[2023] KECPT 72 (KLR)

[2023] KECPT 72 (KLR)

The tribunal found that the respondent took a loan from the cooperative society and the claimant acted as one of his guarantors. Upon the respondent's default, the claimant's shares were used to settle the outstanding loan. The respondent failed to provide any justification for his default and did not participate in the proceedings to defend his position. The tribunal held that the respondent had a duty to service the loan and should not shift the burden of repayment to the guarantor. The tribunal relied on established legal principles that bind parties to the terms of their contract and prevent a party from benefiting from its own breach. Consequently, the tribunal found in favour of the...

Citation
[2023] KECPT 72 (KLR)
Parties
Applicant: David Wainaina Kihoro; Respondent: John Kihunyu Gitogo
Court
Cooperative Tribunal
Jurisdiction
Kenya
Judgment Date
28 February 2023
Case Number
Tribunal Case 520 of 2021
Procedural Posture
Tribunal Claim / Judgment
Outcome
claim allowed in part
Judges
BM Kimemia, J. Mwatsama, M. Mbeneka
Legal Topics
Guarantee Liability, Loan Default, Cooperative Societies, Recovery of Debt
Source Language
English
Banking and Finance Civil Procedure Guarantee Liability Loan Default Cooperative Societies Recovery of Debt

Case Brief

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Parties

David Wainaina Kihoro

Applicant

John Kihunyu Gitogo

Respondent

Procedural Posture

Tribunal Claim / Judgment

Legal Issues

  1. 1 Whether the respondent is liable to refund the claimant the amount recovered from him as guarantor due to the respondent's loan default.
  2. 2 Whether the claimant is entitled to special damages, interest, and costs from the respondent.

Ratio Decidendi

The tribunal found that the respondent took a loan from the cooperative society and the claimant acted as one of his guarantors. Upon the respondent's default, the claimant's shares were used to settle the outstanding loan. The respondent failed to provide any justification for his default and did not participate in the proceedings to defend his position. The tribunal held that the respondent had a duty to service the loan and should not shift the burden of repayment to the guarantor. The tribunal relied on established legal principles that bind parties to the terms of their contract and prevent a party from benefiting from its own breach. Consequently, the tribunal found in favour of the...

Court Disposition

claim allowed in part

Orders

  • The respondent shall pay the claimant Kshs 781,994.
  • The respondent shall pay costs of the suit to the claimant.