Kenya Union of Savings and Credit Cooperative Limite v Stegro Sacco Limited

**REPUBLIC OF KENYA** **IN THE COOPERATIVE TRIBUNAL AT NAIROBI** **TRIBUNAL CASE NO. E.230 OF 2021** **(Coram: Hon. J. Mwatsama- Deputy Chairperson, Hon. B. Sawe- Member, Hon. F. Lotuiya- Member, Hon.P. Gichuki- Member, Hon. M. Chesikaw- Member and Hon. P. Aol- Member.)** **KENYA UNION OF SAVINGS AND** **CREDIT COOPERATIVE LIMITE……………………………………...CLAIMANT** **VERSUS** **STEGRO SACCO LIMITED ……… ……………………………….RESPONDENT** **RULING** 1. The Application Notice of Motion dated 17th November 2025 is for determination. The same is brought under Order 45 Rule1 and Order 50 Rule 1 of the Civil Procedure Rules and Section 80 Civil Procedure Act, Article 159 of the Constitution of Kenya. 2. The Application seeks for Orders: 3. ***Spent.*** 4. ***Spent*** 5. **THAT this Honourable Tribunal be and is hereby pleased to review and or set aside or vary and or vacate the Orders issued in its Judgement of 19th December 2024 to the extent that the Tribunal entered judgement in favour of the Respondent herein as against the Applicant for Kshs.69,307,542 together with cost and interest.** 6. **THAT upon review, this Honourable Tribunal be and is hereby pleased to rectify, reconsider, and recompute the amount due between the parties in accordance with the Loan Agreement.** 7. **THAT this Honourable Tribunal be pleased to issue such other Orders and/or directions which it deems necessary, equitable, fair and just in light of the circumstances of the case.** 8. **THAT the costs of this application be provided for.** The Application is supported with Affidavit of Joseph Mabwai who states he is Chairman of Sot Tea Growers Rurals Cooperative Savings & Credit Society Limited now STEGRO Sacco Limited. He avers on 26th September 2014 parties entered into a Loan Agreement and Respondent advanced to the Claimant Loan facility of Kshs.36,000,000.00 repayable in 24 months. The Loan Agreement expressly provided for **“….Any Society which defaults for 6 consecutive months will have the Loan offset against it savings and suffer an offset fee of 7.5% per annum on the outstanding loan..**” 1. The Applicant confirms default and formerly wrote to Respondent explaining reason for default and instructed Respondent to offset savings in accordance with the Agreement. The Respondent failed to act on the instructions. Respondent filed Claim against Applicant seeking for Kshs.46,590,839.00 and interest. On 19th December, 2024 the Tribunal delivered Judgement and awarded Claimant/Respondent the award of Kshs.69,307,543.00 an amount higher than what was pleaded. There was no amendment of Claim sought. 2. The inflated figure was as a result of a Summary Statement of Account filed on 25th January 2024. The Applicants state they have received a comprehensive financial analysis by an Independent Financial Analyst who demonstrated how the figure of Kshs.69,307,543.00 was erroneously reached. The analysis could not be done as the Claimant/Respondent filed the Summary Statement of Account late in the day during hearing after close of pleadings. 3. The Claimant/Respondent held the Respondent/Claimant’s savings amounts to Kshs.22,071,112.00 and they failed to apply it to the loan contrary to the contracted framework. The omission materially distorted the principal interest. The Tribunal also as per the Application relied on unpleaded amount disregarding binding contractual terms, misclassification of loan repayment and failure to offset the Applicant savings. Applicant therefore requests for judgment to be reviewed and corrected and the Application brought without unreasonable delay upon discovering of new evidence. It is in the interest of justice, equity and substantive fairness to safeguard the Applicant’s rights. 4. The Claimant/Respondent filed a response vide a Replying Affidavit sworn by Dennis Njuguna on 16th June 2026. He states he is the Deputy Manager Recovery and Restructuring of KUSCCO and opposes the Application for Review. That the Applicant are abusing the Court process having filed an earlier Application dated 21.2.2025 and withdraw it upon being challenged by a Preliminary Objection date 14th April, 2025 and as a result of Claimant/Respondent challenging the aforementioned Application the Respondent/Applicant filed Notice of Withdrawal dated 17th April, 2025. The Claimant/Respondent state the Applicant is forum shopping and an attempt to have multiple bites as the cherry. 5. The Claimant/Respondent further oppose the current Notice of Motion dated 17th November 2025 because they state the Respondent/Applicant was served with the Statement of Account and chose not to contest, change or respond to the figures contained as per paragraph 5 of the Tribunal Judgement. That the said “new evidence” is not new. The test of the new evidence is stringent and it must be shown. Evidence would not have been obtained with reasonable diligence for use at trial. They aver the Respondent/Applicant attempts to appeal the Judgement disguised as a Review. The Respondent stands to suffer great prejudice if Notice of Motion is allowed because it has taken almost a decade from initial default. Applicant had not come to Tribunal with clean hands and Application ought to be dismissed. 1. The Respondent/Applicant filed Written Submissions dated 24th July, 2026 which the Tribunal considers as well as List of Authorities dated 24th July, 2026. The Claimant/Respondent did not file any written submissions as at the date of writing this ruling. Having considered the Notice of Motion Application Supporting Affidavit therein, Replying Affidavit by Claimant/Respondent the issue for determination is:. One:**Whether there was unreasonable delay in bringing Notice of Motion Application for Review.** Issue Two**: Whether the Tribunal ought to have been confined to the pleaded sum of Kshs.45,590.39**. 1. Issue One. **Whether there was unreasonable delay in bringing Notice of Motion Application for Review.** We note the Judgment was delivered on 19th December 2024 and there was an Application dated 21st February 2025 which was later withdrawn by the Respondent/Applicant. The Respondent/Applicant filed another Notice of Motion dated 17th November 2025 which is what we are dealing with currently. The Application is filed almost 11 months since Judgement was delivered with intervening factors in between. 1. The Applicant has explained the reasons for delay of seeking a Review of the Judgement. We look into Article 159(2)(d) of the Constitution. “…..*Justice shall be administered without undue regard to procedural technicalities*.,,” The Tribunal considers the Applicant’s Notice of Motion and the unfairness or prejudice if we do not allow the Application to be ventilated. Looking into the Orders sought and noting there was no indolence of the Respondent/Applicant after Judgment just withdrawal of an earlier application. We find that the issue of inordinate delay does not arise. 1. Issue Two: **Whether the Tribunal ought to be confined to pleaded sum of Kshs.46,590.839.00**. Court of Appeal **No. 76 of 2014**, **DAVID SIRONGA OLE TUKAI vs. FRANCIS ARAP MUGE & OTHERS “….**It is well established in our jurisdiction that the court will not grant a remedy, which has not been applied for, and that it will not determine issues, which the parties have not pleaded. In an adversarial system such as ours, parties to litigation are the ones who set the agenda, and subject to rules of pleadings, each party is left to formulate its own case in its own way. And it is for the purpose of certainty and finality that each party is bound by its own pleadings”. 1. Article 50(2) b,c,j,k Constitution of Kenya, states, 2)Every accused person has the right to a fair trial, which includes the right— (b)to be informed of the charge, with sufficient detail to answer it; (c)to have adequate time and facilities to prepare a defence;………………………….. (j)to be informed in advance of the evidence the prosecution intends to rely on, and to have reasonable access to that evidence; For (k)to adduce and challenge evidence; For a fair hearing and determination of any matter before Court or Tribunal the parties ought to have had all documents that would have been used during trial. In the instant case, we note the Summary Statement of Account was given after pleadings closed and hearing of the suit. We appreciate the Respondent would not have been in a position to respond to the documents which the Tribunal relied on when determining the matter and which Judgement was delivered on 19th December 2024. We are guided further by the case of **Nairobi City Council vs. Thabiti Enterprises Ltd** where the Court case considered the case of **Odd** **Jobs vs. Mubia** (*supra*) but followed **Sheikh vs. Sheikh & Others [1991] LLR 2219(CAK) and Sande vs. Kenya Cooperative Creameries [1992} LLR 314 9BAK)** in holding that, “*A Judge has no power or jurisdiction to decide an issue which had not been pleaded unless the pleadings were suitably amended*”. 1. In the case of **Sheikh Vs. Sheikh & Another** *(Supra*) the following passage from Bullen Leake on pleadings 12th Edition was relied upon. “*The system of Pleadings operates to define and delimit with clarity and precision the new matters in controversial between the parties upon which they can prepare and present their respective cases and upon which the Court will be called upon to adjudicate between them. It does save the two fold purposes of informing each party what is the case of the opposite party which we will have to meet before and at the trial, and at the same time, informing the Court what are the issues between the parties which will give the interlocutory proceedings before the trial and which we the Court will have to determine a the Trial”.* The case of **Odd Jobs vs. Mubia** stated in limited circumstances where unpleaded issue is crucial to the matters in issue the Court may determine a suit on the unpleaded issue in their evidence or submissions and left the matter for the Court. 1. Taking all matters into account and our Judgement delivered on 19th December, 2024 we find the Notice of Motion dated 17th November, 2025 to be with merit and order as follows: 2. Judgement issued on 19th December, 2024 is reviewed and the same is reviewed to Kshs.46,590,839.00 plus cost and interest from date of filing this suit till payment in full. 3. The monies held by Claimant to be used to offset part of the defaulted loan. Ruling dated and delivered *virtually* at **Nairobi** this **27th** day of **August, 2026.** **Hon. J. Mwatsama Chairperson Signed 27.8.2026** **Hon. Beatrice Sawe Member Signed 27.8.2026** **Hon. Fridah Lotuiya Member Signed 27.8.2026** **Hon. Michael Chesikaw Member Signed 27.8.2026** **Hon. P. Aol Member Signed 27.8.2026** **Tribunal Clerk Koki** Ms. Chepkoech advocate for the Applicant. Githaiga adv h/b for Ms. Mati advocate for the Respondent. **Hon. J. Mwatsama Chairperson Signed 27.8.2026**