Obobo v Omar t/a Adab Nafuu Traders Ltd (Commercial Case E030 of 2026) [2026] SCC 33 (KLR)
The bottom line
#A Kensalt employee's Kshs. 310,301 debt claim failed because only the company itself could sue, and the defendant company was wrongly sued through a director.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the claimant has locus standi to institute the claim
- 2.Whether the claim is meritorious
- 3.Who bears the costs of the claim
Key legal issues
#Whether the claimant, an employee of Kensalt Limited, has locus standi to claim payment for goods supplied by the company
The claimant lacks locus standi; the proper plaintiff is Kensalt Limited itself, and the suit is incompetent
The invoice and customer acknowledgement showed the engagement was between Kensalt Limited and Mansoor General Supplies Ltd. Relying on Salomon v Salomon and the rule in Foss v Harbottle as restated by the Court of Appeal in Amin Akberali Manji, the court held that a wrong done to a company must be vindicated by the company alone. An employment contract clause making employees personally liable for unpaid goods could not confer standing on the employee to sue in his own name.
Whether the respondent, a registered limited liability company, was properly sued through one of its directors in his personal capacity
The respondent was improperly sued; a registered company must be sued in its own name
A CR 12 produced in evidence showed Adab Nafuu Traders Limited is a registered company capable of suing and being sued in its own name. The court held it was an error to sue one of its directors personally, in line with the principle of separate corporate personality.
Who bears the costs of the claim
Costs awarded to the successful respondent
Having successfully defended the claim, the respondent was awarded costs as the prevailing party.
Legal principles established
#- A company is a separate legal entity distinct from its directors and shareholders, and only the company itself may sue for wrongs done to it (rule in Foss v Harbottle)
- Locus standi is the right to appear and be heard in court; without it even a meritorious case cannot be sustained
- A party cannot enforce contractual rights or obligations to which it is not a party (privity of contract)
- An agent suing on behalf of a company requires written authority to plead and execute documents in its name
Court orders
#- 1.The claim contained in the statement of claim dated 31st March 2026 is wholly incompetent for reasons set out in the judgment and the same is dismissed
- 2.The respondent is awarded costs of the claim
- 3.The file is closed
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Small Claims Court Act (first-instance claim for Kshs. 310,301 being value of goods supplied)
Relief refused
#Payment of Kshs. 310,301 being the value of goods allegedly supplied to the respondent
The claimant, an employee of Kensalt Limited, had no locus standi to sue on behalf of the company, and the respondent was improperly sued through a director instead of the registered company
Costs
The respondent having defended the claim and having been successful in his quest, he is awarded costs of the claim.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The claim contained in the statement of claim dated 31st March 2026 is wholly incompetent for reasons set out in the judgment and the same is dismissed.
The respondent having defended the claim and having been successful in his quest, he is awarded costs of the claim.
It is a fundamental principle of our law that a company is a legal person with its own corporate identity, separate from the directors or shareholders and with its own property rights and interests to which alone it is entitled.
locus standi means the right to appear before and be heard in a court of law. Without it, even when a party has a meritorious case, he cannot be heard because of that.
Adab Nafuu ought to have been sued in its own name and not one of the directors.
Issues in the judgment
#The judgment is internally inconsistent as to the identity of the contracting parties, first describing the contract as one between Kensalt Limited and Mansoor General Supplies Ltd, then stating it was between Kensalt and the respondent
The case number of this matter is not stated in the judgment; only the related matter VOI SCOM E028 OF 2026 is identified, and that related matter is dated 2026 while the invoice in evidence is dated 22/11/2025
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Obobo v Omar t/a Adab Nafuu Traders Ltd (Commercial Case E030 of 2026) [2026] SCC 33 (KLR)", Case Analysis (2026). VOI SCOM E0XX of 2026 (related to VOI SCOM E028 OF 2026). Source: https://new.kenyalaw.org/akn/ke/judgment/scc/2026/33/eng@2026-05-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.