Mogo Auto Llimited v Nyumbah (Commercial Case E1939 of 2025) [2026] SCC 35 (KLR)
The bottom line
#A Kenyan Small Claims Court cut an asset financier's claim from Kshs 677,381 to Kshs 100,631, capping interest at the principal under the in duplum rule.
What this practically means
#Executive summary
#Key legal issues
#Whether the claimant proved its claim
Partially proved: the loan and default were established, but penalties, the unpaid principal figure, and monitoring and insurance fees were not proved.
The loan of Kshs 400,000 and repayments of Kshs 299,369 were undisputed. The claimant's witness could not point to any clause providing for penalties, and the court could not identify one. The figures for unpaid principal, monitoring fees and insurance fees were not explained through evidence, so the court declined to speculate on the claimant's behalf.
Whether the in duplum rule applies to the claimant
Yes; the rule applies to all money lenders, not only banks, capping recoverable interest at the principal.
Relying on Mabeya J in Mugure & 2 Others v Higher Education Loans Board, the court held that the rule is a matter of public interest and extends to all who lend money. Applying it, the effective interest of 86.4% over 36 months, exclusive of charges, was exploitative, and recoverable interest was limited to the principal advanced.
Whether the claimant is entitled to the reliefs sought
Only partially; judgment entered for Kshs 100,631/= with interest at court rates.
The court acknowledged the respondent remains indebted but found the interest charged disproportionate and oppressive. Balancing the parties' positions, it awarded the admitted balance of Kshs 100,631/=, interest at court rate from the date of the last payment, costs of Kshs 20,000/= and a 30-day stay of execution.
Legal principles established
#- The in duplum rule applies to non-bank lenders, so total interest recoverable shall not exceed the principal amount advanced.
- Courts may refuse to enforce contractual terms that are unconscionable, unfair or oppressive, notwithstanding the general reluctance to rewrite contracts.
Court orders
#- 1.Judgment entered in favour of the claimant against the respondent for Kshs 100,631/=
- 2.Interest on Kshs 100,631/= to accrue at court's rate from the date of the last payment of the loan by the respondent until payment in full
- 3.Costs of Kshs 20,000/= granted to the claimant
- 4.30 days stay of execution
- Jurisdiction invoked
- Small Claims Court jurisdiction over the money claim (Article 50 and the Small Claims Court Act - not expressly cited in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mogo Auto Llimited v Nyumbah (Commercial Case E1939 of 2025) [2026] SCC 35 (KLR)", Case Analysis (2026). Not stated in the judgment (Statement of Claim dated 27th October, 2025). Source: https://new.kenyalaw.org/akn/ke/judgment/scc/2026/35/eng@2026-06-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.