Habib Bank A. G. Zurich v Pop-In (Kenya) LTD. & 3 others [1995] KECA 15 (KLR)
The bottom line
#Kenya's Court of Appeal ruled that borrowers who admit default cannot stop a property sale just because they dispute how much the bank is demanding.
What this practically means
#Executive summary
#Key legal issues
#Whether a dispute over the amount owed under a mortgage justifies an injunction against exercise of the statutory power of sale
No; where default is admitted and statutory notice has been served, the mortgagee cannot be restrained merely because the exact amount due is disputed.
Kwach JA reiterated the settled position, drawing on Pharmac Kanji Shah, Lavuna and Halsbury's Laws of England, that equity will not restrain a chargee exercising a valid statutory power of sale merely because the chargeor disputes the quantum of the debt. The respondents admitted default and service of the statutory notices, so the judge's contrary view was a misapprehension of the law producing a perverse decision.
Whether interest was chargeable on the loan under the debenture and charges
Yes; the securities expressly provided for interest, and the judge's contrary finding was totally erroneous both on the terms of the securities and as a matter of commercial practice.
Although the securities were in standard form, Shields J accepted the respondents' submission that interest was not chargeable. Kwach JA held this was plainly wrong on the express terms of the securities and contrary to commercial practice, undermining the judge's conclusion that the demand was excessive and that the chargors had a prima facie case.
Whether the company could lawfully be made to pay the receiver and manager's remuneration
Yes; under the standard agency clause in the debenture, the receiver and manager is the agent of the company, which bears his remuneration.
The judge had questioned the legality of requiring the first respondent to pay the receiver's remuneration. Kwach JA explained that the debenture contained the standard clause making the receiver the agent of the company; the judge's conclusion rested on the clause not having been brought to his attention. This formed part of the court's view that the judge misapprehended the law.
Legal principles established
#- A court should not grant an injunction restraining a mortgagee from exercising its statutory power of sale solely on the ground that there is a dispute as to the amount due under the mortgage, where default is admitted and a valid statutory notice has been served.
- A receiver and manager appointed under a standard debenture is the agent of the company, and the company may lawfully bear the receiver's remuneration.
Court orders
#- 1.Appeal allowed
- 2.Order of Shields J granting the temporary injunction set aside
- 3.Substituted order dismissing the application for injunction brought by the second, third and fourth respondents
- 4.Costs of the injunction application to the appellant
- 5.Costs of the appeal granted to the appellant
- On appeal from
- High Court of Kenya
- Jurisdiction invoked
- First appeal to the Court of Appeal against an interlocutory ruling of the High Court (specific statutory basis not stated in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Skycrapers Africaway Company Limited & 1 other v First Community Bank Limited & 1 other[2026] KECA 1615 (KLR)31 Jul 2026
Cite this brief
#Cite this brief
Caselaw, "Habib Bank A. G. Zurich v Pop-In (Kenya) LTD. & 3 others [1995] KECA 15 (KLR)", Case Analysis (1995). Civil Appeal (High Court ruling of Shields J dated 27 October 1986). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1995/15/eng@1995-01-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.