Ikanda v Iwaki Trading Limited & another (Civil Suit E265 of 2025) [2026] KEMC 718 (KLR)
The bottom line
#A Bungoma court taxed a plaintiff's costs at Kshs 82,035, ruling that VAT cannot be added to party-and-party costs unless a taxable supply between the parties is proven.
What this practically means
#Executive summary
#Key legal issues
#Assessment of instruction fees on formal proof
Instruction fees fixed at 65% of the Kshs. 65,000/= formal-proof scale, i.e. Kshs. 42,250/=.
The value of the subject matter was Kshs. 948,400/=. Because the matter proceeded by formal proof rather than full trial, Schedule 7(1)(a) of the ARO applies, permitting 65% of the item 1(a) lower-scale fee of Kshs. 65,000/=, yielding Kshs. 42,250/= for item 1.
Award of VAT in a Party and Party Bill of Costs
VAT assessed off; not awardable absent proof of a taxable supply between the parties.
Relying on Pyramid Motors Ltd v Langata Gardens Ltd, as followed in Kenya Commercial Bank Ltd v Stagecoach Management Ltd, the court held that Party and Party costs are due to the litigant, not the advocate, so there is no taxable supply of legal services between the parties. VAT can only be awarded in an Advocate-Client Bill or where evidence shows the litigant paid VAT.
Service, filing and attendance items
Service items taxed at Kshs. 2,000/= each per Schedule 7(10)(i); filing fees and attendance taxed off.
Items 7-12 involved service at Kimwanga, a few kilometres from Bungoma. Guided by Schedule 7(10)(i) of the ARO and the short distance, each item was assessed at Kshs. 2,000/=. Item 2 failed for want of proof and item 23 because counsel did not attend court on that occasion.
Legal principles established
#- VAT cannot be awarded in a Party and Party Bill of Costs unless a party proves it supplied taxable goods and services to the other party; the fact that a law firm pays VAT does not entitle the litigant to VAT.
- Where a matter proceeds by way of formal proof, instruction fees under Schedule 7(1)(a) of the ARO are 65% of the item 1(a) lower scale fee of Kshs. 65,000/=.
Court orders
#- 1.Items 1, 3-6, 13-22 and 24-29 assessed as drawn (drawn to scale)
- 2.Item 1 (instruction fees) assessed at Kshs. 42,250/= being 65% of Kshs. 65,000/= under Schedule 7(1)(a) of the ARO
- 3.Item B on VAT assessed off
- 4.Items 7-12 (service between Bungoma and Kimwanga) assessed at Kshs. 2,000/= each
- 5.Item 2 (filing fees) assessed off for want of proof
- 6.Item 23 (attendance) assessed off as Plaintiff's counsel did not attend court
- 7.The Plaintiff's Party and Party Bill of Costs dated 09th May 2026 assessed at Kshs. 82,035/=
- Jurisdiction invoked
- Advocates (Remuneration) Order - taxation of a Party and Party Bill of Costs
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ikanda v Iwaki Trading Limited & another (Civil Suit E265 of 2025) [2026] KEMC 718 (KLR)", Case Analysis (2026). Not stated in the ruling. Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2026/718/eng@2026-08-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.