Thiongo v Chase Bank (In Liqudation) & 2 others (Environment and Land Case 371 of 2018) [2026] KEMC 186 (KLR)
The bottom line
#A Nakuru court dismissed a borrower's suit because his unsigned loan term sheet was not binding, and he failed to prove the bank misdirected the funds.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the plaintiff should repay the loan amount owed to the 3rd defendant
- 2.Whether there was a breach of contract by the 3rd defendant
- 3.Whether the plaintiff is entitled to the reliefs sought, including release of the title deed, discharge of charge and damages
Key legal issues
#Whether the Indicative Term Sheet was binding on the parties
The term sheet was not binding and unenforceable because it was not signed by any party
The plaintiff's case was premised on the Indicative Term Sheet dated 01/09/2014, which referenced the construction loan being remitted to Messrs. BM & Khans (EA) Ltd and farm inputs overseen by Premier Seeds. The court agreed with the defendants' submission that, as the document was unsigned, it could not bind the parties.
Whether the 3rd defendant breached the contract by unilaterally revising disbursement terms
No breach was established; the loan was disbursed to the plaintiff, who then transferred the funds to Dow Vet Agro Vet, with no evidence the bank did the transfer and no tripartite agreement exhibited
The plaintiff alleged the 3rd defendant unilaterally disbursed the loan to the 2nd defendant instead of B.M. & Khan's (EA) Ltd. The court found the loan was in fact disbursed to the plaintiff, who transferred it to Dow Vet Agro Vet per PEXH No. 10. No evidence supported the claim of unilateral transfer, and no tripartite agreement between the plaintiff, the banks and the 2nd defendant was exhibited.
Whether the plaintiff was entitled to the reliefs sought
The suit was dismissed as the plaintiff remained a debtor to the 3rd defendant
It was undisputed that the plaintiff borrowed Kshs. 345,000 from the 1st and 3rd defendants, the loan was disbursed and secured by a charge over the suit property, and the amount had not been repaid. Having failed to prove breach, the plaintiff remained liable and was not entitled to any of the reliefs claimed.
Legal principles established
#- An unsigned indicative term sheet is not binding and hence unenforceable
- A party alleging unilateral diversion of loan disbursement bears the burden of proving it; absence of evidence that the bank effected the transfer defeats the claim
Court orders
#- 1.Dismissal of the plaintiff's suit
- 2.Costs of the suit to the 3rd defendant
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Original civil jurisdiction of the magistrates' court (not expressly cited in the judgment)
Relief refused
#All reliefs sought in the Further Amended Plaint (declaration of non-liability, release of title deed, discharge of charge, special and general damages, CRB delisting, exemplary damages, interest)
The plaintiff's case lacked merit; the loan remains owing and no breach by the 3rd defendant was proved
Costs
Suit dismissed with costs to the 3rd defendant
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
the Indicative Term Sheet and Conditions exhibited herein as PEXH. NO 3 is not binding and hence unenforceable for having not been signed by any party
There was no evidence tendered to support the plaintifi's claim that the 3rd defendant unilaterally did the transfer
the plaintifi's case lacks merit for the above reasons and the plaintifi is therefore not entitled to the reliefs as he is still a debtor to the 3rd defendant. This suit is there for dismissed with costs to the 3rd defendant.
Issues in the judgment
#The judgment is dated 26th June 2026, which post-dates the plaintiff's cross-examination date of 02/10/2025 but the dates as printed contain apparent anomalies ('DATED,SIGNED AND DATED') and the year 2026 appears inconsistent with the stated hearing timeline
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Thiongo v Chase Bank (In Liqudation) & 2 others (Environment and Land Case 371 of 2018) [2026] KEMC 186 (KLR)", Case Analysis (2026). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2026/186/eng@2026-06-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.