Diversity Microcredit Limited v Gachau (Commercial Case 749 of 2025) [2026] SCC 37 (KLR) (28 April 2026) (Judgment) Neutral citation: [2026] SCC 37 (KLR) REPUBLIC OF KENYA IN THE SMALL CLAIMS COURT AT KIAMBU COMMERCIAL CASE 749 OF 2025 JM MWENDA, RM APRIL 28, 2026 BETWEEN DIVERSITY MICROCREDIT LIMITED ............................................... CLAIMANT AND NANCY WAIRIMU GACHAU ........................................................... RESPONDENT JUDGMENT A. Introduction. 1. This is a dispute arising from a loan agreement between the parties herein. B. The Claim. 2. The Claimant, vide a Statement of Claim dated 8th October, 2025, seeks judgment against the Respondent in the sum of Kshs. 559,645.36/= together with costs of the claim and such other reliefs as this Court may deem fit to grant. C.response. 3. The Respondent filed a response denying the claim. It is the Respondent’s position that the Claimant repossessed the security and proceeded to sell it in order to recover the outstanding loan. On the other hand, the Claimant contends that the proceeds from the sale of the security were insuficient to ofiset the loan, hence the present claim. D.issue for Determination. 4. Before delving into the merits of the claim, this Court must first determine whether it has jurisdiction to entertain the dispute. https://new.kenyalaw.org/akn/ke/judgment/scc/2026/37/eng@2026-04-28 1
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E.Analysis. 5. The jurisdiction of the Small Claims Court is provided for under Section 12 of the Small Claims Court Act, 2016. The said provision outlines the nature of disputes that this Court is competent to determine. 6. The present claim, though framed as a recovery of a monetary sum, arises from the Claimant’s exercise of its statutory power of sale, or more precisely, the realization of a security. 7. Determination of such a dispute would inevitably require this Court to interrogate issues relating to: a. The validity and propriety of the repossession; b. The legality of the sale process; c. Whether the security was sold in compliance with the law; d. Whether the price obtained was reasonable. 8. These are not merely incidental questions. They go to the root of the exercise of statutory power and involve consideration of legal principles governing realization of securities. 9. In the view of this Court, such matters transcend the limited and specific jurisdiction conferred upon this Court under Section 12 of the Small Claims Court Act. This Court would be required to delve into complex questions of law and fact relating to the realization of security, which fall outside its purview. F.Determination. 10. It is therefore the finding of this Court that this matter does not fall within the jurisdiction of the Small Claims Court as contemplated under Section 12 of the Act. G.Disposition. 11. Consequently, this claim is hereby struck out for want of jurisdiction. There shall be no orders as to costs. DATED,SIGNED AND DELIVERED VIRTUALLY AT THIKA THIS 28TH DAY OF APRIL, 2026 HON. JAMLICK MURIITHI MWENDA https://new.kenyalaw.org/akn/ke/judgment/scc/2026/37/eng@2026-04-28 2
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