Registered Trustees/Archdiocese of Kisumu v Eco Bank Kenya Limited [2016] KEELC 426 (KLR)
The bottom line
#A Kisumu court allowed the bank to continue recovering its Kshs.275 million debt because the church hid key facts and hadn't proven repayment.
What this practically means
#Executive summary
#Key legal issues
#Whether the Applicant established a prima facie case for an interlocutory injunction
The Applicant did not establish a prima facie case with a probability of success; its claim that the loans were fully serviced was rebutted by the Respondent's documentary evidence showing an outstanding demand of Kshs.275,241,281.52 and continuing arrears.
The Applicant deponed that it had cleared all loan facilities obtained between November 2007 and April 2012, but the Respondent's documentary evidence showed demands for Kshs.275,241,281.52, an auction notice for Kshs.307,810,560.30, and that even after a payment of Kshs.50,000,000 in February 2015 the facilities remained in arrears. The depositions were found to be untrue and at variance with the documents, so the Mrao threshold of a right apparently infringed was not met.
Whether the Applicant's failure to make full disclosure disentitled it to the injunction
The Applicant failed to make full disclosure of the loan negotiations and two restructurings and its continued default, and therefore could not obtain any advantage from the proceedings.
The court found the Applicant did not disclose the negotiation sessions with the Respondent that resulted in two restructurings of the loan facilities, nor that it failed to service the restructured facilities within the agreed timelines. Relying on the duty of candour as articulated in Abraham Mutai & 5 others v Paul M. Mutwii, the court held that an applicant who fails to make the fullest possible disclosure cannot obtain any advantage from the proceedings and stands to lose any advantage already obtained.
The validity of the interim orders issued by the Deputy Registrar on 1st September 2015
The interim orders were issued without jurisdiction since the file had been referred to the ELC duty Judge in Eldoret, and were null and void ab initio and set aside.
The Deputy Registrar in Kisumu directed the application to be placed before the ELC duty Judge in Eldoret, but the matter was instead placed before Hon. Moseti (possibly a Deputy Registrar at Eldoret) who granted interim orders in terms of prayer 2. The court found these orders were granted without jurisdiction because the file had been referred to the duty Judge, and that such orders are null and void ab initio, and set them aside.
Legal principles established
#- An applicant for interlocutory relief is under a duty to make the fullest possible disclosure of all material facts, and non-disclosure disqualifies the applicant from any advantage in the proceedings.
- A prima facie case, as defined in Mrao Ltd v First American Bank of Kenya Ltd, requires a right which has apparently been infringed so as to call for an explanation from the opposite party; failure to establish it disentitles the applicant to a temporary injunction.
- Interim orders issued without jurisdiction are null and void ab initio.
Court orders
#- 1.The Applicant's notice of motion dated 31st August 2015 is dismissed with costs.
- 2.The interim orders of 1st September 2015 are set aside.
- 3.The Respondent is at liberty to proceed with the realization of the charged security once the relevant statutory provisions on notices are complied with.
- Jurisdiction invoked
- Environment and Land Court jurisdiction over the charged land parcel Kisumu/Konya/2677 (interlocutory injunctive relief); no specific constitutional or statutory provision cited
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Registered Trustees/Archdiocese of Kisumu v Eco Bank Kenya Limited [2016] KEELC 426 (KLR)", Case Analysis (2016). Not stated in the judgment (notice of motion dated 31st August 2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2016/426/eng@2016-10-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.