Kopo Kopo Inc v Kalee t/a Bei Nafuu Enterptises-Redsoil (Commercial Case E6792 of 2026) [2026] SCC 223 (KLR)

evidence before court. Notably, it was submitted that the respondent repaid Kshs. 123,114/=. The main issue for determination is whether the claimant has proven the claim on a balance of probabilities. 4. The Court of Appeal in Mumbi M'Nabea v David M.Wachira [2016] eKLR while discussing the standard of proof in civil liability claims in our jurisdiction had this to say: “In our jurisdiction, the standard of proof in civil liability claims is that of the balance of probabilities. This means that the Court will assess the oral, documentary and real evidence advanced by each party and decide which case is more probable. To put it another way, on the evidence, which occurrence of the event was more likely to happen than not.” 5. Sections 107, 108 and 109 of the Evidence Act, Chapter 80 of the Laws of Kenya places the burden of proof of a fact on the person who wishes the court to believe in the existence of such fact. As such, the burden of proof lies on the party alleging a fact of which correlative rule is that he who asserts a matter or a fact must prove but he who denies it need not prove it. The party on whom lies the burden must adduce evidence of the disputed facts or failing his contention. Simply put, he who alleges must prove. See Daniel Muthuka Ngui v Bernard Nganda Mutua & another [2019] eKLR. 2|Page JUDGMENT SCCOME6792 OF 2026

page 2 of 6

6. Notably, the fact that the respondent failed to enter appearance or file a defence does not automatically entitle the claimant to judgment. The legal burden of proof remains throughout on the Claimant pursuant to Sections 107 and 109 of the Evidence Act. Even in undefended proceedings, the claimant must adduce sufficient evidence to prove the claim on a balance of probabilities. A default judgment is not a substitute for proof of a claim, particularly where the relief sought is unliquidated or requires evidentiary substantiation 7. In Mweni v Kagai & another (Civil Appeal 17 of 2021) [2022] KEHC 17264 (KLR), the High Court reiterated that a plaintiff must prove his case on a balance of probabilities and is not entitled to judgment merely because the defence has not controverted the evidence. See also Karugi & Another v Kabiya & 3 Others [1987] KLR 347, where the court held that the burden of proof remains with the plaintiff and is not lessened merely because the case is undefended. 8. In the case before me, there was on record sufficient evidence supporting that the respondent applied for and received a loan of Kshs. 305,000/=. There was also proof of disbursement. 9. I do note that the claimant was loaned a total of Kshs. 305,000/=. According to the loan documents, the amount to be repaid was Kshs. 432,649/= within 180 days with a specified daily deduction percentage of 29%. This translates to a charge of approximately Kshs. 127,649/= over a six-month period, equivalent to about 41.85% of the principal amount, or 3|Page JUDGMENT SCCOME6792 OF 2026

page 3 of 6

approximately 7% per month and 84.9% per annum on a simple annualized basis. I do find that the interest rate charged is unconscionable. 10. While 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 Margaret Njeri Muiruri v Bank of Baroda (Kenya) Ltd [2014] eKLR, the Court of Appeal affirmed that courts may intervene where enforcement of contractual terms would result in an unconscionable bargain. Similarly, in National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another [2001] eKLR, the Court observed that although courts do not ordinarily rewrite contracts for parties, intervention may be justified where recognized legal grounds exist. In the present case, the charges levied upon the principal sum are manifestly excessive and disproportionate to the amount borrowed and the duration of the loan. 11. The Court further notes that the rationale underlying the in duplum rule, as embodied in Section 44A of the Banking Act, is to prevent unreasonable accumulation of interest and to guard against unjust enrichment by lenders at the expense of borrowers. Although the claimant is not a bank, the principle remains instructive in assessing whether the charges claimed are fair, reasonable and enforceable. The Court is satisfied that enforcing the contractual interest and related 4|Page JUDGMENT SCCOME6792 OF 2026

page 4 of 6

charges as claimed would visit an unjust and inequitable burden upon the respondent. 12. In Housing Finance Company of Kenya Ltd v Scholastica Nyaguthii Muturi & another [2020] eKLR, Mabeya J. observed that the purpose of the in duplum rule is to curb the excessive accumulation of interest and to protect borrowers from exploitation through oppressive lending practices. The learned Judge noted that the rule is intended to prevent lenders from recovering interest that bears no reasonable relationship to the principal sum advanced. 13. In the circumstances, the Court finds the claimed interest to be disproportionate and inequitable. The Court therefore declines to enforce them. 14. The Court finds it just and reasonable to allow interest on the principal amount of Kshs. 305,000/= at the rate of 18% per annum for the contractual period of six (6) months from 20/8/2024. The amount of Kshs. 123,114/= shall be deducted being the sum already repaid by the respondent. 15. The balance shall thereafter attract interest at court rates from the date of judgment till payment in full. 16. The claimant is awarded costs assessed at Kshs. 10,000/=. 17. The respondent is granted 30 days stay of execution. It is so decreed. DATED and DELIVERED at NAIROBI this 14th Day of August 2026 5|Page JUDGMENT SCCOME6792 OF 2026

page 5 of 6

HON. GLADYS. W. KIAMAH RESIDENT MAGISTRATE/ADJUDICATOR 6|Page JUDGMENT SCCOME6792 OF 2026

page 6 of 6