Sisal Enterprises Limited v NC Bank Limited & Another
The bottom line
#Disputing the interest rate on a loan is generally not enough to legally stop a bank from selling your collateral.
What this practically means
#Executive summary
#Key legal issues
#Whether a disputed debt or disputed interest justifies an injunction against a chargee's statutory power of sale
No. The Company admitted its indebtedness in several letters; a dispute as to the amount of interest does not ground an injunction.
The court found uncontroverted evidence of indebtedness, noting the Company's written admissions. It held that interest disputes go only to the quantum of the debt, citing Mrao Ltd v First American Bank of Kenya Ltd. It also found the pleading on illegal interest vague and embarrassing for not identifying the contractual or statutory provisions breached.
Whether the Bank complied with the statutory notice requirements under sections 90 and 96 of the Land Act, 2012
Yes. The Bank produced the statutory notices and certificates of posting, which the Company did not controvert, so no prima facie case arose from the alleged non-service.
The Bank's affidavit evidence included the 90-day statutory notice dated 9th July 2019 and the 40-day notification of sale, sent by registered post and supported by certificates of posting. The Company's bare denial did not displace this documentary evidence, so the allegation of premature sale failed at the prima facie stage.
Legal principles established
#- A court cannot restrain a chargee from exercising its statutory power of sale merely because the debt is disputed; a dispute as to amount is insufficient.
- The three Giella v Cassman Brown conditions for an interlocutory injunction are separate, distinct and sequential hurdles.
Court orders
#- 1.The Notice of Motion dated 4th April 2020 is dismissed with costs to the defendants
- 2.The interim injunction granted on 14th February 2020 is discharged
- 3.The sum of Kshs. 500,000/- deposited in court shall be released to the 1st defendant to settle the costs of the postponed auction, and any balance credited to the plaintiff's loan account
- Jurisdiction invoked
- Original civil jurisdiction of the High Court; interlocutory application under Order 40 rule 1 of the Civil Procedure Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Sisal Enterprises Limited v NC Bank Limited & Another", Case Analysis (2020). Not stated in the judgment (plaint dated 4th February 2020; Notice of Motion dated 4th February 2020). Source:
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.