[2021] KECPT 586 (KLR)
The Tribunal found that the Claimant had sufficiently proved that a loan was advanced to the Respondent, who subsequently defaulted on repayment. The Claimant's evidence, including the loan agreement, payment vouchers, default notices, and demand letters, was uncontroverted due to the Respondent's failure to appear...
Source-derived case information.
- Citation
- [2021] KECPT 586 (KLR)
- Parties
- Applicant: Kenya Union of Savings & Credit Cooperatives Limited (KUSCCO); Respondent: Kipinte SACCO Society Limited
- Court
- Cooperative Tribunal
- Jurisdiction
- Kenya
- Case Number
- Tribunal Case 259 of 2020
- Procedural Posture
- Claim / Judgment After Formal Proof; Respondent Absent, Ex Parte
- Outcome
- Judgment for the Claimant; claim for general damages dismissed.
- Legal Topics
- Loan Default, Breach of Contract, Remedies for Breach, Interest on Loans
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Kenya Union of Savings & Credit Cooperatives Limited (KUSCCO)
Applicant
Kipinte SACCO Society Limited
Respondent
Procedural Posture
Claim / Judgment After Formal Proof; Respondent Absent, Ex Parte
Legal Issues
- 1 Was there a loan advanced to the Respondent by the Claimant?
- 2 Did the Respondent default in repayment of the loan?
- 3 What remedies are available for breach of the loan agreement?
Ratio Decidendi
The Tribunal found that the Claimant had sufficiently proved that a loan was advanced to the Respondent, who subsequently defaulted on repayment. The Claimant's evidence, including the loan agreement, payment vouchers, default notices, and demand letters, was uncontroverted due to the Respondent's failure to appear or defend the claim. The Tribunal held that the appropriate remedy for breach of a loan agreement is repayment of the outstanding loan amount plus interest at the agreed rate. The claim for general damages for breach of contract was denied, as such damages are not typically awarded where the loss is quantifiable and the contract provides for specific remedies. Judgment was...
Court Disposition
Judgment for the Claimant; claim for general damages dismissed.
Orders
- Respondent to pay the Claimant Kshs. 6,282,633.
- Interest on the above sum from the date of filing suit at Tribunal rates until payment in full.
Full Case Text
Judgment text and source record
61 paragraphs
REPUBLIC OF KENYA
IN THE CO-OPERATIVE TRIBUNAL AT NAIROBI
TRIBUNAL CASE NO.259 OF 2020
KENYA UNION OF SAVINGS & CREDIT
COOPERATIVES LIMITED (KUSCCO).............................................. CLAIMANT
VERSUS
KIPINTE SACCO SOCIETY LIMITED......................................... RESPONDENT
JUDGMENT
1. The Claimant filed Statement of Claim dated 7. 8.2020 on 24. 8.2020. The claim is for repayment of loan advanced to the Respondent in the year 2011 for Kshs.3,945,000/=.The loan fell into arrears and despite several demands by the Claimant the sum of money remained unpaid.
2. The claim is thus for:
a. Damages for breach of contract
b. Kshs. 6,282,633/= as at 30th June 2020.
c. Interest on (a) and (b) above from the date of disbursement until payment of the arrears in full.
d. Any other relief that the Honorable Tribunal may find fit to grant.
e. Costs of the suit.
3. The Respondent despite service as per the Affidavit of Services of Benjamin Mutua sworn on 29. 10. 20 and filed on 6. 11. 2020 evidences service of summons to enter appearance and statement of claim were served on Respondent. The Respondent failed to enter appearance and a Request for Judgment Application dated 29. 10. 2020 was filed.
The Request for Judgment Application was allowed on 18. 11. 2020.
4. The matter was slated for formal proof on 26. 1.21.
CW1 Grace Muiruri gave her evidence adopting her witness statement dated 7. 8.2020. The Statement gives detailed account of the Claimant being an umbrella Co-operative society body and advances credit facilities to member cooperatives.
In the year 2014 the Respondent requested for a loan and an approval for Kshs. 3,945,000/= on 13th January, 2013.
5. The Respondent paid their loan for a while then begun defaulting.
Despite demand letters and default notices the Respondent has refused to pay up. The loan accrues interest to 13. 5.% per annum and default penalty of 6% per annum.
The loan plus interest has accumulated to Kshs.6,282,633/= at date of filing suit.
6. There being no statement of Defence we are called up to make a determination.
The Respondent has defaulted paying his loans.
The Claimant has evidenced the:
a. Loan Application and loan agreement forms as advanced.
b. Kuscco cheque payment voucher.
c. Default notices from Kuscco and
d. Demand letters
e. Financial Statements.
7. Issues to be addressed
Issue one:- Was there a loan advanced?
Issue two: Whether the Respondents defaulted in payment of the loans?
Issue three:- Remedies for breach of contract.
8. Issue one:
Was there a loan advanced?
The Claimant has evidenced the loans advanced to the Respondent, when it was advanced and the repayment plan or period 12 monthly installments.
9. Issue two:
Whether the Respondents defaulted in payment of the loans?
The Respondent can be said to have defaulted in the loan repayment. This is evidenced by the default notices from Kuscco requesting for repayment and demand letters from the Respondent Advocates.
10. Issues three:
Question- what is the reason for breach of a loan agreement?
The remedy for any loan is repayment of the loan itself plus the interest applicable.
11. Issue four:
Are General Damages payable in this instance?
General Damages are awarded and paid in instances where there has been breach.
Conclusion
The upshot of the above is that judgment is entered in favour of claimant against Respondent for:
a. Kshs. 6,282,633/=.
b. Interest of (a) above from date of filing suit at Tribunal rates.
c. Prayer for damages for breach fails.
d. Costs of suit.
JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY THIS 27TH DAY OF MAY, 2021.
HON. B. KIMEMIA CHAIRPERSON SIGNED 27. 5.2021
HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 27. 5.2021
MR. P. GICHUKI MEMBER SIGNED 27. 5.2021
Tribunal Clerk Leweri
Miss Ochieng holding brief for Owaga for Claimant: Present
No appearance for Respondent.
HON. B. KIMEMIA CHAIRPERSON SIGNED 27. 5.2021