Giro Commercial Bank Ltd v Eccon Construction & Engineering Ltd & another (Civil Appeal 93 of 2004) [2014] KECA 556 (KLR)
The bottom line
#Kenya's Court of Appeal ruled that a company's mortgage sealed before its directors is properly witnessed, reviving the bank's enforcement rights.
What this practically means
#Executive summary
#Key legal issues
#Whether the attestation requirement in section 59 of the Transfer of Property Act applies to a corporation executing a mortgage by affixation of its common seal
The requirement does not apply so as to require further attestation of the signatures of the officers witnessing the affixation of the company's seal; the directors witnessing the sealing constitute sufficient attestation.
The purpose of attestation is to protect the mortgagor by confirming that the mortgagor freely and consciously signed the instrument. A company signs through its seal; when the seal is affixed and witnessed by two directors, they bear witness to the authenticity of execution and the company's understanding of its consequences. Requiring the witnesses' own signatures to be further witnessed confuses the directors with the company itself and produces an absurdity. Statutory analogues (RTA s.58(3), Law of Contract Act s.3(6)(b)) exclude corporate sealed instruments from further attestation, and the court invoked Article 159 to refuse to invalidate the instrument on such a technicality.
Whether the appeal could be determined without perusing the 1st respondent's articles of association
It could; the signing of the instrument by the company was never in issue, only the meaning of attestation under section 59.
The articles were relevant only to whether the instrument was signed as prescribed therein. The 1st respondent did not deny that the instrument was properly signed by affixation of the seal witnessed by two directors; it contended only that its signature had not been attested. The question was purely the meaning and import of the requirement in section 59 that the mortgagor's signature be attested by at least two witnesses, a question of law not dependent on the articles.
Legal principles established
#- Where a company executes a mortgage instrument by affixing its common seal in the presence of the requisite officers (directors/company secretary), those officers witnessing the affixation of the seal satisfy the requirement of attestation by two witnesses under section 59 of the Transfer of Property Act; no further attestation of their signatures is required.
- Requiring further witnesses to the signatures of officers who witnessed the affixation of a company's seal would be to authenticate that which is already authenticated and would render cumbersome business transactions.
Court orders
#- 1.Appeal allowed
- 2.Order of Njagi, J. dated 17th September 2003 set aside
- 3.Chamber summons dated 23rd June 2003 dismissed with costs
- 4.Appellant to have costs of the appeal
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 371 of 2003
- Jurisdiction invoked
- First appellate jurisdiction over the High Court (ruling and order dated 17th September 2003)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Kitonga & 2 others v Hashtag Biz Hub Company Ltd (Environment and Land Appeal E036 of 2025) [2026] KEELC 3812 (KLR)[2026] KEELC 3812 (KLR)19 Jun 2026
- Kitonga & 2 others v Hashtag Biz Hub Company Ltd (Environment and Land Appeal 67 of 2019) [2024] KEELC 1598 (KLR)[2024] KEELC 1598 (KLR)14 Mar 2024
Cite this brief
#Cite this brief
Caselaw, "Giro Commercial Bank Ltd v Eccon Construction & Engineering Ltd & another (Civil Appeal 93 of 2004) [2014] KECA 556 (KLR)", Case Analysis (2014). Civil Appeal No. 93 of 2004. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2014/556/eng@2014-05-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.