Diversity Microcredit Limited v Gachau (Commercial Case 749 of 2025) [2026] SCC 37 (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.Whether the Small Claims Court has jurisdiction to entertain a dispute arising from the Claimant's exercise of its statutory power of sale / realization of a security
Key legal issues
#Whether the Small Claims Court has jurisdiction over a monetary claim arising from realization of a security
The claim, though framed as recovery of a monetary sum, requires interrogation of the validity of repossession, legality of the sale, compliance with the law and reasonableness of the price, which transcends the court's Section 12 jurisdiction
The court held that although the claim was pleaded as a simple money claim, its substance arose from the Claimant's exercise of its statutory power of sale. Determining it would require examining the validity of repossession, the legality of the sale process, statutory compliance and price reasonableness. Such complex questions of law and fact relating to realization of security go beyond the limited and specific jurisdiction conferred by Section 12 of the Small Claims Court Act.
Legal principles established
#- Disputes arising from the exercise of a statutory power of sale and the realization of security fall outside the jurisdiction of the Small Claims Court under Section 12 of the Small Claims Court Act
Court orders
#- 1.The claim is struck out for want of jurisdiction
- 2.No orders as to costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Section 12 of the Small Claims Court Act, 2016
Relief refused
#Judgment against the Respondent in the sum of Kshs. 559,645.36 together with costs of the claim
The claim was struck out because the court lacked jurisdiction over disputes requiring interrogation of the validity, legality and propriety of the realization of security
Costs
There shall be no orders as to costs.
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.
In the view of this Court, such matters transcend the limited and specific jurisdiction conferred upon this Court under Section 12 of the Small Claims Court Act.
Consequently, this claim is hereby struck out for want of jurisdiction. There shall be no orders as to costs.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Diversity Microcredit Limited v Gachau (Commercial Case 749 of 2025) [2026] SCC 37 (KLR)", Case Analysis (2026). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/scc/2026/37/eng@2026-04-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.