Milimani Commercial Court. The court continues to face numerous challenges such as backlog of cases. PHOTO | FILE
Trade disputes have tied up more than Sh389 billion in the commercial division of the Milimani High Court, as judges struggle to release money into Kenya’s economy which is ailing from a cash-flow shortage, data seen by the Nation shows.
Data from the Milimani High Court’s commercial and tax division shows that traders have become more litigious, with the number of disputes spilling into the courts shooting up, even as the Judiciary pushes more litigants towards mediation and alternative dispute resolution mechanisms.
The data covers only the commercial and tax division of the Milimani High Court, which means the total figure in all courts across the country is much higher.
Between 2019 and 2024, a total of 15,485 cases were filed at the commercial and tax division of the Milimani High Court, with a value of Sh1.168 trillion – nearly one-third of Kenya’s current budget.
Judges have concluded 12,812 cases in those five years, releasing Sh779 billion into the economy.
The division presides over commercial disputes, appeals (from the chief magistrate’s commercial court, arbitration, and tax tribunal), insolvencies, bankruptcies, and commercial petitions.
The data shows that the commercial and tax division had a 75 per cent success rate as of December 2024.
The 2,673 pending cases have a value of Sh389 billion. In 2024, there were 3,186 cases filed in Milimani’s commercial court, the highest number in a single year over the review period.
However, 2023 recorded the highest value of cases filed in one year over the review period. As of December 2023, there were 2,894 commercial cases filed with a total value of Sh643.3 billion.
Trade disputes accounted for 1,907 cases in the division in 2024. Tax appeals totaled 388, while insolvency cases constituted 276 cases.
“The total number of filed cases has increased from 2,159 in 2019 to 3,186 in 2024, indicating a growing workload,” the report states.
“The commercial miscellaneous and commercial suit categories dominate filings, accounting for over 70 percent of the caseload. Other notable case types include tax appeals and commercial arbitration, with steady growth since 2020, reflecting the evolving legal priorities and financial stakes.”
More businesses are turning to the courts for dispute resolution, and judges are now struggling to keep up with the litigious culture on account of staffing shortages.
Anti-Finance Bill protests
Last week, the Judicial Service Commission (JSC) cancelled a recruitment exercise that was expected to hire 11 Court of Appeal judges and five High Court judges.
The cancellation followed a turnaround by the Executive and Legislature, which last year promised to support the Judiciary in increasing the number of judges across the country.
Following the promise, the JSC advertised the jobs in January 2022. Following the 2024 anti-Finance Bill protests, President William Ruto directed all State institutions to implement austerity measures, which has now affected hiring by many government bodies.
The High Court in Milimani was expected to have three new judges in 2025 to reduce the backlog. But the budget cuts have now dealt that plan a blow.
The data from the Milimani commercial court further shows that traders are yet to fully embrace Court Annexed Mediation nine years into the initiative introduced by the Judiciary as an alternative dispute resolution mechanism.
Court Annexed Mediation was introduced in 2016 following budget and logistics support from the International Development Law Organisation and the Kingdom of Netherlands.
The programme was piloted in the commercial and family divisions of the Milimani High Court.
When cases are filed in the two divisions, judges review the disputes and determine whether to refer them to mediation or let litigation determine a winner.
By January 9, 2025, the courts had referred 818 cases to mediation, with a total value of Sh75.419 billion.
Since 2016, 208 cases have been resolved, and Sh5.095 billion released into the economy since 2016.
Of those, a full agreement was struck in 139 cases, while partial agreements were reached in 25 cases. Consent, to end disputes, was reached in 44 cases.
In 336 cases, no agreement was reached and the disputes evolved into court cases.
Parties failed to comply with mediation requirements in 67 cases, while 75 cases were terminated.
In 2024, mediation resolved cases with a total value of Sh1.6 billion, the second highest in the five-year review period.
The highest amount released to the economy through mediation in a single year was Sh2.2 billion, in 2022.
“It is advisable for litigants to utilise court-annexed mediation as a means to expedite the release of the Sh389 billion currently tied up in court. This will have a positive impact on the economy as commerce will be encouraged to take root. The cost of mediation is also minimal for the parties making it an affordable exercise,” the report further states.
In 2020, there were no cases resolved through mediation, a result of the partial economic shutdown ordered by President Uhuru Kenyatta to limit the spread of the coronavirus.
The internal report recommends increasing the number of judges sitting in the commercial division and referring more cases to mediation and other alternative dispute resolution mechanisms such as arbitration and neutral evaluation.
Court-annexed mediation has in the past been credited for aiding Kenya’s standing in the World Bank’s ease of doing business index.
