Shree Ghanshyam Hardware Limited v Mexiume Limited (Commercial Case E8822 of 2024) [2026] SCC 23 (KLR)
The bottom line
#A Nairobi Small Claims Court awarded an unpaid supplier the debt owed but threw out a 5% monthly interest charge as excessive and unagreed.
What this practically means
#Executive summary
#Key legal issues
#Whether the claimant proved an outstanding debt of Kshs. 119,100/= on a balance of probabilities
The claimant proved the outstanding balance; the respondent's defence of defective and returned goods was unsupported by any evidence of complaints, non-acceptance or failed repairs, and credit notes had already recalled the invoices for genuinely defective machines
The claimant produced invoices and a statement showing a balance of Kshs. 119,100/=. The respondent alleged goods were defective and returned but produced no evidence of communication of complaints or non-acceptance. The claimant showed credit notes 126, 142, 173 and 316 recalling invoices for the defective machines. The defence that invoices 9899, 10159, 10041 and 10281 were for faulty unrepaired goods failed as unsupported.
Whether the 5% monthly interest on late payment provided in the invoices was chargeable
Interest cannot be imposed merely through invoices; it binds only by agreement express or implied. Although the respondent's conduct implied consent to the invoice terms, the 5% monthly rate (60% per annum) was excessive, and the court exercised its discretion under Section 26 of the CPA to award only interest at court rate
The court held that an invoice merely proves a contractual relationship and does not create a contract. Nothing proved prior acceptance of the 5% rate, which was unilaterally introduced. Though settling invoices without protest amounted to implied consent, the rate was inordinately high, so the court awarded reasonable interest at court rate instead.
Legal principles established
#- Interest cannot be imposed merely through invoices; an invoice does not create a contract and interest binds parties only by agreement express or implied
- Failure to object to interest introduced through invoices, and payment of earlier invoices on the same terms, amounts to acceptance of the interest clause
- The burden of proving payment or non-acceptance of invoiced goods shifts to the respondent once duly raised invoices are produced
Court orders
#- 1.Judgment entered in favour of the claimant as against the respondent for the sum of Kshs. 119,100/=, attracting interest at court rate from the date of filing till the date of judgment
- 2.The total sum 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/=
- 4.The respondent is granted a 30-days stay of execution
- Jurisdiction invoked
- Section 30 of The Small Claims Court Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Shree Ghanshyam Hardware Limited v Mexiume Limited (Commercial Case E8822 of 2024) [2026] SCC 23 (KLR)", Case Analysis (2026). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/scc/2026/23/eng@2026-05-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.