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MagistrateOtherNot stated in the judgment· [2025] KEMC 306 (KLR)

Mbaluka t/a Mmawo v Sidian Bank Limited & another (Civil Case E110 of 2023) [2025] KEMC 306 (KLR)

Magistrates' Court
10 December 2025
YSY. A. Shikanda
1,797 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~7 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that withdrawing a lawsuit doesn't avoid costs—the plaintiff who filed while in loan arrears must pay the defendants' legal costs.

What this practically means

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Executive summary

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The suit, arising from an asset finance agreement between the plaintiff and the 1st defendant concerning a motor vehicle that the defendants repossessed and advertised for sale, was withdrawn or marked as settled on 3/9/2025 after the plaintiff fully serviced the loan and the vehicle was returned to her. The only remaining question was costs: the plaintiff sought that the matter be closed with no orders as to costs (costs in the cause), while the defendants, who had filed a defence and incurred counsel and court fees, sought costs on the principle that costs follow the event. The court framed the sole issue as whether the costs of the suit were payable and by whom. Applying section 27 of the Civil Procedure Act and the Supreme Court's decision in Rai v Rai, the magistrate held that costs follow the event unless the court, for good reason, orders otherwise, and that the discretion must be exercised judicially and not arbitrarily. Although the suit was not heard on merit, so there was no successful party in the strict sense, the court found that the plaintiff filed suit while the loan was in arrears, obtained ex parte injunction orders, and effectively used the litigation to buy time to clear the loan balance. Relying on Pacis Insurance Company Ltd v Francis Njeru Njoka, the court held a defendant caused to participate in a withdrawn suit is entitled to its costs. The court awarded costs of the suit to the defendants, to be borne by the plaintiff, with liberty to agree on the amount, failing which the defendants to proceed under Order 21 rules 9A–9D of the Civil Procedure Rules.

Key legal issues

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01

Whether costs are payable and by whom where the suit is withdrawn as settled without trial

Holding

Costs were awarded to the defendants. The suit was effectively withdrawn, not heard on merit, so there was no successful party in the strict sense, but the plaintiff's conduct—filing suit while in loan arrears, obtaining ex parte injunction orders and using the suit to buy time to clear the loan—gave no good reason to depart from the rule that costs follow the event.

Reasoning

Section 27 of the Civil Procedure Act confers discretion on the court, with the default rule that costs follow the event. The discretion must be exercised judicially and reasons given for departing from the general rule. Although the matter was withdrawn rather than decided on merit, the plaintiff instituted suit while the loan was in arrears, kept it in court over two years, and obtained interlocutory relief that bought time to clear the loan. Denying the defendants, who incurred counsel and court fees, their costs would be unfair; the Pacis Insurance authority supports awarding costs to a defendant upon withdrawal.

p. 4

Legal principles established

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  • Costs are in the discretion of the court and follow the event unless the court, for good reason, otherwise orders; where the court departs from the general rule it must give reasons patent on record.
  • A defendant caused to participate in a suit that is later withdrawn is entitled to costs incurred in defending it, unless the parties agree otherwise or the court in the exercise of its discretion decides otherwise.

Court orders

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  1. 1.Costs of the suit awarded to the defendants, to be borne by the plaintiff
  2. 2.Parties at liberty to agree on the costs payable; in default of agreement, the defendants to follow the procedure under Order 21 rules 9A to 9D of the Civil Procedure Rules
Jurisdiction invoked
Section 27 of the Civil Procedure Act (discretion over costs of and incidental to suits)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Mbaluka t/a Mmawo v Sidian Bank Limited & another (Civil Case E110 of 2023) [2025] KEMC 306 (KLR)", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2025/306/eng@2025-12-10

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.