defendant's instructions so as to avoid overdrawing its account at I&M Bank Limited. According to the Plaintiff, the cumulative value of the cheques amounted to the liquidated sum of USD 946,068.63, thereby constituting a clear admission of indebtedness. 4. He further avers that in 2022, the Defendant informed the Plaintiff that its factory had been destroyed by fire, adversely affecting its operations and cash flow. Consequently, the Defendant requested the Plaintiff not to bank any of the post-dated cheques until further notice. He further avers that despite numerous efforts to recover the debt, the Plaintiff was unsuccessful, prompting the filing of the suit. 5. The Plaintiff contends that the Defendant's conduct, including the issuance of post-dated cheques, amounts to a clear admission of liability, leaving no triable issue for determination and justifying the entry of summary judgment or, alternatively, judgment on admission. 6. The application is opposed through a Replying Affidavit sworn on 15th July, 2025, by Parit Narendra Shah, the director of the Defendant. The Defendant contends that the application does not meet the threshold for summary judgment prescribed under Order 36 of the Civil Procedure Rules, as the dispute raises several bona fide triable issues requiring determination at full trial. 7. The Defendant relies on its Amended Statement of Defence dated 21st May, 2025, in which it denies liability for the claimed sum of USD 946,068.63. While acknowledging that it ordered goods from the Plaintiff, the Defendant alleged that the Plaintiff failed to deliver the full quantities ordered and that some of the goods supplied were of poor quality and failed to meet the Defendant's specifications and which deficiencies were communicated to the Plaintiff. According to the Defendant, these alleged breaches directly affect the validity and quantum of the Plaintiff's claim and constitute genuine issues for trial. 8. The Defendant also disputes the Plaintiff's claim for interest, denying the existence of any agreement, whether oral or written, providing for interest at the rate of 14% per annum. It argues that the existence and enforceability of such a term is itself a substantial triable issue. 9. With regard to the dishonoured post-dated cheques, the Defendant denies that their dishonour constitutes evidence of wrongdoing or an unequivocal admission of liability. It attributes the non-payment to a devastating fire that destroyed its factory in April 2022, severely affecting its business operations and financial position. The Defendant contends that the legal effect of that force majeure event on the parties' contractual obligations raises complex issues that cannot be determined summarily. 10. The Defendant further disputes the Plaintiff's assertion that it received insurance compensation following the fire. It states that no insurance proceeds have been paid and that it is currently involved in High Court Commercial Case No. E230 of 2024 against ABSA Bank and SBM Bank Limited concerning the insurance claim. According to the Defendant this dispute demonstrates that any anticipated insurance recovery remains unresolved and unavailable. 11. The Defendant also denies deliberately avoiding communication with the Plaintiff, maintaining that any interruption in communication resulted from the operational disruptions caused by the factory fire rather than an intention to evade payment. Additionally, it asserts that it was never served with a formal demand or notice before commencement of the suit and contends that the Plaintiff should be put to strict proof of such service since it bears upon the Plaintiff's claim for costs and further illustrates that there remain unresolved factual disputes between the parties. 12. In conclusion, the Defendant maintains that the issues relating to the quality and quantity of goods supplied, liability for the debt, entitlement to interest, the impact of the factory fire, the status of insurance compensation, and pre-suit communications constitute genuine and substantial triable issues. It therefore urges the Court to dismiss the application and allow the dispute to proceed to a full hearing. 13. The application was canvassed by written submissions as follows; ***Applicant’s submissions*** 1. The Plaintiff’s/Applicant’s commenced its submissions by outlining the factual background of the application. Relying on Order 13, rule 2 of the Civil Procedure Rules, and the decision in ***Sunrose Nurseries Ltd v Gatoka [2014] eKLR****,;* ***Dubai Bank Kenya Limited v Trans Enterprises Limited & Another [2012] eKLR*** and ***Prabhan Industries v Unitech Industries Agencies Limited [2015] eKLR*** the Applicant submitted that the documentary evidence produced by the parties including the invoices, the post-dated cheques and the Respondent's own correspondence constitutes a clear and unequivocal admission of indebtedness in the sum of USD 946,068.63. It contends that the Respondent subsequent explanations merely seek to delay the inevitable conclusion that the debt is due and payable. 2. The Applicant further submitted that the issuance of the post-dated cheques, together with the Respondent's explanation that they could not be honoured due to fire incident, amounts to an express admission of liability. It argues that the Respondent has never denied issuing the cheques or that they related to the outstanding debt; but has only attempted to explain its failure to honour them. The Applicant maintains that the defence based on the fire and the alleged defects in the supplied goods is an afterthought intended solely to manufacture triable issues. In support of this position, it relied on the case of ***Simal Velji Shah v Chemafrica Limited [2014] eKLR****,* the case of ***Safaricom Limited v Intercom East African Limited [2007] eKLR****.* 3. Citing ***Vivo Energy Kenya Limited (Initial Party Kenya Shell Limited) v George Karunji [2014] eKLR****,* the Applicant submitted that once an application for summary judgment has been filed, the Respondent bears the evidential burden of demonstrating why the claim should not be allowed. According to the Applicant, the Respondent failed to discharge that burden, having produced no credible evidence in support of its allegations. It contended that the Replying Affidavit and the Amended Statement of Defence consist of mere denials and unsupported assertions that neither disclose a bona fide defence nor raise any genuine triable issue. 4. In conclusion, the Applicant submitted that the Respondent has failed to demonstrate the existence of any bona fide triable issue warranting a trial and that its claim is therefore indefensible. It therefore urges the Court to allow the Notice of Motion in its entirety, together with costs. ***Respondent submissions*** 1. The Respondent submitted that the application does not meet the threshold for either judgment on admission under Order 13, rule 2 or summary judgment under Order 36, rule 1 of the Civil Procedure Rules. It argued that the application is defective for seeking distinct remedies under separate provisions of the Civil Procedure Rules within a single application. 2. On the issue of summary judgment, the Respondent submitted that the suit raises genuine triable issues which can only be resolved through a full trial. Relying on **Dominion Farms Ltd v Diamond Shield International [2014] KECA 179 (KLR),** it argued that summary judgment is only available where there is plainly no defence to a claim. The Respondent contended that its Amended Defence raises substantive issues, including allegations that some of the goods supplied were substandard and that the Applicant’s claim is exaggerated by the inclusion of interest at the rate of 14%, which was not contractually agreed upon. According to the Respondent, these matters require evidentiary interrogation at trial. 3. Regarding judgment on admission, the Respondent submitted that there is no clear, unequivocal, and unconditional admission of liability as required under Order 13, rule 2. Citing **Vehicle and Equipment Leasing Limited v Coca Cola Juices Kenya Limited [2017] eKLR** and related authorities, it argued that the correspondence and post-dated cheques relied upon by the Applicant merely demonstrate the existence of a commercial relationship between the parties and the mode of payment that had been adopted. The Respondent maintained that the issuance of the cheques cannot be construed as an unequivocal admission of the amount claimed, particularly because the cumulative value of the cheques does not correspond with the sum sought in the suit. 4. The Respondent further submitted that its inability to honour the post-dated cheques arose from a fire incident that affected its operations. It pointed to ongoing proceedings relating to its claim for insurance compensation arising from that incident and argued that the effect of the fire on its contractual obligations is a matter requiring further examination by the Court. 5. In conclusion, the Respondent submitted that its defence is not a sham and raises bona fide triable issues concerning the quality and quantity of goods supplied, the applicable interest rate, and the consequences of the fire incident. It therefore urged the Court to dismiss the Application with costs. ***Analysis and Determination*** 1. I have carefully considered the notice of motion application, the affidavits filed by the parties together with their respective annexures, and the written submissions on record. In my view the following issues arise for determination: 2. **Whether the Applicant has met the legal threshold for the entry of summary judgment under Order 36 of the Civil Procedure Rules.** 3. **Whether in the alternative, the Applicant has established a clear, unequivocal and unconditional admission of liability warranting the entry of judgment on admission under Order 13 Rule 2 of the Civil Procedure Rules.** **Whether the Applicant has met the legal threshold for the entry of summary judgment under Order 36 of the Civil Procedure Rules** 1. The Applicant seeks summary judgment on the sum of USD 946,068.63 being the alleged outstanding purchase price for goods supplied to the Respondent between February 2021 and January 2022. Its case is that the Respondent received the goods, acknowledged delivery, was duly invoiced and thereafter issued post-dated cheques equivalent to the outstanding debt amount. According to the Applicant, the Respondent's subsequent request that the cheques should not be banked following a fire at its factory did not negate the indebtedness but merely explained the temporary inability to honour the payment arrangement. The Applicant therefore contends that the Respondent’s defence consists of mere denials which do not disclose any bona fide triable issued. 2. The Respondent opposes the application and submits that the matter does not meet the stringent requirements for summary determination. It argues that both liability and quantum remain disputed and that the suit raises genuine triable issues requiring full hearing. In particular, the Respondent contend that some of the goods supplied were defective and failed to meet the agreed specifications, that the quantities supplied did not correspond with those ordered, and that these complaints were communicated to the Applicant. It further disputes the contractual basis for the interest claimed at the rate of 14% per annum, maintaining that no agreement on interest existed between the parties. The Respondent also submits that the post-dated cheques relied upon by the Applicant do not constitute an admission of the amount claimed and that its inability to honour them arose following a fire that severely disrupted its operations. According to the Respondent, these issues can only be properly resolved through a full trial. 3. The law on summary judgment is settled. The procedure is intended to enable a Plaintiff to obtain judgment expeditiously in cases where the Defendant has no bona fide defence. In ***Job Kilach v Nation Media Group Ltd, Salaba Agencies Ltd & Michael Rono [2015] KECA 846 (KLR)*** the Court of Appeal stated as follows:- **“Before the grant of summary judgment, the court must satisfy itself that there are no triable issues raised by the Defendant, either in his statement of defence or in the affidavit in opposition to the application for summary judgment or in any other manner.** **What then is a defence that raises no bona fide triable issue? A bona fide triable issue is any matter raised by the Defendant that would require further interrogation by the court during a full trial. The Black's Law Dictionary defines the term “triable” as, “subject or liable to judicial examination and trial”. It therefore does not need to be an** **issue that would succeed, but just one that warrants further** **intervention by the Court.”** 1. Similarly, in ***County Government of Trans Nzoia v Manaseh Distributors & Wholesalers Limited (Civil Appeal 10 of 2018) [2024] KEHC 389 (KLR) (29 January 2024) (Judgment)*** held that; “**24. Drawing therefrom, it is the duty of a Court to establish that the application for summary judgment has been made in the clearest of cases. That is to say that, the Defence, which instigates the application, is a sham. The rationale being that if the Defendant is allowed to defend his case with a sham Defence, that would be tantamount to wastage of the limited and precious judicial time. It must thus be plainly obvious that the Defence does not warrant any issue which may call for substantiation in a full hearing. As said, it must be allowed in the clearest of cases**.” 1. I respectfully agree with those principles. Summary judgment is a draconian remedy because it has the effect of depriving a litigant of the opportunity to present its case at trial. Consequently, the jurisdiction must be exercised sparingly and only in the clearest of cases. A Defendant is not required, at this interlocutory stage, to demonstrate that its defence will ultimately succeed. It is sufficient if the material before the court discloses even a single bona fide triable issue deserving hearing by the court. Where such an issue exists, however weak the defence may ultimately appear, the matter ought ordinarily to proceed to trial. 2. Applying those principles to the present case, I am unable to conclude that the Respondent’s defence is a sham. While it is common ground that there existed a commercial relationship between the parties involving the supply of goods, and that the Respondent issued post-dated cheques in favour of the Applicant, the Respondent, has specifically pleaded that the Applicant failed to supply the full quantities ordered, supplied goods that were defective or did not conform to the agreed specifications. The Respondent further contends that, notwithstanding those deficiencies, it was invoiced for the entire quantities ordered. 3. Those allegations are not peripheral, they go to the very foundation of the Applicant claim. Whether the goods supplied met the agreed specifications, whether there was partial delivery, whether the alleged complaints were raised and communicated to the Applicant, and what effect those matters have on the invoices relied upon are all questions that require evidential interrogation. 4. I also find that the Respondent’s challenge to the interest claimed raises a further triable issue. The Applicant seeks interest at the rate of 14% per annum, yet the Respondent disputes the existence of any contractual agreement authorizing such interest. Whether the parties expressly or implied agreed on that rate is a matter that can only be determined upon examination of the contractual documents and the evidence to be adduced at trial. 5. Equally significant is the Respondent's contention that the post-dated cheques relied upon by the Applicant do not amount to an admission of the sum claimed. The Respondent submits that the cheques were issued within the ordinary course of business and that their aggregate value does not correspond with the amount now claimed. Whether the cheques constituted acknowledgment of the entire debt or merely formed part of the parties' payment arrangements is a matter that cannot be conclusively determined within the confines of an application for summary judgment. 6. The Court has also considered the parties' competing positions concerning the fire that allegedly destroyed the Respondent's factory and disrupted its operations. The Respondent has linked that incident to its inability to honour the post-dated cheques and has referred to ongoing disputes relating to insurance compensation arising from the loss. Whether those circumstances have any legal effect on the parties' respective obligations is a matter requiring a fuller evidentiary inquiry than is presently possible. 7. It is not the function of the Court at this stage to determine the merits of the competing positions or to decide which party is likely to succeed at trial. The Court's task is merely to determine whether the Respondent has demonstrated the existence of bona fide triable issues. In my view, the disputes relating to the quality and quantity of goods supplied, the basis of the interest claimed, the legal significance of the post-dated cheques and the consequences of the fire incident are neither frivolous nor illusory. They are matters requiring adjudication at a full hearing. 8. Consequently, I am not persuaded that this is one of those plain and obvious cases contemplated under Order 36 of the Civil Procedure Rules. The Respondent has demonstrated the existence of bona fide triable issues that warrant investigation at trial. The Applicant has therefore failed to satisfy the threshold for the entry of summary judgment. **Whether the Applicant has established a clear, unequivocal and unconditional admission of liability warranting the entry of judgment on admission** 1. In the alternatively the Applicant seeks judgment on admission pursuant to Order 13, rule 2 of the Civil Procedure Rules. Its case is that, regardless of whether the matter satisfies the threshold for summary judgment, the Respondent has expressly and unequivocally admitted the debt. The Applicant relies on the post-dated cheques issued by the Respondent, the statement of account and the correspondence exchanged between the parties. It argues that the Respondent has never denied issuing the cheques or that they related to the outstanding invoices. Instead, the Respondent merely requested that the cheques should not be banked pending recovery from the effects of the fire which affected its factory operations. According to the Applicant, that conduct amounts to a clear acknowledgement of indebtedness and leaves no room for doubt as to the Respondent’s liability. 2. The Applicant further submits that the Respondent's correspondence and the pleadings filed in High Court Commercial Case No. E230 of 2024, demonstrates that the Respondent was experiencing financial difficulties arising from the fire and was seeking time to regularize its obligations. In the Applicant's view, the explanation advanced for the non-payment of the debt does not detract from the fact of the debt itself and therefore constitutes sufficient admission for purposes of Order 13, rule 2. 3. The Respondent takes a contrary position. It submits that there is no admission, express or implied, capable of sustaining judgment on admission. The Respondent argues that the post-dated cheques cannot be viewed in isolation from the broader contractual relationship between the parties. It maintains that disputes had arisen concerning the quality and quantity of goods supplied, that the parties' accounts had not been reconciled, and that the amount claimed by the Applicant remains contested. It further contends that the aggregate value of the post-dated cheques does not correspond with the sum claimed in the suit and that the cheques merely formed part of the parties' commercial arrangements rather than an unequivocal acknowledgment of liability. The Respondent also points to its Amended Defence, in which liability is expressly denied and the claimed interest challenged. 4. For a court to enter judgment on admission, the admission must be plain, obvious, unconditional and unequivocal. Where the alleged admission is capable of more than one interpretation, requires explanation, or must be considered alongside disputed facts, the court ought to exercise caution and decline to enter judgment summarily. 5. Having considered the material placed before the Court, I accept that the documents relied upon by the Applicant may ultimately constitute significant evidence in support of its claim. The issuance of post-dated cheques, the request that they should not be presented for payment, and the correspondence exchanged between the parties are matters that may properly be relied upon at the trial in support of the Applicant's case. Indeed, those documents may lend considerable weight to the Applicant's contention that monies were owed by the Respondent. 6. However, the question before the Court at this stage is not whether the documents constitute evidence of indebtedness, but whether they amount to an admission that is so clear, unequivocal and unconditional as to justify the entry of judgment without a trial. In my view, they do not. 7. The Respondent has consistently maintained, both in its Replying Affidavit and in its Amended Statement of Defence, that the amount claimed is disputed on account of alleged deficiencies in the Applicant's performance of the underlying contract. Specifically, the Respondent contends that some of the goods supplied were defective, that the quantities delivered did not correspond with those ordered, and that the Applicant nevertheless invoiced it for the full quantities allegedly supplied. The Respondent also disputes the contractual foundation of the interest claimed. Whether those allegations are ultimately sustainable is a matter for trial. Their existence, however, renders it impossible for this Court to conclude that liability has been admitted in the clear and unconditional terms contemplated under Order 13 Rule 2. 8. In the end, while the material relied upon by the Applicant may constitute evidence capable of supporting its claim at trial, it falls short of establishing the kind of plain, obvious and unconditional admission that would justify the entry of judgment under Order 13 Rule 2 of the Civil Procedure Rules. The alleged admissions are inextricably intertwined with contested issues regarding contractual performance, the amount allegedly due, and the parties' respective obligations. Those issues can only be properly resolved upon a full hearing. 9. Accordingly, I am not satisfied that the Applicant has demonstrated a clear, unequivocal and unconditional admission of liability on the part of the Respondent. The alternative prayer for judgment on admission therefore fails. 10. The upshot is that the Notice of Motion dated **12th May, 2025,** is without merit and is hereby **dismissed. Costs shall be in the cause.** 11. Orders accordingly. ***Delivered, Dated and Signed virtually this 6th day of August, 2026*** **RHODA RUTTO** **JUDGE** **Court Assistant: Wabwire**