Njeru v Meru South Farmers Cooperative Soceity Union Limited (Employment and Labour Relations Appeal 2A of 2024) [2024] KEELRC 2816 (KLR)
The bottom line
#What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.What is the applicable interest rate on the decretal sum where the trial court's judgment is silent on the rate?
- 2.Whether the appellant is entitled to interest on both the decretal sum and the costs of the suit, and at what rate
Key legal issues
#Applicable interest rate on the decretal sum where the trial judgment is silent
Interest on the principal from filing suit to decree is 12% per annum (default court rate per Practice Notice No. 1 of 1982); further interest from decree to payment in full is 6% per annum under section 26(2). The trial court erred in applying only the 6% rate.
Section 26(1) of the Civil Procedure Act contemplates two levels of interest: court-ordered interest on the principal from suit to decree, and further interest from decree to payment. The 6% in section 26(2) is a deeming provision applying only to the second level. The Practice Notice by Chief Justice Simpson sets 12% as the default court rate for the first level where no rate is specified. The lower court conflated the two levels.
Interest rate applicable on costs of the suit where the trial court is silent
The 14% rate under section 27(2) is the default rate on costs; the trial court erred in applying section 26(2)'s 6% to costs.
Section 27(2) empowers the court to give interest on costs at up to 14% per annum but is silent on a default rate. Parliament separated interest on decrees (section 26) from interest on costs (section 27), so section 26(2)'s 6% cannot be imported into costs. The court inferred legislative intent that 14% is the default rate on costs from the date of filing suit.
Legal principles established
#- Where the trial court fails to specify the interest rate on the principal sum from filing suit to the date of the decree, the default rate is 12% per annum under the Practice Notice Number 1 of 1982.
- Where a decree is silent on further interest from the date of the decree to payment, interest is deemed ordered at 6% per annum under section 26(2) of the Civil Procedure Act.
- The 14% rate in section 27(2) of the Civil Procedure Act is the default rate of interest on costs where the trial court fails to specify a rate.
Court orders
#- 1.The ruling in Chuka CMCC No.66 of 2004 delivered on 9th November 2022 is set aside
- 2.12% interest on the decreed sum from date of filing to the date of the decree
- 3.6% interest on the decreed sum from the date of the decree until payment in full
- 4.14% interest on the costs of the suit from the date of filing suit until payment in full
- 5.Costs of the appeal awarded to the appellant
- 6.The judgment to apply to all the other 7 appeals indicated in the court's order of 24th July 2024
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Magistrates' Court, Chuka
- CMCC No. 66 of 2004 (ruling of 9th November 2022)
- Jurisdiction invoked
- First appeal transferred from the High Court to the Employment and Labour Relations Court; appeal against the trial court's ruling on interest rates
- Consolidated with
- The Judgment to apply to all the other 7 appeals indicated in my order issued on 24th July, 2024
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The applicable interest rate on the decretal sum and costs is as follows: i. 12% on the decreed sum from date of filing to the date of the decree.
14% on the costs of the suit from the date of filing suit until payment in full.
The ruling in Chuka CMCC No.66 of 2004 and delivered on 9th November 2022 is hereby set aside.
where the trial court fails to exercise the discretion to specify the interest rate applicable on the principal up to the time of the decree, the rate shall be 12% per annum.
To that extent, I also find that the lower court erred by holding that the interest rate on the costs of the suit is 6% pursuant to section 26(2) of the Act.
Issues in the judgment
#The judgment does not state the appeal's own case/number or neutral citation; the matter is identified only by the lower court case (Chuka CMCC No. 66 of 2004).
The judgment describes the appeal as against a ruling on an application but also describes a 'first appeal' with re-evaluation of evidence, though the record of the trial evidence is not set out.
The respondent referred to an application dated 14th February 2021 while the application before the trial court is described as dated 27th December 2021.
Decretal sum quoted inconsistently as 'Kshs. 260,0005.20' in the judgment.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Njeru v Meru South Farmers Cooperative Soceity Union Limited (Employment and Labour Relations Appeal 2A of 2024) [2024] KEELRC 2816 (KLR)", Case Analysis (2024). Not stated in the judgment (one of 8 related appeals identified only by reference to Chuka CMCC No. 66 of 2004). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2816/eng@2024-11-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.