https://new.kenyalaw.org/akn/ke/judgment/kecopt/2026/306

**REPUBLIC OF KENYA** **IN THE COOPERATIVE TRIBUNAL AT NAIROBI** **CTC NO. E111 OF 2026** **(Coram: Hon. J. Mwatsama- Chairperson, Hon. B. Sawe- Member, Hon. F. Lotuiya- Member, Hon. M. Chesikaw- Member and Hon. P. Aol- Member.)** **GIBSON MUCHOKI KIRUGUMI ……………………………..1ST CLAIMANT** **JAMES WAMBUGU MWANGI………………………………2ND CLAIMANT** **PETER WANJOHI RIITHO …………………………………….3RD CLAIMANT** **STEPHEN MBUTHIA MUCHIRI………………………………..4TH CLAIMANT** **JOHN RUGARA WACHIRA………………………………….5TH CLAIMANT** **V.** **ZACHARIA KIBE MUCHIRI………………………….……..1ST RESPONDENT** **KENVERSITY SACCO……………………………………...2ND RESPONDENT** **RULING** 1. This ruling is in respect of the claimants’ Notice of Motion application dated 18th February 2026 brought under section 76 & 77 of the cooperative societies Act, Rule 12 of the cooperative Tribunal (practice & procedure) Rules 2009 and all other enabling provisions of the law, seeking for the following orders: 2. ***Spent.*** 3. **That a temporary injunction to issue restraining the 2nd Respondent from deducting, attaching or interfering with the claimants’ savings, deposits or accounts.** 4. **That an injunction to issue restraining the 2nd Respondent from recovering the alleged loan arrears from the claimants pending hearing and determination of the claim.** 5. **That a temporary injunction to issue ordering the 2nd Respondent to reverse the amounts deducted from the guarantors /claimants’ accounts.** 6. **That the monthly deductions be declared unlawful and premature.** 7. **That costs be awarded to the claimants.** 8. The application is supported by an affidavit dated18th February 2026 sworn by Gibson Muchoki Kirugumi who is dully authorized by the 2nd, 3rd, 4th and 5th claimants to act on their behalf. **Brief background** 1. That the claimants and the 1st Respondent are members of the 2nd Respondent and are employees of Kenyatta university. It is a requirement in the 2nd Respondent’s by-laws and practice that a borrower of a loan must obtain fellow members to guarantee and append their signatures in the loan application form to act as security before a loan is approved/granted. In the instant case, the 1st respondent applied for a loan of ksh650,000/=from the 2nd Respondent on 16th February 2023 and agreed that the repayment will be done through a check- off system for a period of 84 months. The loan was guaranteed by five (5) guarantors who are the claimants in this case. That the 1st respondent defaulted to pay the loan. **The claimants case.** 1. In a supporting affidavit sworn by Gibson Muchoki Kirugumi dated18th February 2026, the claimants herein confirm that they guaranteed the 1st Respondent to be granted a loan of Ksh650,000 by the 2nd Respondent. That a notice dated 15th July 2025 addressed to the 2nd Respondent was copied to them, which notice showed that the 2nd Respondent had defaulted to repay an outstanding amount of Ksh 422,548.75 2. That vide a letter dated 29th December 2025, the 2nd respondent informed the claimants that they are liable to pay the outstanding loan balance of ksh422, 548.75 with effect from 30th November 2025 for 36 months and apportioned the amount to the claimants accordingly. **The 2nd Respondents Response.** 1. In a Replying affidavit dated 10th April 2026, sworn by Paul K. Njagatha the 2nd Respondent opposed the claimants prayers and res-stated that the claimants voluntarily executed the guarantee part of the loan application form which bound them jointly and severally to repay the loan in the event that the principal borrower defaults. 2. That the Ksh650,000/= loan was advanced to the 1st Respondent in February 2023 and he started to default in September 2023. Accordingly, the 2nd respondent issued reminders, messages and demand letters with a view to encourage him to settle the arrears. When these failed to elicit some response, on 15th July 2025, the 2nd Respondent issued a 14 days’ notice to the 1st Respondent and the claimants. Between 9th and 10th December 2025 each of the claimants wrote to the 2nd Respondent and demanded to be given a letter confirming the defaulted amount and the messages that were send to the 1st Respondent. 3. The 2st Respondent pointed out that it is upon the non-compliance of the 14 days’ notice that they invoked the legal provisions of guarantor ship to recover the ksh422,548.75. Ideally, it is the 2nd respondent argument that they followed the due process provided by their by-laws, the loan agreement and the executed guarantee to recover the defaulted loan. **Tribunals directions.** 1. On a mention date held on 25th March 2026, the tribunal directed the parties to canvas the application dated 18th February 2026 by way of written submissions. Each of the parties filled their submissions in time. **Issue for determination.** 1. After analysing and consideration of the claimants’ application, the supporting affidavit and evidences, the respondents replying affidavit and evidences together with the submissions of the respective parties, one issue emerge for our consideration. That is: 2. **Whether the claimants met the legal threshold for the granting of a temporary injunction?** **Analysis and determination.** 1. **Whether the claimants met the legal threshold for the granting of a temporary injunction?** 2. The law that governs the specific temporary injunction that the claimants pray for is provided under Order 40 Rule 2. It provides as follows. **“In any suit for restraining the defendant from committing a breach of contract or other injury of any kind, whether compensation is claimed in the suit or not, the plaintiff may, at any time after the commencement of the suit, and either before or after judgment, apply to the court for a temporary injunction to restrain the defendant from committing the breach of contract or injury complained of, or any injury of a like kind arising out of the same contract or relating to the same property or right”** 1. Having gone through the documentary evidence filed before the tribunal, there is no doubt that the 1st respondent applied for the loan of Ksh 650,000.00 which was guaranteed by the 1st, 2nd 3rd 4th and 5th claimants. Further, there is evidence that when 1st respondent defaulted in September 2023, the 2nd respondent reminded him through text messages and letters dated 15/7/2025, 29/9/2025 which were copied to the guarantors. 2. In response, each of 1st to the 5th guarantors wrote to the 2nd respondent on 9th and 10th 2025 respectively, requesting to be provided with the communication and documents plus the amount of the defaulted loan from the 2st respondent. This shows clearly that the guarantors were well aware and informed about the defaulted loan. 3. In addition, the guarantors stated the reason why each one of them was seeking for the information by stating as follows; 1st guarantor – “I would like to pursue him to pay Kenversity Sacco its arrears which he defaulted” 2nd guarantor “*I would like to pursue him to pay kenversity Sacco his arrears which he defaulted*”. 3rd guarantor, 4th and 5th guarantor - same wordings as 1st and 2nd guarantors. 1. The tribunal note that despite the assurances by the claimants that they would pursue the 1st respondent to pay the defaulted amounts, this did not happen hence the 2nd respondent issued a 14 days’ notice. This is a finding which shows that the 2nd respondent followed the right procedure as provided in their by-laws. The tribunal does not therefore agree with the claimant’s submission that they were not issued with adequate or lawful notice, instead we hold the view that the 1st to the 5th claimants were served with adequate notices. 2. Regarding the recovery of the defaulted loan through the guarantor’s salary, savings or deposits, this tribunal has always taken a position that guarantors constitute persons under a secondary obligation and they come to satisfy a defaulter’s debt in the event that the principal borrower fails to service the loan. According to Merriam Webster Dictionary, the term **“guarantor**” means a person who undertakes to answer for the payment of a debt or the performance of a duty of another in case of the others default or miscarriage. In the instant case, the claimants voluntarily guaranteed the 1st Respondent to be granted the loan of ksh650,000/ which gave assurance to the Sacco that the loan will be repaid even if the primary borrower fail to fulfil his obligation. 1. In **Mwaniki wa Ndegwa V. National Bank of Kenya Ltd & another (2016) eKLR** the court of appeal observed that; **“A guarantor becomes liable upon default by the principal debtor and that it is not up to the guarantor to see to it that the borrower complies with his contractual obligations but to pay on demand the guaranteed sum”** 1. While considering the arguments in the parties’ submissions, it is clear that both the parties understand that the matter at hand is based on a contract of guarantee. However, we note that the claimants base their arguments on the failure of the 2nd respondent to file board of management resolution regarding the recovery of the defaulted loan. The tribunal’s position is that recovery of defaulted loans is an administrative issue which falls under the governance of the Sacco, as such the tribunal looks at the substance of the instant matter rather than the technicalities of procedure. Rule 4 of the cooperative tribunal (practice and Procedure) Rules 2009 which guide as follows: “**This tribunal shall have power and discretion to decide all matters before it with due speed and dispatch without undue regard to technicalities of procedure”** *emphasis ours.* 1. In the light of the foregoing, it is our finding that 2nd respondent cannot be faulted because of doing what was expressly provided under the guarantee contract that was signed voluntarily by the claimants. Furthermore, it is our finding that the 2nd respondent demonstrated that they pursued the avenues of recovery prior to invoking the recovery from the guarantors. We are therefore not persuaded that the application dated 18/2/2026 deserve to be granted a temporary injunction. **Conclusion.** 1. The upshot of this matter is that the Claimant’s application dated 18/2/2026 does not meet the criteria to be granted Temporary injunction and is hereby dismissed. For preservation and continuity of the relationship between the Sacco and her members, we make no order as to costs. Ruling dated and delivered *virtually* at **Nairobi** this **23rd** day of **July, 2026.** **Hon. J. Mwatsama Chairperson****signed 23.7.2026** **Hon. Beatrice Sawe Member signed 23.7.2026** **Hon. Fridah Lotuiya Member signed 23.7.2026** **Hon. Michael Chesikaw Member signed 23.7.2026** **Hon. P. Aol Member signed 23.7.2026** Tribunal Clerk Jemimah Kololo for the Claimant. No Appearance for Kenversity. Ms. Muema for 2nd Respondent. Zacharia Kibe Muchiri – No Appearance. Parties granted 30 days to file documents. Pretrial directions on 15.10.2026. **Hon. J. Mwatsama Chairperson signed 23.7.2026**