https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7419

Kinyua v Absa Bank Kenya PLC (Commercial Cause E675 of 2025) [2026] KEHC 7419 (KLR) (Civ) (28 May 2026) (Ruling) Neutral citation: [2026] KEHC 7419 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Civil Commercial Cause E675 of 2025 MO Ado, J May 28, 2026 Between John Maina Kinyua Plaintiff and Absa Bank Kenya Plc Defendant Ruling 1.The Plaintiff/Applicant, John Maina Kinyua, approached this court by way of a Notice of Motion application dated 13th October 2025, primarily seeking interlocutory injunctive orders to restrain the Defendant/Respondent, Absa Bank Kenya PLC, by itself, its servants, or authorized auctioneers, from exercising its statutory power of sale, selling, or alienating the Applicant's charged properties known as Sigona Title Numbers Sigona/1294 and Sigona/2103 (hereinafter referred to as "the suit properties"). 2.The application is supported by a Supporting Affidavit sworn by the Applicant on 13th October 2025 and a Further Affidavit sworn on 25th November 2025. 3.The Defendant/Respondent opposed the application through a Replying Affidavit sworn by Samuel Njuguna, its Legal Officer, dated 27th October 2025. 4.Both parties subsequently filed and relied upon their respective written submissions, which the Court has duly considered. Background 5.The Applicant, a registered proprietor, by a Charge Instrument dated 17th September 2024, charged the suit properties in favor of the Respondent bank to secure a long-term loan facility of Kshs. 80,000,000. 6.Under the terms of the Facility Agreement and Charge Instrument, the loan was structured to be repayable in one hundred and eighty (180) monthly installments commencing on 12th June 2024. 7.Sometime in early 2025, the Applicant defaulted on his monthly repayment schedule. Acting upon this default, the Respondent, through its advocates, issued a 90-day statutory notice dated 12th May 2025 pursuant to Section 90(1) of the Land Act, 2012. Instead of simply demanding the crystallization of arrears, the notice demanded immediate payment of the entire outstanding loan sum, amounting to Kshs. 79,942,306.10. 8.On 3rd September 2025, the Respondent escalated the recovery process by issuing a 40-day Notice to Sell under Section 96(2) of the Land Act, demanding Kshs. 79,839,491.50. This statutory timeline was expiring, prompting the Applicant to move this court to protect the suit properties. The Applicant’s Case: 9.The Applicant contends that the statutory notices issued by the Respondent are fundamentally defective and legally untenable. It is submitted that the Respondent acted in violation of Section 90 of the Land Act, 2012, by collapsing a 15-year facility barely one year into its tenure on account of a single month's default (April 2025). 10.The Applicant argued that under Clause 7(a) of the Charge Instrument, a specific event of default must be declared and a prior demand for arrears issued before the facility can be accelerated. No such contractual condition precedent was met. 11.Relying on the Respondent’s own bank statements (marked as Exhibit SN-04), the Applicant stated that the statements demonstrate that as of 24th September 2025—well within the periods contemplated by the statutory frameworks—the Applicant had fully regularized the account, reducing the arrears to zero (Kshs. 0.00). The Applicant asserted that since the loan account is current, active, and performing, the intended foreclosure is malicious, premature, and an abuse of the statutory power of sale. The Respondent’s Case: 12.The Respondent opposed the application on the ground that the Applicant freely executed the Facility Agreement and Charge Instrument, thereby exposing the properties to realization upon default. The Respondent maintained that the Applicant defaulted on his obligations for multiple months, including February and April 2025. 13.The Respondent invoked Clause 7 of the Charge Instrument, asserting that it confers an absolute, unfettered right to recall the entire outstanding loan balance immediately upon any default by the borrower. Because the Applicant failed to pay the entire recalled principal within the statutory periods, the Bank claims it is legally entitled to proceed with the security realization process under Section 96 of the Land Act. 14.Consequently, the Bank urged the Court not to interfere with the sanctity of a commercial contract between consenting parties. Analysis and Determination 15.I have carefully considered the pleadings and the rival submissions. The sole issue for determination at this interlocutory stage is: whether the Applicant has satisfied the legal principles and thresholds required for the grant of a temporary injunction. 16.The principles governing the grant of interlocutory injunctions in this jurisdiction are well-anchored in the locus classicus case of Giella v. Cassman Brown & Co. Ltd [1973] EA 358. The Applicant must satisfy three sequential tests:i.First, demonstrate a prima facie case with a probability of success.ii.Second, show that he stands to suffer irreparable injury which cannot be adequately compensated by an award of damages.iii.Third, if the court is in doubt, the application must be decided on the balance of convenience. 17.A prima facie case is not one that must succeed at the final trial, but one which raises triable issues that warrant substantial judicial exploration. 18.In Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] KLR 125, the Court of Appeal defined a prima facie case as one which, on the material presented demonstrates an apparent infringement of a right requiring rebuttal from the opposite party. 19.In this case, the Applicant has raised heavy questions concerning the statutory compliance of the Respondent’s recovery process. Section 90(2) of the Land Act, 2012, dictates that a statutory default notice must explicitly inform the chargor of the nature and extent of the default and give the borrower an opportunity to cure the actual arrears. 20.Turning to the evidence, the Respondent's own produced statement of accounts (Exhibit SN-04) explicitly demonstrates that as of 24th September 2025, the Applicant paid a cumulative total that effectively regularized all outstanding arrears, bringing the default amount to Kshs. 0.00. Under Section 176 of the Evidence Act (Cap 80), these entries in the banker's books constitute prima facie evidence of the facts recorded therein. The Respondent cannot disown its own entries. 21.A situation where a chargee seeks to sell a property worth millions over an accelerated loan structure when the core underlying default/arrears have been fully cured and paid up within the statutory response windows raises a monumental triable issue. Realization of security must be conducted in strict compliance with the law and equity. A premature, accelerated foreclosure on a performing, fully regularized loan presents a formidable prima facie case with a high probability of success. 22.On irreparable injury, the Respondent argued that the properties are commercial security interests and any injury could be adequately compensated by damages if the sale is later found to be unlawful. 23.However, this Court notes that the suit properties are actively tenanted commercial assets. The pending, un-recalled statutory notices and threats of public auction have created acute anxiety, threatening to trigger a mass exodus of tenants. 24.Disruption of rental income streams would permanently damage the commercial viability of the properties and strip the Applicant of the very source of funds used to service the Respondent's facility. 25.The forced, premature sale of an active asset when no debt is currently in arrears, in the view of this Court, constitutes an irremediable loss that cannot be cured by a simple retroactive arithmetic award of damages. 26.Further, if any doubt existed, the balance of convenience tilts heavily in favor of preserving the status quo. The loan facility has a maturity date stretching into 15th July 2039. The asset is preserved, the account has been regularized, and the Respondent holds valid charge instruments over properties that continue to exist. 27.In the premises, I find that no prejudice will be suffered by the Respondent bank if the sale is stayed pending the quick determination of the main suit. Conversely, if the injunction is denied, the properties will be sold by public auction, creating irreversible third-party complexities and rendering the main suit a mere academic exercise. 28.Accordingly, the Notice of Motion application dated 13th October 2025 is hereby allowed in the following terms:i.An Interlocutory Injunction be and is hereby issued restraining the Defendant/Respondent, whether by itself, its officers, employees, legal representatives, auctioneers, or any person acting on its behalf, from selling, alienating, transferring, disposing of, or in any other way interfering with the Plaintiff/Applicant’s quiet possession and ownership of the charged properties known as Title Numbers Sigona/1294 and Sigona/2103 pending the hearing and final determination of the main suit.ii.Both parties are hereby directed to comply with pretrial disclosures within fourteen (14) days from today's date to facilitate an expedited hearing of the main suit.iii.Costs of this application shall be in the cause. 29.It is so ordered. DATED, SIGNED, AND DELIVERED AT NAIROBI THIS 28TH DAY OF MAY 2026HON. MR. JUSTICE MOSES ADOJUDGE OF THE HIGH COURTIn the Presence of:Moses C/AKatasi h/b for Ndegwa………………for the ApplicantMbira h/b for Kimiti……………for the Respondent