Verodah Freighters and Logistics Company Limited v Shiven Development Limited & another (Civil Case E5841 of 2025) [2026] SCC 180 (KLR)
The bottom line
#A Kenyan Small Claims Court held an employee who collected payments using his employer's customs licence must repay Kshs 254,736 because employees with authority act as agents who must account.
What this practically means
#Executive summary
#Key legal issues
#Existence of a contract between Claimant and Respondent
No contract existed between the Claimant and the Respondent; all dealings, invoices and payments were channelled through the Third Party
The burden rested on the Claimant to prove a contractual relationship on a balance of probabilities. He adduced no evidence of a contract with the Respondent. The Respondent denied dealings with the Claimant, and the Third Party corroborated that the Claimant and Respondent never interacted.
Relationship between the Claimant and the Third Party
An employer-employee relationship existed between the Claimant and the Third Party, and the Third Party also acted as the Claimant's agent
The employment letter dated 13th February 2021, PAYE returns, ICMS credentials and Mpesa payments supported the employment relationship. The Third Party adduced no contrary evidence. He used the Claimant's licence and credentials with the Claimant's authority, and his duties placed him in charge of the Namanga border station, establishing agency.
Breach by the Third Party
The Third Party breached his fiduciary duty to account by collecting payments from the Respondent and retaining them without remitting to the Claimant
The Third Party conceded he was paid in full by the Respondent. As agent, he had a strict duty to account for monies received. His failure to account for and remit the sums collected using the Claimant's licence constituted a clear breach, guided by the Hubaal Travel authority.
Applicable rate for computation of the award
The applicable rate is Kshs. 1,800/= per entry, yielding a total of Kshs. 254,736/= inclusive of 16% VAT for 122 entries
The KIFWA guidelines of Kshs. 7,000/= per entry took effect on 1st December 2023 and cannot apply retrospectively to 2022 transactions. The Third Party's claim of an agreed rate of Kshs. 500/= per entry was unsupported by evidence and undermined by his own conduct of charging Kshs. 1,800/= per entry. The 122 entries were the unpaid subset of fully paid transactions.
Legal principles established
#- An employee acts as the employer's agent, binding the employer, when acting within the scope of employment with express, implied or apparent authority
- An agent is under a strict fiduciary duty to account to the principal for all money received in the course of discharging his duty
- Breach of contract requires proof of the existence of a contract and failure to perform a term of the contract
- Minimum pricing guidelines issued after the transactions in question cannot apply retrospectively
Court orders
#- 1.Judgment be and is hereby entered in favour of the Claimant against the Third Party in the sum of Kshs. 254,736/=
- 2.The Third party shall pay costs of Kshs 25,000/= to the Claimant and Kshs. 30,000/= to the Respondent
- 3.Interest on the decretal sum from the date of filing until payment in full
- 4.Stay of execution for 30 days
- 5.Right of appeal be exercised within 30 days
- 6.Let the file be closed forthwith
- Jurisdiction invoked
- Small Claims Court Act (inferred from the court's designation as Small Claims Court; no specific provision cited)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Verodah Freighters and Logistics Company Limited v Shiven Development Limited & another (Civil Case E5841 of 2025) [2026] SCC 180 (KLR)", Case Analysis (2026). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/scc/2026/180/eng@2026-05-25
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.