' Background and introduction
1. I have considered the application dated 9th June 2025, seeking leave to institute a suit against the respondent in the Chief Magistrates Court at Bungoma. The application is supported by the affidavit of Joyce Omalla, which I have equally reviewed. Although the respondent was served and afforded an opportunity to respond, no replying affidavit or grounds of opposition were filed. Nonetheless, the absence of opposition does not automatically entitle the applicant to the orders sought. The Court must still be satisfied that the applicant has met the evidentiary and legal threshold required for the grant of leave.
Analysis and Determination
2. The application arises from a Staff Loan Agreement executed between the applicant and the respondent, under which the respondent was advanced a loan facility. The applicant now seeks to recover alleged outstanding arrears amounting to KES 2,113,392.35. Clause 14 of the Staff Loan Agreement stipulates:
This agreement shall be governed by and construed in accordance with the laws of Kenya and any legal actions or proceedings arising out of or in connection with this Agreement shall be brought in the High Court of Kenya, Commercial Division.
3. This clause forms the basis of the applicant’s request for leave to file the suit in a different forum, namely the Chief Magistrates Court. The applicant invokes Section 18 of the Civil Procedure Act, which empowers this Court to withdraw and transfer suits to subordinate courts where appropriate.
4. It is undisputed that the Chief Magistrates Court has jurisdiction to hear and determine claims not exceeding KES 20,000,000.00, pursuant to Section 7(1) of the Magistrates’ Courts Act. The applicant’s claim of KES 2,113,392.35 falls well within this pecuniary threshold. Furthermore, Section 11 of the Civil Procedure Act provides that suits should be instituted in the court of lowest competent jurisdiction. This principle is intended to promote judicial efficiency and optimal utilization of resources.
5. Upon examining the plaint annexed to the application, it is evident that the cause of action arose in Nairobi. The applicant’s registered office is located in Nairobi, and the loan agreement confirms that the respondent was employed and domiciled in Nairobi at the material time. No compelling reason has been advanced to justify the transfer of the matter to Bungoma. On the contrary, Nairobi emerges as the most convenient and appropriate forum for the trial of this suit.
6. I should note that while Clause 14 of the agreement designates the High Court Commercial Division as the forum for dispute resolution, it is worth noting that the High Court, sitting at any station, is competent to hear commercial disputes. Moreover, parties may, by consent or through judicial intervention, proceed before a subordinate court where jurisdiction exists. To avoid future procedural hurdles and unnecessary expense, parties may consider amending the dispute resolution clause to reflect a more flexible forum selection.
Disposition
7. In light of the foregoing analysis, the application dated 9th June 2025 is hereby allowed on the following terms:
i. Leave is granted to the applicant to file suit against the respondent in the Chief Magistrates Court at Nairobi.
ii. Costs of the application shall be in the cause.
'
1. I have considered the application dated 9th June 2025, seeking leave to institute a suit against the respondent in the Chief Magistrates Court at Bungoma. The application is supported by the affidavit of Joyce Omalla, which I have equally reviewed. Although the respondent was served and afforded an opportunity to respond, no replying affidavit or grounds of opposition were filed. Nonetheless, the absence of opposition does not automatically entitle the applicant to the orders sought. The Court must still be satisfied that the applicant has met the evidentiary and legal threshold required for the grant of leave.
Analysis and Determination
2. The application arises from a Staff Loan Agreement executed between the applicant and the respondent, under which the respondent was advanced a loan facility. The applicant now seeks to recover alleged outstanding arrears amounting to KES 2,113,392.35. Clause 14 of the Staff Loan Agreement stipulates:
This agreement shall be governed by and construed in accordance with the laws of Kenya and any legal actions or proceedings arising out of or in connection with this Agreement shall be brought in the High Court of Kenya, Commercial Division.
3. This clause forms the basis of the applicant’s request for leave to file the suit in a different forum, namely the Chief Magistrates Court. The applicant invokes Section 18 of the Civil Procedure Act, which empowers this Court to withdraw and transfer suits to subordinate courts where appropriate.
4. It is undisputed that the Chief Magistrates Court has jurisdiction to hear and determine claims not exceeding KES 20,000,000.00, pursuant to Section 7(1) of the Magistrates’ Courts Act. The applicant’s claim of KES 2,113,392.35 falls well within this pecuniary threshold. Furthermore, Section 11 of the Civil Procedure Act provides that suits should be instituted in the court of lowest competent jurisdiction. This principle is intended to promote judicial efficiency and optimal utilization of resources.
5. Upon examining the plaint annexed to the application, it is evident that the cause of action arose in Nairobi. The applicant’s registered office is located in Nairobi, and the loan agreement confirms that the respondent was employed and domiciled in Nairobi at the material time. No compelling reason has been advanced to justify the transfer of the matter to Bungoma. On the contrary, Nairobi emerges as the most convenient and appropriate forum for the trial of this suit.
6. I should note that while Clause 14 of the agreement designates the High Court Commercial Division as the forum for dispute resolution, it is worth noting that the High Court, sitting at any station, is competent to hear commercial disputes. Moreover, parties may, by consent or through judicial intervention, proceed before a subordinate court where jurisdiction exists. To avoid future procedural hurdles and unnecessary expense, parties may consider amending the dispute resolution clause to reflect a more flexible forum selection.
Disposition
7. In light of the foregoing analysis, the application dated 9th June 2025 is hereby allowed on the following terms:
i. Leave is granted to the applicant to file suit against the respondent in the Chief Magistrates Court at Nairobi.
ii. Costs of the application shall be in the cause.
'