https://new.kenyalaw.org/akn/ke/judgment/kecopt/2026/272

**** **REPUBLIC OF KENYA** **IN THE COOPERATIVE TRIBUNAL AT NAIROBI** **TRIBUNAL CASE NO. E715 OF 2025** **(Coram: Hon. J. Mwatsama-Ag. Chairperson, Hon. B. Sawe-Member, Hon. F. Lotuiya-Member, Hon. M. Chesikaw-Member and Hon. P. Aol-Member.)** **KIMSAVE SACCO LTD……………………………………………CLAIMANT** **VERSUS** **JOEL OTIENO OOKO…………………………………………..RESPONDENT** **RULING** 1. The Notice to show cause dated 19th February 2026, against the Respondent is being contested as procured prematurely by the Claimant despite being served with a Notice of Motion dated 29th November 2026 seeking for a stay of execution of the *ex-parte* judgement entered on 17/9/2025. 2. The Notice is addressed to the Respondent to show cause why he should not be arrested and committed to civil jail in default of payment of a decretal amount plus cost and interest of Ksh.809,912.00 3. Prior to this, the Claimant had filled a Statement of Claim dated 18/8/2025 seeking for judgement against the Respondent for; 4. Refund of Ksh1,551,650.92 being the loan granted and interest. 5. Cost of the suit and interest until payment in full. 6. Any other relief deemed appropriate by the Tribunal. 7. A process server, Antonhy Lodenyo Ivayo swore and filed an Affidavit of Service dated 17/9/25 and stated that he received summons and Statement of Claim together with Witness Statement and bundle of documents from the law firm of T & T advocates LLP advocates. He stated that he served the Defendant on 27/8/2025 via WhatsApp on his mobile no. 0721-991-752. 8. On his part, the Respondent filed a Statement of Defence dated 31st October 2025 and further filled a Notice of Motion dated 29th November 2025 seeking for a myriad of orders which can be summarized as follows: 9. Spent 10. That there be a stay of execution of the judgement and the decree therein pending the hearing and determination of his application 11. That the claimant is on the verge to execute the decree which will cause great loss to the respondent. 12. That in the interest of justice and in compliance with Article 50 of the Constitution the orders sought by the respondent be granted. 13. On the mention date of 2nd December 2025, the Tribunal directed the Respondent to serve the above Notice of Motion upon the Claimants and further directed the Claimants to file and serve the response to the Notice of Motion within 14 days upon service. Mention for further directions was scheduled for 11th February 2026. 14. On 2nd February2026 the Respondent did not show up neither did any advocate appear for him. Promptly, the Claimants prayed for an Order of Notice to show cause against the Respondent which was granted. 15. Another mention date of 13th April 2024 was fixed for the Notice to show cause for the payment of the decretal sum of Ksh.809,912.00. On 13th April 2026, the Respondent prayed for 3 days to file his response to the Notice to show cause which was granted. **Analysis** 1. From the onset, this Tribunal makes it clear that this ruling relates to the Notice to show cause why the Respondent should not be arrested and committed to civil jail. In that context, we will consider the Statement of Claim and the annexures, the Respondent’s defence and the Respondent’s response to the Notice to show cause dated 14th April 2026 together with the Claimants reply to the response dated 17th April 2026 and the directions/Orders of the Tribunal. 2. A reading of the file records raises a question that, if the Notice to show cause is set aside what happens to the admission that the Respondent proffered in his Statement of Defence that he acknowledges that he defaulted to pay the Claimant an amount of Ksh.200,000/=? This is captured under Paragraph 6 of the Respondent’s defence dated 31st October 2025, and stated in his own words as follows: ***“The Respondent has since paid the said sum of Kenya shillings thirty thousand and the receipt cheque is dated 11/7/2011 and that the remaining balance ought to be settled by the respondent is a deduction from the total of two hundred and thirty thousand (Ksh.230,000-Ksh.30,000) giving rise to Kenya shilling two hundred thousand shillings (Ksh.200,000) amount that should be claimed by the Claimant herein”.*** ***Paragraph 9 make the admission more clearer and state:*** ***“-----------------The Respondent avers that he is able to offset the remaining Kenya shillings two hundred thousand Shillings as the balance he owes to the Claimant not the alleged Kenya shillings four hundred and four (Ksh.404,000) herein”.*** 1. Granted that the respondent has admitted that he owes Ksh.200,000/= and that he is able to pay we order that these amount plus interest be paid promptly. 2. A look at the Loan application form dated 24/7/2012 which relate to the loan of Ksh.230,000/=, the Respondent indicated the purpose of the loan as **“Top-up loan”** and further show that he had an existing outstanding loan of Ksh.307,000/=. The Respondent has not shown or demonstrated how he repaid or how the Claimant treated this outstanding loan balance Ksh.307,000/=. 3. Further, the Claimant on the other hand state that on or about 2015 the Respondent applied for a development loan facility of Ksh.404,956/= which was approved and advanced to him. It is this amount that attracted a cumulative interest of Ksh.1,146,734.92 to make a total of Ksh.1,551,690.92 that the Claimant is making a claim. In our view the cumulative interest of Ksh.1,146,734.92 is in total violation of Section 44A of the banking Act and the “*in duplum rule*”. 4. In the petition of **Anne J. Mugure & 2 others v. Higher Education Loans Board (2021)** the court stated that: ***“In duplum rule is a latin phrase which loosely translate to “in double”. Simply stated, the rule is to the effect that interest ceases to accumulate upon any amount of loan owing once the accrued interest equals the amount of the loan advanced”. (Emphasis ours)*** 1. This rule was introduced into our laws in 2007 to tame the appetite of lenders who had made recovery of interest on advances to be a cash cow by permitting interest to accumulate to astronomical figures. The Claimants case herein is a classic example which need no further elaboration. 2. In the case of **Mwambeja Ranching company ltd & another V. Kenya National capital corporation (2019) eKLR** the court of appeal enunciated the rationale of the rule and held that: ***“In duplum rule is meant to protect borrowers from exorbitant interest accumulation on loans and limits the amount recoverable by a lender on a defaulted facility to no more than double the principle owing when the loan has become non-performing plus recoverable expenses”.*** 1. This is the basis upon which the Tribunal calculated the amount which was entered into in the judgement against the Respondent. The Loan amount of Ksh.404,956/= is doubled to make Ksh.809,912/= and capped there. 2. However, on the flipside, upon our perusal of the file records, we have not seen a filed copy of the said loan application form for the loan of Ksh.404,596/= to prove the veracity of the Claimants’ statement. 3. Interestingly, in the member statement account print out from 2014 to 2015 filed by the Claimant there is an entry of Ksh.404,956/= being shown as balance carried forward in the month of March 2014. The account does not show in any of the entries the lumpsum amount of Ksh.404,956/=. 4. Contrary to the claim by the Claimant that the Respondent was granted the loan in 2015 there is no entry for such amount in the member statement account for the entire period from 2015 to 2025. Accordingly, it is our finding that the Claimant has failed to proof on a balance of probability that they advanced a loan of Ksh.404,956/= to the Respondent. For this reason, the Tribunal is justified to tamper with the Notice to show cause on condition that the Respondent pays the admitted amount owing of Ksh.200,000/= within the next thirty (30) days from the date of this ruling. 5. Finally, we conclude by ordering that the Notice to show cause and the consequential orders is/are temporarily set aside for a period of thirty (30) days on the following conditions: **Final orders.** 1. The Respondent is ordered to pay the admitted sum of Ksh.200,000/= plus interest from date that the loan was advanced while taking into considering the *“in duplum rule”.* 2. In the event that the respondent fails to comply with this order the earlier Notice to show cause dated 19/2/2026 together with the decree dated 6th November 2025 and all the consequential orders shall automatically revive and issue. 3. Notice to show cause or mention to confirm compliance on 14/10/2026. Notice to issue. Ruling dated and delivered *virtually* at **Nairobi** this **29th** day of **June, 2026.** **Hon. J. Mwatsama Ag.Chairperson Signed 29/6/2026** **Hon. Beatrice Sawe Member Signed 29/6/2026** **Hon. Fridah Lotuiya Member Signed 29/6/2026** **Hon. Michael Chesikaw Member Signed 29/6/2026** **Hon. P. Aol Member Signed 29/6/2026** Court Assistant - Mutai Paul Ngugi advocate for the Claimant Joel Otieno – No appearance Ogwe & Associates advocates for Respondent – No appearance **Hon. J. Mwatsama Ag. Chairperson Signed 29/6/2026**