1. Judgment was entered on 17th February 2022 in favour of the Plaintiff for Kshs. 15,503,488.36, while the remaining claim of Kshs. 5,343,836.64, together with the issues of interest and costs, was reserved for determination at trial. The court directed that these outstanding issues be heard and determined separately.
2. Subsequently, by a Notice of Withdrawal dated 23rd February 2026, the Plaintiff withdrew its claim for Kshs. 5,343,836.64, leaving only the claim for interest on the sum of Kshs. 15,503,488.36 and costs of the suit. Consequently, the only issues remaining for determination were whether the Plaintiff was entitled to interest on the judgment sum, the applicable rate of such interest, and the question of costs.
3. The court herein gave directions for parties to file their submissions on the issue of interest and costs. The Plaintiff in their submissions dated 23rd February 2026 argued that although the award of interest under Section 26 of the Civil Procedure Act is discretionary, the discretion must be exercised in accordance with established legal principles. Relying on Orix Oil (Kenya) Limited v Paul Kabeu & 2 others [2014] KEHC 5086 (KLR), the Plaintiff argued that where a party has been deprived of a liquidated sum through the wrongful act of another, interest should ordinarily be awarded from the date of filing suit. Further reliance was placed on Economic Insurance Brokers Limited v Interfreight East Africa Limited & another [2025] KEHC 750 (KLR), where the court observed that the purpose of interest is to compensate a party for being kept out of money that was rightfully due to them.
4. The Plaintiff further submitted that where the rate of interest is not contractually agreed upon, the court should award interest at court rates, which it proposed to be 12% per annum. Accordingly, the Plaintiff contended that it was entitled to interest on the sum of Kshs. 15,503,488.36 at the rate of 12% per annum from the date of filing suit until payment in full.
5. On costs, the Plaintiff argued that although costs are also discretionary, the general rule is that they follow the event. Citing Orix Oil (Kenya) Limited v Paul Kabeu & 2 others (supra), the Plaintiff submitted that a successful litigant should ordinarily be awarded costs unless there is conduct justifying a departure from that principle. Since the Plaintiff had succeeded in its claim and no misconduct had been alleged against it, the Plaintiff urged the court to award costs of the suit together with interest on those costs at the rate of 12% per annum from the date of judgment. Accordingly, the Plaintiff prayed for interest at 12% per annum from the date of filing suit, costs of the suit, and interest on costs from the date of judgment until payment in full.
6. The Defendant in their submissions dated 11th May 2026 contended that the Plaintiff’s Plaint sought Kshs. 20,847,325.00 together with interest at a commercial rate of 14% per annum from 30th September 2019 until payment in full. While acknowledging that Section 26 of the Civil Procedure Act grants the court discretion to award interest at such rate as it deems reasonable, the Defendant argued that the Plaintiff had failed to adduce any evidence or justification for the claimed commercial interest rate of 14% per annum. Consequently, the Defendant urged the court to exercise its discretion judiciously and, if interest were to be awarded, to do so at court rates from the date of filing suit.
7. On costs, the Defendant relied on Section 27 of the Civil Procedure Act, which provides that costs are in the discretion of the court and generally follow the event unless the court orders otherwise for good reason. Citing Farah Awad Gullet v CMC Motors Group Limited [2018] KECA 158 (KLR), the Defendant urged the court to exercise its discretion fairly and judiciously in determining both interest and costs.
8. The power of the court to award interest is donated by Section 26(1) of the Civil Procedure Act, which provides that: -
Where and in so far as a decree is for the payment of money, the court may, in the decree, order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree in addition to any interest adjudged on such principal sum for any period before the institution of the suit, with further interest at such rate as the court deems reasonable on the aggregate sum so adjudged from the date of the decree to the date of payment or to such earlier date as the court thinks fit.
9. The principles governing the award of interest are now well settled. In Prem Lata v Peter Musa Mbiyu [1965] EA 592, the Court held that: -
“The award of interest on a decree for the payment of money for the period from the date of the suit to the date of the decree is a matter entirely within the courts discretion, by s.26 of the Civil Procedure Act. Such a discretion must of course be judicially exercised, and where as in this case no reasons are given for the exercise of a judicial discretion in a particular manner, it will be assumed that the discretion has been correctly exercised, unless the contrary be shown (Toprani v. Patel (1) [1985] E.A. at p. 349) … the successful party was deprived of the use of goods or money to which he is entitled should be compensated for such deprivation by the award of interest.”
10. Interest serves as compensation for the detention of money. The Court of Appeal in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1970] EA 469 recognized that: -
“The principle that emerges is that where a person is entitled to a liquidated amount or to specific goods and has been deprived of them through the wrongful act of another person, he should be awarded interests from the date of filing suit. Where, however, damages have to be assessed by the Court, the right to those damages does not arise until they are assessed and therefore interest is only given from the date of the judgment.”
11. More recently, in Orix Oil (Kenya) Limited v Paul Kabeu & 2 others [2014] KEHC 5086 (KLR), the court reiterated that: -
“Whereas the plaintiff in its plaint only prayed for interest without specifying from when it should be paid; it is for the discretion of the court to determine the time from when the interest should be payable. The exercise of discretion must, however, be founded on some defined legal principles, not whimsically or capriciously. There are copious judicial decisions on this subject. See the case of PREM LATA v PETER MUSA MBIYU (supra), that:
...interest should normally be awarded on special damages, if the amount claimed has been actually expended or incurred at the date of filing suit
Equally, I find and hold the plaintiff has a judgment on a liquidated amount which it had been deprived through the wrongful act of the Defendant, and therefore, it should be awarded interest from the date of filing the suit.”
12. In the present case, judgment has already been entered for a liquidated sum of Kshs. 15,503,488.36. The Defendant has had the benefit of retaining that money while the Plaintiff has been deprived of its use. The Plaintiff is therefore entitled to an award of interest.
13. The Plaintiff initially pleaded interest at the commercial rate of 14% per annum from 30th September 2019. However, no contractual provision, banking arrangement, trade usage, expert evidence or other material was produced to justify the application of a commercial rate. Courts have consistently held that a party seeking commercial interest must prove the basis for such a rate. In Highway Furniture Mart Limited v Permanent Secretary Office of The President & another [2006] KECA 190 (KLR), the court held: -
“The authors further show that according to the substantive law, interest antecedent to the suit is only claimable where under an agreement there is stipulation for the rate of interest (contractual rate of interest) or where there is no stipulation, but interest is allowed by mercantile usage (which must be pleaded and proved) or where there is statutory right to interest or where an agreement to pay interest can be implied from the course of dealing between parties (see pages 511 – 514) of Mulla (supra).
In this case the building contract did not provide for payment of interest. The appellant did not prove before the trial Judge that interest before the institution of the suit was awardable in law in the circumstances of the case. We have come to the inescapable conclusion that the claim for interest at 36% for the period prior to the institution of the suit was not maintainable in law and was illegally included in the decree prepared by the appellant’s advocates.”
14. In the absence of evidence justifying a commercial rate of interest, the court declines to award interest at 14% per annum. Instead, the court finds that an award of interest at court rates is reasonable and consistent with the discretion conferred by Section 26 of the Civil Procedure Act.
15. The Plaintiff has urged the court to apply a rate of 12% per annum. However, it is settled practice that where the court awards interest at court rates, the applicable rate shall be the prevailing court rate from time to time as prescribed and applied by the courts.
16. On the commencement date, this court is persuaded by the reasoning in Orix Oil (Kenya) Limited v Paul Kabeu & 2 others (supra) that interest on a liquidated claim should ordinarily run from the date of filing suit. Since the decretal amount represented a specific ascertainable sum and there are no exceptional circumstances warranting a departure from that principle, interest shall accrue from the date of filing suit until payment in full.
17. As regards costs, Section 27(1) of the Civil Procedure Act provides that costs shall follow the event unless the court for good reason orders otherwise. The Supreme Court in Rai & 3 others v Rai & 4 others [2014] KESC 31 (KLR) affirmed that while costs remain discretionary, a successful litigant should ordinarily be awarded costs unless there are circumstances justifying a different order.
18. In the present case, the Plaintiff succeeded in obtaining judgment for Kshs. 15,503,488.36. Although part of the claim was subsequently withdrawn, the Plaintiff remains substantially successful in the litigation. No misconduct or other special circumstances have been demonstrated to warrant depriving the Plaintiff of costs.
19. This court therefore finds that the Plaintiff is entitled to the costs of the suit. Pursuant to Section 26(2) of the Civil Procedure Act, interest on taxed costs shall accrue at court rates from the date of taxation, or where costs are agreed, from the date of such agreement, until payment in full.
Determination
20. Accordingly, the court makes the following orders: -
(a) The Plaintiff is awarded interest on the sum of Kshs. 15,503,488.36 at court rates from the date of filing suit until payment in full.
(b) The Plaintiff is awarded the costs of the suit.
(c) Interest on the taxed costs shall accrue at court rates from the date of taxation until payment in full.
Dated and delivered virtually at Mombasa this 25th day of June, 2026
………………………..
HON. F. WANGARI
JUDGE OF THE HIGH COURT
In the presence of: -
Mr. Kongere Advocate for the Plaintiff
Ms. Kanyaha Advocate h/b for Advocate for the Defendant
Ms. Salwa, Court Assistant
2. Subsequently, by a Notice of Withdrawal dated 23rd February 2026, the Plaintiff withdrew its claim for Kshs. 5,343,836.64, leaving only the claim for interest on the sum of Kshs. 15,503,488.36 and costs of the suit. Consequently, the only issues remaining for determination were whether the Plaintiff was entitled to interest on the judgment sum, the applicable rate of such interest, and the question of costs.
3. The court herein gave directions for parties to file their submissions on the issue of interest and costs. The Plaintiff in their submissions dated 23rd February 2026 argued that although the award of interest under Section 26 of the Civil Procedure Act is discretionary, the discretion must be exercised in accordance with established legal principles. Relying on Orix Oil (Kenya) Limited v Paul Kabeu & 2 others [2014] KEHC 5086 (KLR), the Plaintiff argued that where a party has been deprived of a liquidated sum through the wrongful act of another, interest should ordinarily be awarded from the date of filing suit. Further reliance was placed on Economic Insurance Brokers Limited v Interfreight East Africa Limited & another [2025] KEHC 750 (KLR), where the court observed that the purpose of interest is to compensate a party for being kept out of money that was rightfully due to them.
4. The Plaintiff further submitted that where the rate of interest is not contractually agreed upon, the court should award interest at court rates, which it proposed to be 12% per annum. Accordingly, the Plaintiff contended that it was entitled to interest on the sum of Kshs. 15,503,488.36 at the rate of 12% per annum from the date of filing suit until payment in full.
5. On costs, the Plaintiff argued that although costs are also discretionary, the general rule is that they follow the event. Citing Orix Oil (Kenya) Limited v Paul Kabeu & 2 others (supra), the Plaintiff submitted that a successful litigant should ordinarily be awarded costs unless there is conduct justifying a departure from that principle. Since the Plaintiff had succeeded in its claim and no misconduct had been alleged against it, the Plaintiff urged the court to award costs of the suit together with interest on those costs at the rate of 12% per annum from the date of judgment. Accordingly, the Plaintiff prayed for interest at 12% per annum from the date of filing suit, costs of the suit, and interest on costs from the date of judgment until payment in full.
6. The Defendant in their submissions dated 11th May 2026 contended that the Plaintiff’s Plaint sought Kshs. 20,847,325.00 together with interest at a commercial rate of 14% per annum from 30th September 2019 until payment in full. While acknowledging that Section 26 of the Civil Procedure Act grants the court discretion to award interest at such rate as it deems reasonable, the Defendant argued that the Plaintiff had failed to adduce any evidence or justification for the claimed commercial interest rate of 14% per annum. Consequently, the Defendant urged the court to exercise its discretion judiciously and, if interest were to be awarded, to do so at court rates from the date of filing suit.
7. On costs, the Defendant relied on Section 27 of the Civil Procedure Act, which provides that costs are in the discretion of the court and generally follow the event unless the court orders otherwise for good reason. Citing Farah Awad Gullet v CMC Motors Group Limited [2018] KECA 158 (KLR), the Defendant urged the court to exercise its discretion fairly and judiciously in determining both interest and costs.
8. The power of the court to award interest is donated by Section 26(1) of the Civil Procedure Act, which provides that: -
Where and in so far as a decree is for the payment of money, the court may, in the decree, order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree in addition to any interest adjudged on such principal sum for any period before the institution of the suit, with further interest at such rate as the court deems reasonable on the aggregate sum so adjudged from the date of the decree to the date of payment or to such earlier date as the court thinks fit.
9. The principles governing the award of interest are now well settled. In Prem Lata v Peter Musa Mbiyu [1965] EA 592, the Court held that: -
“The award of interest on a decree for the payment of money for the period from the date of the suit to the date of the decree is a matter entirely within the courts discretion, by s.26 of the Civil Procedure Act. Such a discretion must of course be judicially exercised, and where as in this case no reasons are given for the exercise of a judicial discretion in a particular manner, it will be assumed that the discretion has been correctly exercised, unless the contrary be shown (Toprani v. Patel (1) [1985] E.A. at p. 349) … the successful party was deprived of the use of goods or money to which he is entitled should be compensated for such deprivation by the award of interest.”
10. Interest serves as compensation for the detention of money. The Court of Appeal in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1970] EA 469 recognized that: -
“The principle that emerges is that where a person is entitled to a liquidated amount or to specific goods and has been deprived of them through the wrongful act of another person, he should be awarded interests from the date of filing suit. Where, however, damages have to be assessed by the Court, the right to those damages does not arise until they are assessed and therefore interest is only given from the date of the judgment.”
11. More recently, in Orix Oil (Kenya) Limited v Paul Kabeu & 2 others [2014] KEHC 5086 (KLR), the court reiterated that: -
“Whereas the plaintiff in its plaint only prayed for interest without specifying from when it should be paid; it is for the discretion of the court to determine the time from when the interest should be payable. The exercise of discretion must, however, be founded on some defined legal principles, not whimsically or capriciously. There are copious judicial decisions on this subject. See the case of PREM LATA v PETER MUSA MBIYU (supra), that:
...interest should normally be awarded on special damages, if the amount claimed has been actually expended or incurred at the date of filing suit
Equally, I find and hold the plaintiff has a judgment on a liquidated amount which it had been deprived through the wrongful act of the Defendant, and therefore, it should be awarded interest from the date of filing the suit.”
12. In the present case, judgment has already been entered for a liquidated sum of Kshs. 15,503,488.36. The Defendant has had the benefit of retaining that money while the Plaintiff has been deprived of its use. The Plaintiff is therefore entitled to an award of interest.
13. The Plaintiff initially pleaded interest at the commercial rate of 14% per annum from 30th September 2019. However, no contractual provision, banking arrangement, trade usage, expert evidence or other material was produced to justify the application of a commercial rate. Courts have consistently held that a party seeking commercial interest must prove the basis for such a rate. In Highway Furniture Mart Limited v Permanent Secretary Office of The President & another [2006] KECA 190 (KLR), the court held: -
“The authors further show that according to the substantive law, interest antecedent to the suit is only claimable where under an agreement there is stipulation for the rate of interest (contractual rate of interest) or where there is no stipulation, but interest is allowed by mercantile usage (which must be pleaded and proved) or where there is statutory right to interest or where an agreement to pay interest can be implied from the course of dealing between parties (see pages 511 – 514) of Mulla (supra).
In this case the building contract did not provide for payment of interest. The appellant did not prove before the trial Judge that interest before the institution of the suit was awardable in law in the circumstances of the case. We have come to the inescapable conclusion that the claim for interest at 36% for the period prior to the institution of the suit was not maintainable in law and was illegally included in the decree prepared by the appellant’s advocates.”
14. In the absence of evidence justifying a commercial rate of interest, the court declines to award interest at 14% per annum. Instead, the court finds that an award of interest at court rates is reasonable and consistent with the discretion conferred by Section 26 of the Civil Procedure Act.
15. The Plaintiff has urged the court to apply a rate of 12% per annum. However, it is settled practice that where the court awards interest at court rates, the applicable rate shall be the prevailing court rate from time to time as prescribed and applied by the courts.
16. On the commencement date, this court is persuaded by the reasoning in Orix Oil (Kenya) Limited v Paul Kabeu & 2 others (supra) that interest on a liquidated claim should ordinarily run from the date of filing suit. Since the decretal amount represented a specific ascertainable sum and there are no exceptional circumstances warranting a departure from that principle, interest shall accrue from the date of filing suit until payment in full.
17. As regards costs, Section 27(1) of the Civil Procedure Act provides that costs shall follow the event unless the court for good reason orders otherwise. The Supreme Court in Rai & 3 others v Rai & 4 others [2014] KESC 31 (KLR) affirmed that while costs remain discretionary, a successful litigant should ordinarily be awarded costs unless there are circumstances justifying a different order.
18. In the present case, the Plaintiff succeeded in obtaining judgment for Kshs. 15,503,488.36. Although part of the claim was subsequently withdrawn, the Plaintiff remains substantially successful in the litigation. No misconduct or other special circumstances have been demonstrated to warrant depriving the Plaintiff of costs.
19. This court therefore finds that the Plaintiff is entitled to the costs of the suit. Pursuant to Section 26(2) of the Civil Procedure Act, interest on taxed costs shall accrue at court rates from the date of taxation, or where costs are agreed, from the date of such agreement, until payment in full.
Determination
20. Accordingly, the court makes the following orders: -
(a) The Plaintiff is awarded interest on the sum of Kshs. 15,503,488.36 at court rates from the date of filing suit until payment in full.
(b) The Plaintiff is awarded the costs of the suit.
(c) Interest on the taxed costs shall accrue at court rates from the date of taxation until payment in full.
Dated and delivered virtually at Mombasa this 25th day of June, 2026
………………………..
HON. F. WANGARI
JUDGE OF THE HIGH COURT
In the presence of: -
Mr. Kongere Advocate for the Plaintiff
Ms. Kanyaha Advocate h/b for Advocate for the Defendant
Ms. Salwa, Court Assistant