Air Travel & Related Studies Limited v Equity Bank (Kenya) Limited [2017] KEELC 928 (KLR)
The bottom line
#Kenya's High Court ruled the 2016 banking interest-rate caps do not apply to older loans, allowing the bank to proceed with selling charged property.
What this practically means
#Executive summary
#Key legal issues
#Retrospectivity of the Banking (Amendment) Act, 2016 interest caps
The Act does not apply retrospectively to loan agreements concluded before its commencement on 14th September, 2016
Applying the rule in Municipality of Mombasa v Nyali, legislation affecting substantive rights is not construed retrospectively unless a clear intention is manifested. The Banking Act affects substantive rights of lenders and borrowers and contains no express retrospective provision, so it does not govern the 2015 loan agreement.
Dispute over loan quantum as a ground for injunction against sale
A mere dispute over the amount payable, without more, does not justify restraining a chargee's statutory power of sale
Relying on Priscillah Krobought Grant and the authorities therein, the court held that no evidence showed interest levied above the agreed rate; the IRAC report was premised on the incorrect assumption that the Banking Act was retrospective and therefore of no assistance.
Validity and service of statutory notices under the Land Act, 2012
The plaintiff was duly served with all notices required under sections 90 and 96; any defect in the September 2016 notice was cured by the proper 3-month notice of 6th April, 2016
The notice was sent to the plaintiff's address for service in the charge instrument, was referenced in later letters whose receipt was acknowledged, and the plaintiff admitted receipt of notices in paragraphs 14 and 15 of the plaint, being bound by its pleadings.
Injunction principles on the Giella v Cassman Brown test
The plaintiff failed to meet the threshold of a prima facie case with probability of success and irreparable injury
The court applied Giella v Cassman Brown and Nguruman Limited, holding the burden lay on the plaintiff to show a clear and unmistakable right directly threatened; the material before the court did not meet that standard on a balance of probability.
Legal principles established
#- The Banking (Amendment) Act, 2016 affects substantive rights and is not retrospective absent express legislative intention
- A court cannot re-write a contract between parties; they are bound by its terms unless coercion, fraud or undue influence are pleaded and proved
- A court does not normally grant an injunction to restrain a chargee's statutory power of sale solely on the ground of a dispute as to the amount due
- An interlocutory injunction must bear some relationship with the cause of action pleaded in the plaint; parties are bound by their pleadings
Court orders
#- 1.The Notice of Motion application dated 27th March, 2017 is dismissed
- 2.Costs of the application awarded to the defendant
- Jurisdiction invoked
- Inherent jurisdiction of the High Court over interlocutory applications in a civil suit (contract and land claims); not expressly stated in the judgment.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Air Travel & Related Studies Limited v Equity Bank (Kenya) Limited [2017] KEELC 928 (KLR)", Case Analysis (2017). Notice of Motion dated 27th March, 2017 (ruling delivered 3rd November, 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/928/eng@2017-11-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.