Muthoga v Habib Zurich Finance (K) Ltd & another (Civil Appeal 50 of 2010) [2016] KECA 592 (KLR)
The bottom line
#Kenya's Court of Appeal cut interest on refunded court money, ruling that delays caused by the courts themselves should not be charged to litigants.
What this practically means
#Executive summary
#Key legal issues
#Entitlement to interest on a restituted sum under Section 91 of the Civil Procedure Act
The Judge correctly awarded interest on the restituted sum, following the principle in Rodger v Comptoir d'Escompte de Pois that money withheld under a reversed judgment must be restored with interest.
Section 91(1) obliges the court, on application, to make restitution placing parties in the position they would have occupied but for the reversed decree. Guided by Mulla's Code of Civil Procedure and Lord Cairns' judgment in Rodger v Comptoir, the court held that a party enjoying money under a reversed judgment must return it with the ordinary fruits of money; the respondents' authority, Westmont Power, supported interest at court rates on restituted sums.
Allocation of interest for delay caused by the court
Interest for the 15-year delay was equitably apportioned: the appellant bears interest for 9 years (3-year normal disposal period plus half of the 12-year delay); interest for the other half is not payable.
Neither party was to blame for the delay; the 15-year delay was attributable to the court. Applying actus curiae neminem gravabit and the principle of in pari causa, the court held the parties should suffer equally for the court-caused delay, hence splitting the 12-year delay period between them and adding the three years a normal disposal would have taken.
Applicability of the in duplum rule
The statutory in duplum rule under Section 44A of the Banking Act applies only to formal loans by financial institutions and does not apply to interest under a court order accruing after the order is made, nor to restitutionary interest.
Pelican Investment Ltd had refused to import the common-law in duplum rule into Kenya; it was later introduced by the Banking (Amendment) Act No. 9 of 2006. Section 44A(4) expressly excludes interest under a court order accruing after the order. The restitutionary interest here was court-ordered, so the statutory cap did not limit it, though the equities of delay were considered separately.
Whether the High Court could award costs already determined by the Court of Appeal
The High Court had no jurisdiction to award costs the Court of Appeal had already dealt with in Civil Appeal No. 144 of 1991; that part of the ruling was set aside, with each of the appellant and 1st respondent bearing their own costs and the 1st respondent bearing the 2nd respondent's costs.
The Court of Appeal, differently constituted, had expressly ordered that the appellant and 1st respondent bear their own costs and that the 1st respondent pay the 2nd respondent's costs. Ransley J was bound by that determination; the only costs he could properly award were those of the restitution application before him.
Legal principles established
#- Where a decree is varied or reversed, Section 91(1) of the Civil Procedure Act confers a discretion on the court to order restitution of the decretal sum with interest, even where the appellate decree is silent on interest.
- Interest on a restituted sum is discretionary and must be exercised judiciously; interest attributable to delay caused by the court itself should not be visited on the party whose money was refunded (actus curiae neminem gravabit).
- A subordinate judge is bound by a prior determination of the Court of Appeal on costs and may not award costs already dealt with by the appellate court.
Court orders
#- 1.Interest on the restituted sum reduced from Kshs.4,034,831/= to Shs.2,420,098/=, the appellant to pay interest for 9 years (half of the 12-year court-caused delay period excluded)
- 2.The order of the High Court awarding the 1st respondent Kshs.215,000/= as costs set aside; the appellant and the 1st respondent shall each bear their own costs
- 3.The 1st respondent shall bear the costs of the 2nd respondent
- 4.Each party shall bear its own costs of the appeal
- On appeal from
- High Court of Kenya, Nairobi
- H.C.C.C. No. 3008 of 1984
- Jurisdiction invoked
- First appeal to the Court of Appeal against a ruling of the High Court (Court of Appeal Act jurisdiction; the judgment does not invoke a specific article)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (6)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Muchiri v Kuria (Environment and Land Miscellaneous Case E023 of 2025) (Environment and Land) [2026] KEELC 2893 (KLR)[2026] KEELC 2893 (KLR)14 May 2026
- Kuronoi v Jitahidi Milele Investment Limited & 5 others (Environment and Land Miscellaneous Application E018 of 2024) (Environment and Land) [2025] KEELC 6578 (KLR)[2025] KEELC 6578 (KLR)2 Oct 2025
- Lilian Sayo Agola v Jacob Wafula Musungu [2018] KEELC 75 (KLR)[2018] KEELC 75 (KLR)31 Jul 2018
- Commissioner of Income Tax v Pan African Paper Mills (EA) Ltd (Civil Appeal 29 of 2005) [2018] KECA 585 (KLR)[2018] KECA 585 (KLR)25 May 2018applied
- Baobab Beach Resort & Spa Limited v Duncan Muriuki Kaguuru & another [2014] KECA 326 (KLR)[2014] KECA 326 (KLR)10 Jun 2014applied
- Lawrence Muchina Ngugi v Republic [2014] KECA 89 (KLR)[2014] KECA 89 (KLR)17 Jan 2014followed
Cite this brief
#Cite this brief
Caselaw, "Muthoga v Habib Zurich Finance (K) Ltd & another (Civil Appeal 50 of 2010) [2016] KECA 592 (KLR)", Case Analysis (2016). Civil Appeal No. 50 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/592/eng@2016-05-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.