Kingsway Tyres Limited v Fair Logistics Agency Limited & 2 others (Commercial Case E447 of 2026) [2026] SCC 149 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Existence of a valid credit contract with the 1st Respondent
The Credit Facility Application evidenced a valid contract with 3% monthly interest, and the 1st Respondent filed no rebuttal
The court perused the Credit Facility Application dated 7th April 2025, in which the 1st Respondent sought Kshs. 504,000 payable within 45 days at 3% monthly interest. As the 1st Respondent neither entered appearance nor filed a response, there was no evidence in rebuttal. Applying the elements of offer, acceptance and consideration, the court found a valid contract and declined to rewrite the agreed interest term as unconscionable absent fraud, undue influence or mistake.
Enforceability of the directors' guarantee
The letter of guarantee dated 18th July 2025 is a valid and binding agreement on the 2nd and 3rd Respondents
The Claimant filed a letter of guarantee dated 18th July 2025 in which the 2nd and 3rd Respondents acknowledged being directors and guarantors of the 1st Respondent, committing to repay irrevocably and unconditionally by instalments to be completed by 12th September 2025. The guarantee was signed by all parties and witnessed. The court applied the contract elements and found the letter a valid, binding agreement unchallenged by contrary evidence.
Entitlement to reliefs and the agreed interest rate
The Claimant proved its claim on a balance of probabilities; judgment for Kshs. 574,600.01 plus interest from July 2025 at court rates
On the evidence the Claimant proved its case on a balance of probabilities against the Respondents and was entitled to remedies for breach of contract. The court noted that interest terms are enforceable only where there is clear evidence of agreement at the outset, citing Morjaria v Patel, and found the 3% monthly rate agreed and not unconscionable.
Legal principles established
#- The essential elements of a valid contract are offer, acceptance and consideration; where a credit facility application and guarantee satisfy these, they are binding and the court will not rewrite an agreed interest term absent fraud, undue influence or mistake
Court orders
#- 1.Judgment entered in favor of the Claimant against the Respondent jointly and severally for Kshs. 574,600.01/-
- 2.Interest on the decretal sum from July 2025 at court rates
- 3.No orders as to costs
- Jurisdiction invoked
- Small Claims Court Act, Section 30 election (proceedings on documents)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kingsway Tyres Limited v Fair Logistics Agency Limited & 2 others (Commercial Case E447 of 2026) [2026] SCC 149 (KLR)", Case Analysis (2026). Statement of Claim dated 12th May 2026. Source: https://new.kenyalaw.org/akn/ke/judgment/scc/2026/149/eng@2026-07-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.