Akoth v Owino (Claim E1087 of 2026) [2026] SCC 163 (KLR)

7. It was not denied that the respondent took out a loan of Kshs. 200,000/=. Indeed, there was an unequivocal admission of that amount. 8. As regards the claim for interest of Kshs. 60,000/=, I do note that the agreement produced by the claimant was not executed by either party and was thus not binding on the respondent. More importantly, the loan advanced was Kshs. 200,000/= and attracted interest of Kshs. 15,000 per month was applied, translating to a monthly interest rate of approximately 7.5%, and annual rate of 90%. 9. I do note that the application of such terms over time would lead to a rapid and disproportionate escalation of the debt beyond the principal sum advanced. Such rates are capable of producing a debt that bears no reasonable relationship to the amount borrowed and would result in an oppressive burden upon the borrower.Although the contractual charge does not exceed the principal advanced, the Court finds that the implied annualized rate of approximately 90% is excessive and unconscionable in the circumstances of this case. 10. I say so noting that the rationale underlying the in duplum rule is to guard against the excessive accumulation of interest and charges and to prevent a lender from recovering amounts that are grossly disproportionate to the principal debt. In the circumstances of this case, enforcement of the impugned interest would ofiend the principles of fairness, equity and good conscience that guide the Court in the enforcement of contractual obligations. 11. Even where parties are generally bound by the terms of their contract, this Court retains discretion to decline enforcement of terms that result in unjust, oppressive, or unconscionable outcomes. In the circumstances, the Court finds the claimed interest, even if proven, would be disproportionate and inequitable. The Court therefore declines to enforce the implied interest rate thus the claim for Kshs. 60,000/= is not awardable. The collection costs of Kshs. 20,000/= are also denied noting that such costs are ordinarily recovered by way of an award for costs of the claim. 12. In the end, I find that the claim is partly successful. As such, I hereby order as follows: - 13. 1. Judgment is hereby entered in favour of the claimant as against the respondent for the sum of Kshs. 200,000/= being the balance on the principle loan amount. 2. The total amount shall attract interest at court rates from the date of filing suit until payment in full. 3. The claimant is awarded costs assessed at Kshs. 20,000/= The respondent is awarded 30 days stay of execution. It is so decreed. DATED AND DELIVERED AT NAIROBI VIA CTS THIS 17TH DAY OF JULY 2026 HON. GLADYS .W. KIAMAH RESIDENT MAGISTRATE/ADJUDICATOR https://new.kenyalaw.org/akn/ke/judgment/scc/2026/163/eng@2026-07-17 2

page 2 of 2