Aamrin v Progressive Credit Limited (Civil Suit E423 of 2025) [2025] KEMC 167 (KLR)
The bottom line
#A Nakuru court allowed a lender to continue with a property auction because the borrower was clearly in default and Kenya's statutory interest cap did not apply to that lender.
What this practically means
#Executive summary
#Key legal issues
#Whether the applicant established a prima facie case for a temporary injunction
No prima facie case was established; the uncontroverted loan statement proved substantial breach of the loan contract, including issuance of bounced cheques, so the penalties and interest under the agreement appeared valid
The court applied the Giella v Cassman Brown principles as restated in Nguruman Limited v John Bonde Nielsen. A prima facie case requires an apparent infringement of a legal right calling for rebuttal. The plaintiff did not deny the loan agreement, its terms or her default. The loan statement was unchallenged and demonstrated breach, so no triable issue on the debt or the contractual interest arose at this stage.
Whether the in duplum rule under section 44A of the Banking Act caps the interest demanded
Section 44A does not apply because there was no evidence that the defendant is a bank, a gazetted financial institution or a deposit-taking institution; interest is therefore governed by the contract
Following Momentum Credit Limited v Kabuiya (Majanja J), section 44A only applies to banks and financial institutions that accept deposits from the public. The respondent was not shown to be a deposit-taking or gazetted institution. The court declined to follow the 'on the face of it' suggestion in Francis Mbaria Wambugu v Jijenge Credit Limited, which was only an interlocutory determination that did not consider the wording of the statutes.
Whether the interest and penalties demanded were unconscionable or oppressive such that the court should interfere
No; the substantive unconscionability argument rested on breach of section 44A, which was held inapplicable, and the court cannot rewrite the contract
The court adopted the Court of Appeal's position in Margaret Njeri Muiruri v Bank of Baroda (Kenya) Limited that a court cannot rewrite a contract with regard to interest, though it may refuse to enforce unconscionable or oppressive terms. Since the applicant did not deny the agreement or her default, the unconscionability claim, founded on section 44A, failed and the respondent could enforce the contractual terms.
Whether the applicant demonstrated irreparable harm and balance of convenience
Having failed on the prima facie limb and approached equity with unclean hands, the applicant had zero probability of irreparable loss and the application failed
The court reasoned that the consequences of breach were known to the applicant when she charged the suit property as security. Because she expressly admitted default by non-payment and bounced cheques, no irreparable loss would follow refusal of the injunction, and no separate analysis of the balance of convenience was necessary.
Legal principles established
#- Section 44A of the Banking Act (in duplum rule) does not apply to non-deposit-taking lending institutions that are neither banks nor gazetted financial institutions; interest in such relationships is governed by contract
- A court cannot rewrite a contract between parties, including with regard to interest, though it may interfere with unconscionable, unfair or oppressive contracts
- A litigant in substantial breach of a loan contract who seeks equitable relief approaches equity with unclean hands
Court orders
#- 1.The application dated 12th May 2025 is dismissed for not having met the threshold for the grant of a temporary injunction or any of the other orders sought
- 2.The defendant/respondent is awarded the costs of the application
- Jurisdiction invoked
- Original civil jurisdiction of the magistrates' court; motion brought under Order 40, rules 1, 2 and 4 of the Civil Procedure Rules, 2010 and section 3A of the Civil Procedure Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Aamrin v Progressive Credit Limited (Civil Suit E423 of 2025) [2025] KEMC 167 (KLR)", Case Analysis (2025). Civil Suit No E423 of 2025. Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2025/167/eng@2025-07-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.