1. Commercial litigation frequently requires Courts to navigate a delicate procedural tension. The Court must aggressively eliminate sham defences to prevent the abuse of the judicial process. Simultaneously, the Court must fiercely protect a litigant's constitutional right to a full trial where genuine disputes exist. This ruling resolves that tension in respect of an interlocutory application.
Background Facts
2. The background facts regarding the initial financial transactions are largely uncontested. The Plaintiff, KenGen Foundation, is a registered Trust. The Defendant, Stima Investment Cooperative Society, is a registered cooperative society.
3. In the years 2015 and 2016, the Plaintiff invested portions of its endowment funds into the Defendant's fixed deposit real estate fund. The investments were disbursed in two tranches of Kshs.50,000,000/= each.
4. The commercial relationship deteriorated when the investments matured. The Plaintiff contends that the parties explicitly agreed to consolidate the two sums. The Plaintiff avers that a unified interest rate of 16.3% per annum was to apply on a continuous rollover basis. The Defendant made a single repayment of Kshs. 10,000,000 on 30th September, 2021.
5. The Plaintiff claims an outstanding balance of Kshs. 363,038,070.79 as at 30th September, 2024. The Defendant filed an Amended Statement of Defence dated 29th April, 2025. The Defendant firmly denies the consolidation agreement. The Defendant explicitly rejects the applicability of the 16.3% interest rate. The Defendant, however, admits that the outstanding principal amount owed is Kshs. 90,000,000.
6. The Plaintiff subsequently filed a Notice of Motion application dated 3rd June, 2025. The application is brought under Section 3A of the Civil Procedure Act, Order 2 Rule 15, Order 13 Rule 2, and Order 51 of the Civil Procedure Rules.
7. The application seeks four specific orders as follows:
(i) This Honourable Court be pleased to strike out the Defendant's Amended Statement of Defence dated 29th April, 2025.
(ii) This Honourable Court be pleased to enter judgement on admission against the Defendant.
(iii) This Honourable Court be pleased to enter judgement against the Defendant as prayed in the Plaint dated 17th October, 2024.
(iv) The cost of this Application be borne by the Defendant.
8. The application is supported by the Affidavit and Supplementary Affidavit of Anthony Waithaka Igecha. The Plaintiff grounds the application on the core premise that the Amended Statement of Defence is a sham. The Plaintiff argues that the Defendant's explicit admission of Kshs. 90,000,000 extinguishes any triable issue regarding the principal sum.
9. The Plaintiff further asserts that documentary evidence conclusively proves the agreed 16.3% interest rate. The Plaintiff relies heavily on correspondence authored by the Defendant. A letter dated 15th February, 2016, acknowledges the investment terms. A subsequent letter dated 20th September, 2017, explicitly confirms the interest rate at 16.3% per annum.
10. In its written submissions, the Plaintiff relies on the locus classicus of D.T. Dobie & Company (Kenya) Limited v Joseph Mbaria Muchina & another [1980] KECA 3 (KLR). The Plaintiff emphasizes the holding that a suit should be summarily dismissed if it is hopelessly weak and discloses no reasonable defence.
11. The Plaintiff further cites Mpaka Road Development Limited v Kana (2004) 1 E.A. 124, and Peter Paul Muthoka v Francis Kibiba Lelo [2012] KEHC 2080 (KLR). The Plaintiff argues that the mere denials in the Amended Statement of Defence are frivolous and vexatious. The Plaintiff also cites Jubilee Insurance Company Limited v Daniel Maingi Muchiri [2015] KEHC 3703 (KLR) to urge the Court to strike out evasive general traverses.
12. The Defendant vigorously opposes the application. The opposition is anchored on a Replying Affidavit sworn by Damaris Mutile on 11th September, 2025, and accompanying written submissions. The Defendant asserts that the Amended Statement of Defence raises bona fide triable issues.
13. The Defendant argues that the interest rate of 16.3% and the alleged consolidation of the sums are hotly contested factual matters. The Defendant contends these matters require viva voce evidence and cross-examination. The Defendant maintains that the Kshs. 90,000,000 admission was merely part of an unconsummated settlement proposal involving nineteen residential units at the Stima Heights project.
14. The Defendant submits that striking out pleadings is a draconian measure. The Defendant cites Ramji Megji Gudka Ltd v Alfred Morfat Omundi Michira & 2 others [2005] eKLR. The Defendant relies on the holding that the power to strike out pleadings must be sparingly exercised and reserved only for the clearest of cases.
15. The Defendant further cites Libera Impex Limited v Libera Executive Limited [2026] KEHC 837 (KLR). The Defendant argues that the Court must act with extreme caution and sustain a suit where a triable issue exists, regardless of the perceived weakness of the defence.
Issues for Determination
16. The pleadings, the interlocutory application, the affidavits on record, and the rival written submissions have been carefully evaluated. The Court has equally considered the oral highlights of the submissions by Counsel on record. The Court frames two (2) distinct issues for determination.
(i) Whether the Court should enter judgment on admission.
(ii) Whether the Amended Statement of Defence ought to be struck out in its entirety.
Analysis
17. This Court has taken note of the position that whether to enter judgment on admission or to strike out the Statement of defence, all call for the exercise of the Court’s discretion. It is a discretion that is to be exercised judicially and not capriciously. The Court now turns to answering the issues as framed.
(i) Whether the Court should enter judgment on admission.
18. The first issue concerns the prayer for judgment on admission. Order 13 Rule 2 of the Civil Procedure Rules grants the Court jurisdiction to enter judgment where admissions of fact have been made. Such admissions may appear on the face of the pleadings or otherwise. The jurisprudence demands that an admission must be plain, clear, and unequivocal to warrant summary judgment.
19. An examination of the Defendant's Amended Statement of Defence dated 29th April, 2025, is necessary. Paragraph 9 explicitly states that the proposed settlement offer would have settled the outstanding amount of Kshs. 90,000,000. Paragraph 14 goes further, stating in no uncertain terms:
"Further the only outstanding amount owed to the plaintiff is Kshs. 90,000,000 (Ninety Million shillings and the Defendant had offered a settlement proposal".
20. This constitutes a deliberate, unequivocal, and unconditional admission of liability to the tune of Kshs. 90,000,000. An admission of a debt cannot be articulated with greater clarity. A Defendant cannot unequivocally admit to owing a specific sum in its substantive pleadings and simultaneously attempt to hide behind a general traverse to delay judgment.
21. The Plaintiff's submissions correctly identify this admission.
22. The Court of Appeal in Choitram & another v Nazari [1984] KECA 47 (KLR) laid down the definitive test for the application of Order 13 Rule 2. The appellate Court held that admissions of fact need not be exclusively on the pleadings; they may be in correspondence or documents. The Court established that judgment on admission must be entered where the admission of liability is clear and unequivocal, leaving no room for copious interpretation.
23. This position is further cemented by the decision in Cassam & another v Sachania & another [1982] KECA 1 (KLR). The Court held that the discretion to grant judgment on admission is exercised in plain cases where the facts amount to a clear admission of liability entitling the plaintiff to judgment. Furthermore, in Guardian Bank Limited v Jambo Biscuits Kenya Limited [2014] KEHC 1796 (KLR) it was held that the admission must be very clear and unequivocal on a plain perusal.
24. Applying these principles, the Defendant has plainly admitted the principal sum of Kshs. 90,000,000. The Plaintiff is therefore legally entitled to judgment on admission for this specific sum. The Court need not wait for the determination of any other question between the parties to grant this relief.
(ii) Whether the Amended Statement of Defence ought to be struck out in its entirety.
25. The second issue concerns the prayer for striking out the Amended Statement of Defence. The Plaintiff seeks to strike out the entire defence and obtain immediate judgment for the total pleaded sum of Kshs. 363,038,070.79.
26. The law governing the striking out of pleadings under Order 2 Rule 15 is well settled. It is a draconian and summary power. The power is exercised only in the clearest of cases. A pleading will only be struck out if it is hopelessly bad, frivolous, vexatious, or constitutes a blatant abuse of the Court process.
27. The seminal authority remains DT Dobie & Company (Kenya) Ltd v Muchina & another [1980] KECA 3 (KLR). The Court of Appeal cautioned that no suit ought to be summarily dismissed unless it is so weak as to be beyond redemption and incurable by amendment. A Court of justice should aim at sustaining a suit rather than terminating it summarily, effectively driving a litigant from the judgment seat without a hearing.
28. The Plaintiff argues that the pre-suit correspondence exposes the defence as a sham. Specifically, the letter dated 15th February, 2016, and the letter dated 20th September, 2017, show the Defendant acknowledging the 16.3% interest rate. The Plaintiff contends that the denial of the interest agreement in paragraph 4 of the Amended Statement of Defence is demonstrably false and vexatious.
29. A critical examination of the record reveals a profound dispute regarding the computation of the interest claimed. The original principal sum was Kshs. 100,000,000. The Plaintiff's claim has ballooned to Kshs. 363,038,070.79. This exponential growth is attributed to compound, rollover interest applied continuously over several years.
30. The Defendant firmly denies the specific agreement to roll over the interest in the manner pleaded by the Plaintiff. The Defendant contests the mechanics of the interest computation. The Defendant also raises the issue of previous settlement negotiations, internal audits, and severe liquidity challenges that disrupted the expected repayment structure.
31. The documentary evidence undeniably shows that the 16.3% rate was mentioned in the historical correspondence. However, the exact contractual mechanics of the interest computation are not expressly admitted. The legality of the unilateral compound rollover over seven years, and the precise mathematical quantum of the remaining balance, constitute factual controversies.
32. The Court must heed the strict caution sounded by the appellate Courts. Even if a defence appears weak or highly unlikely to succeed, it must not be struck out if it raises a single triable issue. A triable issue is one that requires the rigorous testing of evidence through a full trial.
33. The dispute over the Kshs. 273,038,070.79 interest component requires the adduction of oral evidence. The Court must forensically examine the specific investment terms. The scope and validity of the rollover agreements must be tested. The parties' conduct over the seven-year period must be subjected to the crucible of cross-examination.
34. These substantive issues cannot be resolved summarily on conflicting affidavit evidence alone. The Court cannot and will not conduct a mini-trial at an interlocutory stage. To strike out the entire defence would unlawfully deprive the Defendant of its constitutional right to a fair hearing under Article 50(1) of the Constitution of Kenya.
35. The Defendant is fully entitled to test the Plaintiff's interest calculations at trial. Consequently, the Amended Statement of Defence dated 29th April, 2025, cannot be wholly struck out. The defence raises genuine, triable issues strictly concerning the interest component of the claim.
36. The issue of costs must be addressed. It is a well-established legal principle that costs generally follow the event. The Plaintiff has partially succeeded in securing a judgment on admission for the principal sum. The Defendant has partially succeeded in saving its defence regarding the contested interest component. It is only fair and just that the costs of this interlocutory application abide the final outcome of the main suit.
Determination
37. In the final analysis, the Court makes the following determinations regarding the Plaintiff/Applicant’s application by way of a Notice of Motion dated 3rd June, 2025:
(i) This Honourable Court HEREBY enters judgement on admission in favour of the Plaintiff as against the Defendant for the admitted sum of Kshs. 90,000,000/=.
(ii) The balance of the Plaintiff’s claim which is contested to proceed for a hearing.
(iii) The costs of this application to abide the outcome of the suit.
38. It is so ordered.
DATED, SIGNED AND DELIVERED AT MILIMANI THIS 15TH DAY OF SEPTEMBER, 2026
NJOROGE BENJAMIN K.
JUDGE
In the presence of:
Mr. Gekonge holding brief for Mr. Nyaanga for the Plaintiff/Applicant.
Mr. Wena holding brief for Mr. Miller for the Defendant/Respondent.
Mr. John Paul - Court Assistant.
Background Facts
2. The background facts regarding the initial financial transactions are largely uncontested. The Plaintiff, KenGen Foundation, is a registered Trust. The Defendant, Stima Investment Cooperative Society, is a registered cooperative society.
3. In the years 2015 and 2016, the Plaintiff invested portions of its endowment funds into the Defendant's fixed deposit real estate fund. The investments were disbursed in two tranches of Kshs.50,000,000/= each.
4. The commercial relationship deteriorated when the investments matured. The Plaintiff contends that the parties explicitly agreed to consolidate the two sums. The Plaintiff avers that a unified interest rate of 16.3% per annum was to apply on a continuous rollover basis. The Defendant made a single repayment of Kshs. 10,000,000 on 30th September, 2021.
5. The Plaintiff claims an outstanding balance of Kshs. 363,038,070.79 as at 30th September, 2024. The Defendant filed an Amended Statement of Defence dated 29th April, 2025. The Defendant firmly denies the consolidation agreement. The Defendant explicitly rejects the applicability of the 16.3% interest rate. The Defendant, however, admits that the outstanding principal amount owed is Kshs. 90,000,000.
6. The Plaintiff subsequently filed a Notice of Motion application dated 3rd June, 2025. The application is brought under Section 3A of the Civil Procedure Act, Order 2 Rule 15, Order 13 Rule 2, and Order 51 of the Civil Procedure Rules.
7. The application seeks four specific orders as follows:
(i) This Honourable Court be pleased to strike out the Defendant's Amended Statement of Defence dated 29th April, 2025.
(ii) This Honourable Court be pleased to enter judgement on admission against the Defendant.
(iii) This Honourable Court be pleased to enter judgement against the Defendant as prayed in the Plaint dated 17th October, 2024.
(iv) The cost of this Application be borne by the Defendant.
8. The application is supported by the Affidavit and Supplementary Affidavit of Anthony Waithaka Igecha. The Plaintiff grounds the application on the core premise that the Amended Statement of Defence is a sham. The Plaintiff argues that the Defendant's explicit admission of Kshs. 90,000,000 extinguishes any triable issue regarding the principal sum.
9. The Plaintiff further asserts that documentary evidence conclusively proves the agreed 16.3% interest rate. The Plaintiff relies heavily on correspondence authored by the Defendant. A letter dated 15th February, 2016, acknowledges the investment terms. A subsequent letter dated 20th September, 2017, explicitly confirms the interest rate at 16.3% per annum.
10. In its written submissions, the Plaintiff relies on the locus classicus of D.T. Dobie & Company (Kenya) Limited v Joseph Mbaria Muchina & another [1980] KECA 3 (KLR). The Plaintiff emphasizes the holding that a suit should be summarily dismissed if it is hopelessly weak and discloses no reasonable defence.
11. The Plaintiff further cites Mpaka Road Development Limited v Kana (2004) 1 E.A. 124, and Peter Paul Muthoka v Francis Kibiba Lelo [2012] KEHC 2080 (KLR). The Plaintiff argues that the mere denials in the Amended Statement of Defence are frivolous and vexatious. The Plaintiff also cites Jubilee Insurance Company Limited v Daniel Maingi Muchiri [2015] KEHC 3703 (KLR) to urge the Court to strike out evasive general traverses.
12. The Defendant vigorously opposes the application. The opposition is anchored on a Replying Affidavit sworn by Damaris Mutile on 11th September, 2025, and accompanying written submissions. The Defendant asserts that the Amended Statement of Defence raises bona fide triable issues.
13. The Defendant argues that the interest rate of 16.3% and the alleged consolidation of the sums are hotly contested factual matters. The Defendant contends these matters require viva voce evidence and cross-examination. The Defendant maintains that the Kshs. 90,000,000 admission was merely part of an unconsummated settlement proposal involving nineteen residential units at the Stima Heights project.
14. The Defendant submits that striking out pleadings is a draconian measure. The Defendant cites Ramji Megji Gudka Ltd v Alfred Morfat Omundi Michira & 2 others [2005] eKLR. The Defendant relies on the holding that the power to strike out pleadings must be sparingly exercised and reserved only for the clearest of cases.
15. The Defendant further cites Libera Impex Limited v Libera Executive Limited [2026] KEHC 837 (KLR). The Defendant argues that the Court must act with extreme caution and sustain a suit where a triable issue exists, regardless of the perceived weakness of the defence.
Issues for Determination
16. The pleadings, the interlocutory application, the affidavits on record, and the rival written submissions have been carefully evaluated. The Court has equally considered the oral highlights of the submissions by Counsel on record. The Court frames two (2) distinct issues for determination.
(i) Whether the Court should enter judgment on admission.
(ii) Whether the Amended Statement of Defence ought to be struck out in its entirety.
Analysis
17. This Court has taken note of the position that whether to enter judgment on admission or to strike out the Statement of defence, all call for the exercise of the Court’s discretion. It is a discretion that is to be exercised judicially and not capriciously. The Court now turns to answering the issues as framed.
(i) Whether the Court should enter judgment on admission.
18. The first issue concerns the prayer for judgment on admission. Order 13 Rule 2 of the Civil Procedure Rules grants the Court jurisdiction to enter judgment where admissions of fact have been made. Such admissions may appear on the face of the pleadings or otherwise. The jurisprudence demands that an admission must be plain, clear, and unequivocal to warrant summary judgment.
19. An examination of the Defendant's Amended Statement of Defence dated 29th April, 2025, is necessary. Paragraph 9 explicitly states that the proposed settlement offer would have settled the outstanding amount of Kshs. 90,000,000. Paragraph 14 goes further, stating in no uncertain terms:
"Further the only outstanding amount owed to the plaintiff is Kshs. 90,000,000 (Ninety Million shillings and the Defendant had offered a settlement proposal".
20. This constitutes a deliberate, unequivocal, and unconditional admission of liability to the tune of Kshs. 90,000,000. An admission of a debt cannot be articulated with greater clarity. A Defendant cannot unequivocally admit to owing a specific sum in its substantive pleadings and simultaneously attempt to hide behind a general traverse to delay judgment.
21. The Plaintiff's submissions correctly identify this admission.
22. The Court of Appeal in Choitram & another v Nazari [1984] KECA 47 (KLR) laid down the definitive test for the application of Order 13 Rule 2. The appellate Court held that admissions of fact need not be exclusively on the pleadings; they may be in correspondence or documents. The Court established that judgment on admission must be entered where the admission of liability is clear and unequivocal, leaving no room for copious interpretation.
23. This position is further cemented by the decision in Cassam & another v Sachania & another [1982] KECA 1 (KLR). The Court held that the discretion to grant judgment on admission is exercised in plain cases where the facts amount to a clear admission of liability entitling the plaintiff to judgment. Furthermore, in Guardian Bank Limited v Jambo Biscuits Kenya Limited [2014] KEHC 1796 (KLR) it was held that the admission must be very clear and unequivocal on a plain perusal.
24. Applying these principles, the Defendant has plainly admitted the principal sum of Kshs. 90,000,000. The Plaintiff is therefore legally entitled to judgment on admission for this specific sum. The Court need not wait for the determination of any other question between the parties to grant this relief.
(ii) Whether the Amended Statement of Defence ought to be struck out in its entirety.
25. The second issue concerns the prayer for striking out the Amended Statement of Defence. The Plaintiff seeks to strike out the entire defence and obtain immediate judgment for the total pleaded sum of Kshs. 363,038,070.79.
26. The law governing the striking out of pleadings under Order 2 Rule 15 is well settled. It is a draconian and summary power. The power is exercised only in the clearest of cases. A pleading will only be struck out if it is hopelessly bad, frivolous, vexatious, or constitutes a blatant abuse of the Court process.
27. The seminal authority remains DT Dobie & Company (Kenya) Ltd v Muchina & another [1980] KECA 3 (KLR). The Court of Appeal cautioned that no suit ought to be summarily dismissed unless it is so weak as to be beyond redemption and incurable by amendment. A Court of justice should aim at sustaining a suit rather than terminating it summarily, effectively driving a litigant from the judgment seat without a hearing.
28. The Plaintiff argues that the pre-suit correspondence exposes the defence as a sham. Specifically, the letter dated 15th February, 2016, and the letter dated 20th September, 2017, show the Defendant acknowledging the 16.3% interest rate. The Plaintiff contends that the denial of the interest agreement in paragraph 4 of the Amended Statement of Defence is demonstrably false and vexatious.
29. A critical examination of the record reveals a profound dispute regarding the computation of the interest claimed. The original principal sum was Kshs. 100,000,000. The Plaintiff's claim has ballooned to Kshs. 363,038,070.79. This exponential growth is attributed to compound, rollover interest applied continuously over several years.
30. The Defendant firmly denies the specific agreement to roll over the interest in the manner pleaded by the Plaintiff. The Defendant contests the mechanics of the interest computation. The Defendant also raises the issue of previous settlement negotiations, internal audits, and severe liquidity challenges that disrupted the expected repayment structure.
31. The documentary evidence undeniably shows that the 16.3% rate was mentioned in the historical correspondence. However, the exact contractual mechanics of the interest computation are not expressly admitted. The legality of the unilateral compound rollover over seven years, and the precise mathematical quantum of the remaining balance, constitute factual controversies.
32. The Court must heed the strict caution sounded by the appellate Courts. Even if a defence appears weak or highly unlikely to succeed, it must not be struck out if it raises a single triable issue. A triable issue is one that requires the rigorous testing of evidence through a full trial.
33. The dispute over the Kshs. 273,038,070.79 interest component requires the adduction of oral evidence. The Court must forensically examine the specific investment terms. The scope and validity of the rollover agreements must be tested. The parties' conduct over the seven-year period must be subjected to the crucible of cross-examination.
34. These substantive issues cannot be resolved summarily on conflicting affidavit evidence alone. The Court cannot and will not conduct a mini-trial at an interlocutory stage. To strike out the entire defence would unlawfully deprive the Defendant of its constitutional right to a fair hearing under Article 50(1) of the Constitution of Kenya.
35. The Defendant is fully entitled to test the Plaintiff's interest calculations at trial. Consequently, the Amended Statement of Defence dated 29th April, 2025, cannot be wholly struck out. The defence raises genuine, triable issues strictly concerning the interest component of the claim.
36. The issue of costs must be addressed. It is a well-established legal principle that costs generally follow the event. The Plaintiff has partially succeeded in securing a judgment on admission for the principal sum. The Defendant has partially succeeded in saving its defence regarding the contested interest component. It is only fair and just that the costs of this interlocutory application abide the final outcome of the main suit.
Determination
37. In the final analysis, the Court makes the following determinations regarding the Plaintiff/Applicant’s application by way of a Notice of Motion dated 3rd June, 2025:
(i) This Honourable Court HEREBY enters judgement on admission in favour of the Plaintiff as against the Defendant for the admitted sum of Kshs. 90,000,000/=.
(ii) The balance of the Plaintiff’s claim which is contested to proceed for a hearing.
(iii) The costs of this application to abide the outcome of the suit.
38. It is so ordered.
DATED, SIGNED AND DELIVERED AT MILIMANI THIS 15TH DAY OF SEPTEMBER, 2026
NJOROGE BENJAMIN K.
JUDGE
In the presence of:
Mr. Gekonge holding brief for Mr. Nyaanga for the Plaintiff/Applicant.
Mr. Wena holding brief for Mr. Miller for the Defendant/Respondent.
Mr. John Paul - Court Assistant.