https://new.kenyalaw.org/akn/ke/judgment/kecopt/2026/316

**REPUBLIC OF KENYA** **IN THE CO-OPERATIVE TRIBUNAL AT NYERI** **TRIBUNAL CASE NO. E007 OF 2026** **(Coram: Hon. J. Mwatsama- Chairperson, Hon. B. Sawe- Member, Hon. F. Lotuiya- Member, Hon. M. Chesikaw- Member and Hon. P. Aol- Member.)** **ENDARASHA FARMERS** **COOPERATIVE SOCIETY LIMITED...........................CLAIMANT/APPLICANT** **VERSUS** **WANANCHI DT SACCO** **SOCIETY LIMITED...............................................................1ST RESPONDENT** **KENTRACK AUCTIONEERS..............................................2ND RESPONDENT** **AND** **NYERI COUNTY** **COOPERATIVE OFFICE................................................... INTERESTED PARTY** **RULING OF THE TRIBUNAL** 1. The matter before the Tribunal for determination, is the Notice of Motion application dated 16th April, 2026 filed by the Claimant/Applicant and brought under Order 40, rule 1 (a) and Order 51 Rule 1 of the Civil Procedure Rules 2010 for ORDERS:- 1. SPENT 2. SPENT 3. **THAT** a temporary injunction be issued restraining the Respondents by themselves, their servants, agents and/or employees or whomsoever is acting on their behalf from trespassing onto, selling, transferring or disposing off or in any other way interfering with Motor vehicle registration **KDE 092Y Isuzu Lorry**, and or any other property belonging to the Claimant pending hearing and determination of the suit. 4. **THAT** the costs of this Application be provided for. 1. The application is supported by the grounds on the face thereof and the affidavit of SIMON CHEGE KARANJA sworn on 16th April, 2026. 2. The grounds of the application are that on 9th March 2026, the 2nd Respondent through the instructions of the 1st Respondent repossessed the Claimant’s motor vehicle registration number KDE 092Y Isuzu Lorry, without following the proper procedures and aimed at halting and bringing to a standstill the operations of the Claimant; that the 1st Respondent has refused to share the agreement it entered with the Claimant on the issuance of a loan facility to assist the Claimant in doing business. 3. The Claimant further in the grounds to the application acknowledges that it has loan arrears with the 1st Respondent, which arrears it has been offsetting regularly save for the last three months where: 4. There has been delayed payments by Claimant’s main milk buyer, Kenya Dairy Processors Limited (KDPL) for milk supplied during the months of Juneand part of July 2025, amounting to Kshs 3,747,633, which has adversely affected the Claimant’s cash flow. 5. Reduced milk production by members due to adverse climatic conditions. 6. Increased competition from over ten independent milk traders and major processors such as Brook side and Wakulima Dairy, which has significantly reduced the Claimant’s sales volume. 7. The Claimant avers further in the grounds to the application, thatto address the situation, the Management Committee of the Claimant convened a Special General meeting on 15th August 2025 to seek members’ approval to dispose of some Claimant’s assets. However, after lengthy deliberations and upon the advice of the Sub County Co-operative officer, members resolved that asset disposal was not sustainable as it would not fully settle the outstanding debts. 8. THAT further, the Sub County Cooperative Officer advised that, in line with a circular from the Commissioner for Cooperative Development, societies are currently restricted from disposing of assets unless adequately justified; that the Sub County Cooperative Officer recommended that the Claimant commits its annual Co-operative Bank dividends, amounting to Kshs 1,642,836.35, towards offsetting the loan, and advised that the Claimant formally requests the 1st Defendant to consider rescheduling the loan to a more manageable repayment plan based on the above dividends. 9. The Claimant avers further that in the spirit of Co-operative Principle No. 6- Cooperation among Cooperatives, the Claimant is appealing for a favourable consideration of this request to enable it stabilize its operations and progressively meet its repayment obligations. 10. The Claimant avers further that as per the letter dated 23rd September 2025, by the 1st Respondent, the total loan outstanding is Kshs 14, 373,926.84; that on or about the 9th March 2026, the 2nd Respondent herein at the instance of the 1st Respondent issued a notification of sale to the Claimant notifying the Claimant that the repossessed motor vehicle registration number KDE 092Y Isuzu Lorry shall be sold vide public auction on 19th March 2026, and did not indicate the monies owed and or the value of the said lorry, however the said lorry is yet to be advertised; that the purported repossession and sale by the Respondents is illegal, as the Claimant was not issued with 40 days’ notice and that no forced sale valuation was conducted before the properties/assets were advertised, as per Rule 11 (x) of the Auctioneers Rules 1997; that the 2nd Respondent did not conduct a valuation of the suit property; that the 2nd Respondent did not indicate the value of the properties to be sold in the notice to sell dated 9th March 2026. 11. The Claimant further avers that it has been making regular periodical payment towards repayment of the loan advanced to them by the 1st Respondent and the purported sale is illegal, premature and aimed at depriving them of their properties. 12. The Claimant’s claim against the Respondent by themselves and/or their servants, agents, heirs, personal representatives or otherwise, is an order of mandatory injunction restraining the Respondents from repossessing, selling, disposing, auctioning and or in any other way interfering with the Claimant’s possession of their assets and properties and a declaration that the purported sale by Public Auction of any of the Claimant’s assets and properties by the Respondents is illegal null and void. 13. It is the Claimant’s case that unless the Respondents are restrained, the Applicant herein stands to suffer untold harm and prejudice if the Respondents are allowed to continue with the sale and advertisement of KDE 092Y Isuzu Lorry. 14. In the Affidavit in support of the application, the Deponent, SIMON CHEGE KARANJA,states that the Chairman of the Claimant, reiterates the grounds of the application and depones further that the Respondents will not suffer any prejudice if the orders sought are granted. 15. The 1st Respondent responded to the Claimant’s application vide the Replying Affidavit of its Chief Executive Officer, WATSON MAINA NJOGU sworn on 14th May, 2026. 16. The Deponent avers that by an application dated 20th April, 2023, the Claimant applied for a loan of Ksh. 15,600,000/=, which was approved and disbursed by the 1st Respondent; that the loan was secured by the Claimant’s motor vehicles registration numbers KCX 270S, KCM 361Y and KDE 092Y which are currently registered in the joint names of the Claimant and the 1st Respondent. 17. The Deponent avers further that the Claimant defaulted on the loan and the 1st Respondent issued a demand letter dated 23rd September, 2025 to which the Claimant responded by its letter dated 10th November, 2025 and in which the Claimant admitted the default and the debt and made proposals for payment. 18. According to the 1st Respondent, the default continued and on 9th February, 2026 the 1st Respondent repossessed the Claimant’s motor vehicle registration KDE 092Y Isuzu Lorry; that the Repossession was done in accordance with the Law and Rules. 19. The Deponent further states that the loan agreement between the Claimant and the 1st Respondent is a commercial loan transaction duly secured by the Claimant’s property; that the default of the loan is admitted by the Claimant and the 1st Respondent is at liberty to repossess and sell the security to realize the debt. 20. It is the 1st Respondent’s further response that the views of the Claimant’s members or those of the co-operative officer have no legal effect on the rights of the 1st Respondent to sell the Claimant's property to recover the debt; that the Claimant does not have a prima facie case with any probability of success; that the Claimant has not made out a case for the grant of an injunction; that all promises made by the Claimant on the repayment of the debt have been broken. 21. The deponent avers that the application is an abuse of court process and should be dismissed with costs. 22. Both parties filed written submissions in respect to the application. 23. In the written submissions dated 17th February, 2025, the Claimant has espoused the principles governing the grant of interlocutory injunctions set out in the landmark case of Giella v Cassman Brown. 24. While relying on the case of Mrao Ltd v First American Bank Ltd & 2 others, to describe a prima facie case. The Claimant has submitted that it has proved that it has a prima facie case on account of the failure of the 1st Respondent to follow the law in the repossession of the Claimant’s motor vehicle, that 45 day notice of sale was not issued and the forced sale value of the motor vehicle was not declared. 25. The Claimant submits that the attached motor vehicle is central to the Claimant’s operations as it is used in the transportation of milk from farmers, hence it stands to suffer irreparable damage if the sale proceeds. 26. As regards the consideration of balance of convenience, the Claimant cites the case of Amir Suleiman v Amboseli Resort [2004] eKLR and submits that the interests of justice demand preservation of the property pending determination of the dispute. 27. In the 1st Respondent’s written submissions dated 3rd June, 2026, the 1st Respondent submits on one issue for determination; that is whether the Applicant has made out a case for the grant of an injunction. The 1st Respondent sets out the principles stated in the case of Giella v Cassman Brown. 28. The 1st Respondent submits further on the reliance of the case of Nguruman Limited v Jan Bonde Nielsen & 2 others and avers that it was held therein that the conditions for grant of injunction are sequential and cumulative, meaning that all three requirements must be fulfilled for an injunction to be granted. 29. Further, the 1st Respondent cites the case of Migwi v Kenya Women Microfinance Bank PLC & Another, Mungai (Interested Party) Civil Case E182 of 2019[2021] KEHC 101(KLR)(Commercial & tax)(16 September 2021) (Ruling), in submitting that the applicant has not shown that there is the risk of irreparable injury and that even if it is sold, any injury can be compensated by an award of damages; that the motor vehicle having been offered as security for the payment of the debt, the 1st Respondent urges the Tribunal to find that no prima facie case has been established. **ANALYSIS AND DETERMINATION** 1. We have considered the application and all the documents filed by the Claimant/Applicant in support thereof, the Replying Affidavit of the 1st Respondent and the written submissions of both parties. 2. It is not in issue for the purposes of this application that the Claimant borrowed a loan from the 1st Respondent; that the loan was secured by the Claimant’s motor vehicles, including the motor vehicle subject of this claim; that the Claimant defaulted in payment of the loan and the 1st Respondent has attached the subject motor vehicle registration number KDE 092Y, with the intent to sell the same by public auction. 3. The Claimant has produced before the Tribunal, the notice of the attachment of the subject motor vehicle, and several letters in evidence of discussions that have taken place between itself and the 1st Respondent. 4. The law on the grant of injunctions is well established in the Celebrated case of Giella v Cassman Brown, that a person seeking a temporary order of injunction, has to convince the court or tribunal, that he has established a prima facie case; the damage he stands to suffer is such as cannot be compensated by way of damages and that the court can decide the case on a balance of convenience. 5. We find that the 1st Respondent has acted within its right after the default of the Claimant to pay the loan, by attaching the subject motor vehicle. We note without going into the merits of the case, that the Claimant’s case is not about denial of the debt, but about the difficulties in making payment caused by factors such as competition and loss of business and the need for indulgence for a suitable payment plan. We have considered the documentary evidence of the Claimant, including letters, proposals, indication of sale of property and partial payments after default,; and we find that the Claimant has made out a prima facie case at the onset, which awaits rebuttal at the hearing 6. Further, the Claimant’s averment that the attached motor vehicle was for the use of collecting milk from farmers is credible in view of the Claimant’s core business activity. The question we must ask ourselves is, whether damages would be sufficient to compensate the business of the Claimant in the event that an injunction is not granted and the vehicle is sold. We are guided to consider any special circumstances of a case in deciding whether or not to grant an injunction. We find that there are indeed Special circumstances concerning the Claimant worth considering in this matter. The Claimant has adduced evidence to the effect that its business has reduced and it has faced financial challenges due to competition by big companies among other factors. The Claimant is a member-driven body and damage to the Claimant is damage to the member. We doubt that the loss of the motor vehicle by the members of the Claimant would be sufficiently compensated by way of damages, when the core of a seemingly struggling business is dependent on the subject motor vehicle. 7. In any event, it is well established that pending the hearing of the case on its merits, the court will be preserve the subject property. 8. We therefore find that the Claimants’/Applicants’ application is merited and the Claimant/Applicant is entitled to the order of temporary injunction sought. 9. Consequently, we allow the Notice of Motion application dated 16th April, 2026 and make the following ORDERS: 10. THAT a temporary injunction be issued restraining the Respondents by themselves, their servants, agents and/or employees or whomsoever is acting on their behalf from trespassing onto, selling, transferring or disposing off or in any other way interfering with Motor vehicle registration **KDE 092Y Isuzu Lorry**, and or any other property belonging to the Claimant pending hearing and determination of the suit. 11. The costs of this application to be in the cause. Mention for Pretrial Direction on 19.8.2026. Notice to issue. Ruling signed, dated and delivered *virtually* at **Nairobi** this **5th** day of **August, 2026.** **Hon. J. Mwatsama Chairperson Signed 5.8.2026** **Hon. Beatrice Sawe Member Signed 5.8.2026** **Hon. Fridah Lotuiya Member Signed 5.8.2026** **Hon. Paul Aol Member Signed 5.8.2026** **Hon. Michael Chesikaw Member Signed 5.8.2026** **Tribunal Clerk Jemimah** Karanja Maina advocate for the Applicant – No appearance. Waweru Macharia advocate for the Respondent. **Hon. J. Mwatsama Chairperson Signed 5.8.2026**