Biosystems Consultants v Nyali Links Arcade Limited [2023] KEHC 21068 (KLR)

1. Case Title & Citation 

The case is Biosystems Consultants v Nyali Links Arcade Limited [2023]. The official citation is [2023] KEHC 21068 (KLR), reflecting its determination within the High Court of Kenya at Mombasa, Commercial and Tax Division. 

2. Court Name & Bench 

The matter was heard before the High Court of Kenya at Mombasa, sitting in the Commercial and Tax Division. The ruling was delivered by Hon. Justice D.K.N. Magare, presiding as a single-judge bench exercising supervisory jurisdiction over the Small Claims Court. 

3. Date of Judgment 

The judgment was delivered on 31 July 2023. 

4. Parties Involved 

The applicant was Biosystems Consultants, a corporate entity that had instituted proceedings before the Mombasa Small Claims Court to recover a commercial debt. The respondent, Nyali Links Arcade Limited, is a limited liability company engaged in property and commercial activities. While the applicant sought to have its claim substantively heard and determined on the merits, the respondent resisted the continuation of proceedings, raising jurisdictional objections grounded in the statutory timelines prescribed under the Small Claims Court Act. 

5. Facts of the Case 

• The dispute arose in Mombasa Small Claims Court Civil Case No. E195 of 2023, filed on 14 April 2023, where the applicant sought to recover a commercial debt from the respondent. 
• Section 34 of the Small Claims Court Act requires that cases be determined within sixty days of filing, reflecting Parliament’s intention to promote efficiency and speedy disposal of small-value disputes.
• By early July 2023, more than sixty days had passed since filing, yet the matter had not been resolved. The delay was partly attributable to adjournments, preliminary objections, and procedural interruptions, several of which had been instigated by the respondent itself. 
• On 6 July 2023, the applicant filed an application before the High Court seeking to transfer the matter to the Chief Magistrate’s Court, arguing that the statutory sixty-day period had lapsed and that any judgment delivered thereafter by the Small Claims Court would be rendered without jurisdiction and thus nugatory. 
• The applicant’s argument leaned heavily on the decision in Kartar Singh Dhupar & Company Limited v ARM Cement PLC (In Liquidation) (Civil Appeal 129 of 2022) [2023] KEHC 2417 (KLR), in which the High Court had held that a judgment delivered by the Small Claims Court outside the statutory sixty-day period was without jurisdiction and a nullity. 
• The applicant therefore contended that, unless transferred, the case risked suffering the same fate and its claim being rendered unenforceable. 
• The respondent opposed the application, asserting that the lapse of sixty days meant the Small Claims Court automatically lost jurisdiction and that the claim effectively stood dismissed by operation of law. 
• To reinforce this position, the respondent relied on Kartar Singh Dhupar and argued that transfer to another court was impermissible, since there was no longer a valid suit to transfer. 
• On 7 July 2023, the respondent also filed an application to strike out the suit, maintaining that the case had already collapsed by operation of law. 
• The record disclosed, however, that the respondent, while seeking to rely on the expiry of statutory timelines, had itself contributed to delays by seeking adjournments and raising preliminary objections that consumed part of the sixty-day period. 

6. Issues Raised 

• Whether the Small Claims Court retained jurisdiction to determine a matter after the lapse of the statutory sixty days under section 34 of the Small Claims Court Act.
• What guidelines should be adopted to give effect to the objectives of the Small Claims Court Act and ensure efficient disposal of cases in the absence of formal practice directions. 
• The nature of a preliminary objection, and whether both the High Court and the Small Claims Court enjoy concurrent jurisdiction in determining preliminary objections. 

7. Arguments of the Parties 

The applicant argued that the sixty-day limit in section 34 of the Act was a strict jurisdictional requirement. Once the statutory period expired, any judgment or order made by the Small Claims Court would be a nullity. The applicant anchored this submission in the High Court’s decision in Kartar Singh Dhupar, where a Small Claims Court judgment issued outside the statutory timeframe had been invalidated for want of jurisdiction. It interpreted that decision as binding precedent requiring strict enforcement of the sixty-day rule. The applicant therefore submitted that the only viable option was to transfer the matter to the Chief Magistrate’s Court, where proceedings could continue without risk of nullification. 

The respondent countered that once sixty days had elapsed, the Small Claims Court was automatically divested of jurisdiction, and the suit was deemed dismissed by operation of law. According to the respondent, there was no valid case in existence that could be transferred. In support, the respondent also cited Kartar Singh Dhupar, but interpreted it to mean that the expiry of statutory timelines extinguished proceedings entirely, leaving nothing capable of revival or transfer. The respondent subsequently filed a motion to strike out the suit, asserting that statutory timelines under the Act created substantive rights and obligations, and their expiry terminated jurisdiction absolutely. 

8. Judgment / Final Decision 

The High Court dismissed the applicant’s request to transfer the case. 

On the first issue, the court held that section 34 of the Small Claims Court Act was directory rather than mandatory. The sixty-day timeline was characterized as aspirational, designed to promote efficiency but not to extinguish jurisdiction. The judge emphasized that adopting a rigid interpretation would frustrate the purpose of the Act, undermine access to justice, and enable parties to manipulate timelines through deliberate procedural delays.

On the second issue, the court recognized the absence of practice directions from the Rules Committee and stepped in to issue interim guidelines to ensure the smooth functioning of the Small Claims Court. These included immediate service of documents, hearings commencing without unnecessary mentions, strict curtailment of adjournments, written submissions capped at three pages, early filing of submissions where appropriate, and reliance on section 30 to allow determination on documents alone if agreed by the parties. The judge stressed that these measures were designed to give practical effect to the Act’s goal of expeditious dispute resolution while preserving fairness. 

On the third issue, the court held that both the High Court and the Small Claims Court have jurisdiction to determine preliminary objections. However, it cautioned against misuse of such objections, reiterating that they should be confined strictly to pure points of law and should not be deployed as tactical tools to delay or derail proceedings. 

In the result, the application for transfer was dismissed, the jurisdiction of the Small Claims Court was affirmed despite the lapse of sixty days, and the matter was ordered to proceed before that court under the newly issued guidelines. 

9. Legal Reasoning / Ratio Decidendi 

The judge’s reasoning was rooted in purposive interpretation of section 34, read alongside the Constitution. Articles 48 and 159(2) enshrine access to justice and emphasize that justice should not be sacrificed on the altar of undue technicalities. Against this backdrop, the sixty-day period was interpreted as a guiding principle rather than a jurisdictional bar. 

The court specifically remarked: “The sixty days did not have penal consequences… they were aspirational.” This statement underscored that statutory deadlines, while important for efficiency, must not defeat substantive justice. 

The High Court distinguished Kartar Singh Dhupar by clarifying that while the earlier decision highlighted the importance of timelines, it should not be interpreted as an absolute bar that nullifies proceedings absent express statutory language imposing such a consequence. Rather, courts must balance statutory efficiency with constitutional obligations to ensure disputes are heard fairly.

The legal principle established is therefore clear: 

• The sixty-day period under section 34 of the Small Claims Court Act is directory and aspirational, not jurisdictional. Expiry of the statutory timeline does not automatically divest the Small Claims Court of jurisdiction, provided parties’ rights to be heard and access to justice are safeguarded. 

Additionally, the issuance of interim guidelines reinforced the institutional role of the Small Claims Court, ensuring its processes align with constitutional imperatives of fairness, efficiency, and accessibility. 

10. Conclusion / Observations 

This decision clarified the place of statutory timelines within Kenya’s legal framework, particularly in the context of subordinate courts. For Biosystems Consultants, the ruling preserved its claim despite the lapse of statutory time, ensuring it would still be heard and determined on the merits. For Nyali Links Arcade Limited, the ruling foreclosed reliance on procedural technicalities to evade substantive adjudication. 

At the systemic level, the judgment fortified the institutional authority of the Small Claims Court by affirming its jurisdiction beyond the statutory sixty-day period and equipping it with interim practice guidelines to streamline its operations. Doctrinally, it established an important principle: statutory deadlines must be applied consistently with constitutional guarantees of justice, preventing abuse of process and shielding litigants from prejudice caused by delays beyond their control. 

The case therefore stands as a reaffirmation of Kenya’s constitutional ethos: that access to justice and substantive resolution of disputes must not be thwarted by rigid technicalities, particularly where subordinate courts are concerned.