An unpaid invoice is not a lost one. Kenyan law gives a creditor a clear sequence of routes to recover a debt — from a firm demand letter, through negotiation, mediation or arbitration, to a court judgment or an insolvency petition. Which route fits depends on the size of the debt, whether it is genuinely disputed, and how long it has gone unpaid. This guide sets out the options, the right court for each claim, the timelines, and the costs.
At a glance
- Contract debts must be sued on within six years; after that, the claim is time-barred.
- Most debts settle before court — a demand letter and negotiation resolve the majority.
- A statutory demand is the fastest lever for an undisputed debt: ignore one for 21 days and a company is presumed insolvent.
- Value decides the court — the Small Claims Court up to KES 1 million, the Magistrates’ Courts up to KES 20 million, the High Court above that.
- A successful creditor can usually recover costs and interest on top of the principal.
How long you have to act: the limitation clock
Time is the first thing to check, because it can end a claim before you file. Under section 4(1) of the Limitation of Actions Act (Cap 22), an action founded on contract must be brought within six years of the date the cause of action accrued — for most debts, the day payment fell due and was not made. A claim in tort has a shorter window of three years under section 4(2). Miss the deadline and the debt still exists, but the courts will not enforce it. A written acknowledgment of the debt, or a part-payment, can restart the clock — a point worth checking before you assume an old debt is beyond recovery.
Before court: demand, negotiation and ADR
Most recoveries never reach a courtroom. A clear demand letter — stating the sum, the basis of the claim and a deadline to pay — resolves a large share of commercial debts. It also creates the paper trail a court will later expect to see, and it flushes out any genuine dispute early, before you spend on court fees. Where a debtor concedes but cannot pay in full, a documented repayment plan or settlement agreement is usually better than litigation; it is cheaper, faster, and preserves the commercial relationship.
Where negotiation stalls, alternative dispute resolution can still keep the matter out of a full trial. The courts now refer many suitable disputes to Court-Annexed Mediation under the Civil Procedure (Court-Annexed Mediation) Rules, 2022, as part of ordinary case management. Where the contract contains an arbitration clause, the dispute instead proceeds under the Arbitration Act, 1995, and the resulting award is enforceable as a decree. For a straightforward, undisputed debt, however, ADR is usually unnecessary — a demand or a statutory demand is quicker. Our litigation and arbitration FAQ covers the ADR routes in more detail.
Choosing the right court
When litigation is unavoidable, the value of the debt decides the forum, and filing in the wrong court wastes both time and fees. The Small Claims Court handles claims up to KES 1 million under section 12(3) of the Small Claims Court Act, 2016, and must determine a claim within 60 days of filing (section 34(1)) — parties can appear without an advocate. The Magistrates’ Courts take mid-value claims, with limits set by the rank of the magistrate under section 7 of the Magistrates’ Courts Act, 2015, up to KES 20 million before a Chief Magistrate. The High Court has unlimited pecuniary jurisdiction and hears the largest and most complex claims.
| Forum | Value of claim | Typical speed | Best for |
|---|---|---|---|
| Small Claims Court | Up to KES 1 million | Determined within 60 days of filing | Simple, low-value, largely undisputed debts; no advocate required |
| Magistrates’ Courts | Up to KES 20 million (by magistrate’s rank) | Several months to a year-plus | Mid-value commercial debts |
| High Court (Commercial & Tax Division) | Above KES 20 million (unlimited) | Longer; complex case management | High-value or complex claims, or where equitable relief is sought |
| Statutory demand → insolvency | KES 100,000+ (company) / prescribed level (individual) | 21-day demand, then petition | Clear, undisputed debts where leverage is the goal |
The court process and enforcement
A suit begins with a plaint setting out the claim and the sum owed; once it is filed and served, the debtor has a set period to enter appearance and file a defence. Where the debt is a fixed sum and the defence is thin, the creditor need not wait for a full trial — Order 36 of the Civil Procedure Rules, 2010 allows an application for summary judgment on a “liquidated demand” once the defendant has appeared, which can compress a claim from years to months.
Winning is not the same as being paid. An unsatisfied judgment is enforced through execution — the attachment and sale of the debtor’s property, or garnishee proceedings that intercept money a third party such as a bank owes the debtor. The same enforcement machinery applies when enforcing a foreign judgment registered in Kenya. The judgment also carries interest: section 26 of the Civil Procedure Act (Cap 21) lets the court award interest from the date of suit until payment, and where a decree is silent on post-judgment interest, section 26(2) deems it to run at 6% per year. Identify the debtor’s assets early — a judgment is only as good as the assets available to satisfy it.
Statutory demands: pressure without a trial
For an undisputed debt, a statutory demand can be more powerful than a suit, because it puts the debtor’s solvency in issue. Against a company, section 384 of the Insolvency Act, 2015 lets a creditor owed KES 100,000 or more serve a written demand; if the company fails to pay within 21 days, it is deemed unable to pay its debts under section 384(1)(a) — the trigger for a liquidation petition. Against an individual, section 17 allows a bankruptcy petition once a statutory demand has gone unmet for 21 days, provided the debt meets the prescribed bankruptcy level. Because the consequence is insolvency, the tool is best reserved for debts that are genuinely beyond argument — a debtor who can show a real dispute may have the demand set aside, and misusing it for a disputed debt can be treated as an abuse of process. Where the debtor is already distressed, our guide to insolvency and restructuring in Kenya sets out what follows a petition.
What debt recovery costs — and what you can recover
Cost scales with the size and complexity of the claim. Court filing fees are assessed largely by the value of the debt, and advocates’ fees for contentious work follow the Advocates (Remuneration) Order, which sets the scale a court uses when it assesses costs. The better news is on recovery: a successful party is usually awarded costs, which shifts much of the litigation expense to the losing debtor, and interest under section 26 runs on top of the principal. Interest and costs together often push the real recovery above the face value of the debt — a strong reason not to write an ageing invoice off too quickly.
What you should do now
For businesses and lenders
Check the age of the debt against the six-year limitation period before anything else, then assemble the paper trail — contract, invoices, delivery notes and any written acknowledgment. Send a clear, dated demand letter and keep proof of service. For an undisputed debt over KES 100,000 owed by a company, weigh a statutory demand before suing. Above all, identify the debtor’s assets early, so any judgment can actually be enforced.
For SMEs chasing smaller debts
For a liquidated claim of KES 1 million or less, the Small Claims Court is usually the fastest and cheapest route: no advocate is required, and the court must determine the claim within 60 days of filing. Keep your contract and invoices in order, and be ready to prove service of your demand.
Frequently asked questions
Q1. How long do I have to sue on a debt in Kenya?
Six years for a debt founded on contract, running from the date the cause of action accrued (section 4(1) of the Limitation of Actions Act, Cap 22); three years for a claim in tort (section 4(2)). A written acknowledgment of the debt or a part-payment can restart the six-year clock.
Q2. Which court should I file a debt claim in?
It depends on the value. Claims up to KES 1 million go to the Small Claims Court; mid-value claims up to KES 20 million go to the Magistrates’ Courts (by the rank of the magistrate); larger and more complex claims go to the High Court, which has unlimited pecuniary jurisdiction.
Q3. What is a statutory demand, and when should I use it?
It is a formal written demand for payment that puts the debtor’s solvency in issue. For a company owed KES 100,000 or more, an unpaid demand after 21 days deems the company unable to pay its debts under section 384 of the Insolvency Act, 2015, opening the door to a liquidation petition. Use it only for debts that are clear and undisputed; a debtor who shows a genuine dispute can have the demand set aside.
Q4. Can I recover my legal costs and interest?
Usually, yes. A successful party is generally awarded costs, and the court may award interest on the principal from the date of suit until payment under section 26 of the Civil Procedure Act (Cap 21); where a decree is silent on post-judgment interest, it is deemed to run at 6% per year.
Q5. How fast is the Small Claims Court?
Fast by design. Section 34(1) of the Small Claims Court Act, 2016 requires the court to determine a claim within 60 days of filing, and parties may appear without an advocate — which makes it the preferred forum for straightforward debts of KES 1 million or less.
How OLM Law can help
OLM Law Advocates’ dispute resolution team recovers commercial debts for banks, businesses and lenders across Kenya — from demand-stage negotiation and statutory demands to litigation, insolvency petitions and enforcement. We advise on the fastest viable route for each debt and protect your position where a debtor’s solvency is in doubt. Contact us at [email protected] to discuss a specific debt.
Sources and authorities
Limitation of Actions Act (Cap 22), s. 4(1)–(2). | Small Claims Court Act, 2016, s. 12 and s. 34. | Magistrates’ Courts Act, 2015, s. 7. | Civil Procedure Act (Cap 21), s. 26; Civil Procedure Rules, 2010, Order 36. | Insolvency Act, 2015 (No. 18 of 2015), s. 17 and s. 384. | Civil Procedure (Court-Annexed Mediation) Rules, 2022. | Arbitration Act, 1995 (No. 4 of 1995). | Advocates (Remuneration) Order. | All statutes available via kenyalaw.org.
Disclaimer: This article is general commentary on Kenyan law as at September 2026 and does not constitute legal advice. Specific situations require specific advice. No advocate-client relationship is created by reading this article. OLM Law Advocates LLP accepts no liability for action taken in reliance on it.
About the author
John Maina
Partner · Advocate of the High Court of Kenya
John is a Partner at OLM Law Advocates LLP, advising corporations, banks and high-net-worth clients on corporate and commercial law, M&A, banking and finance, real estate and dispute resolution across Kenya and East Africa.
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