https://new.kenyalaw.org/akn/ke/judgment/kecopt/2026/321

REPUBLIC OF KENYA IN THE COOPERATIVE TRIBUNAL AT NAIROBI TRIBUNAL CASE NO. 196 OF 2019 (Hon. J. Mwatsama- Chairperson, Hon. B. Sawe- Member, Hon. F. Lotuiya- Member, Hon. P. Aol- Member, Hon. M. Chesikaw-Member) LAINISHA SACCO SOCIETY LIMITED……………………………...CLAIMANT -VERSUS- IRENE WAIRIMU MBICI……….. …………………………….......RESPONDENT JUDGEMENT 1. The matter for determination is a Statement of Claim dated 2 nd April 2019. In the Statement of Claim, the claimant avers that the Respondent is its member, with membership number 6679- 22809. That the Respondent requested and was advanced a loan facility of Ksh. 400,000/- to be repaid at an interest rate of 13.5% per annum. That the Respondent fell in arrears, and the loan balance has accumulated to Ksh. 485,500. The Claimant is aggrieved and prays for: TRIBUNAL CASE NO. 196 OF 2019 a) Payment of loan balance plus the accrued interest amount of Ksh. 365,563/- b) Attachment and sale of paddy rice growing in the Respondent’s rice field/Respondent’s movable property or immovable property until full recovery is made c) The OCS Wang’uru Police Station to enforce compliance of the judgement d) Costs and Interest of this suit 2.The respondent entered appearance 9th May 2019, and filed a Statement of Defence dated the same day. In her Statement of Defence, she admits being a member of the Claimant, taking the said loan, and defaulting the same, but avers that the amount is not correctly calculated. The Respondent later, under certificate, informed this Tribunal that she was not the author of the said Statement of Defence and filed another Statement of Defence dated 7th May 2024. 3.The matter came for hearing 20th January 2026. Thereafter, both parties filed their submissions. TRIBUNAL CASE NO. 196 OF 2019 Claimants Case 4.During the hearing, one George Wang’ang’a Ndiga, the CEO of the Claimant testified. He adopted his witness statement and produced the documents he sought to rely on for his case. He informed this Tribunal that one Caroline Wamalwa rescinded her decision to pay the loan for the Respondent, through her letter dated 28th August 2018. On cross examination, he informed the Tribunal that the Respondent appeared in person to apply for the loan, and further that the shares in the subject account belong to the Respondent. 5.In their submissions, the Claimants submitted that the Respondent admitted receiving the loan, and that it was evident that the dealings that the Respondent had with one Caroline Wamarwa were held outside the scope of the loan agreement, and that the Claimant was not a party to the same. Respondent’s Case The Respondent testified as RW1. She adopted her witness statement and produced her documents. She testified that one TRIBUNAL CASE NO. 196 OF 2019 Caroline Wamarwa brought guarantors, and deposited her shares to the Respondent’s account, so that the Respondent could get her a loan. On cross-examination, she informed this Tribunal that she is the one who signed the loan agreement, received the loan disbursements, but that she gave it all to Caroline Wamarwa. During clarification, she said that she assisted Caroline to get the loan since she was registered with CRB and that at the time, the CEO of the Claimant was present. RW2 one Phyllis Wangechi also testified. She informed this Tribunal that she knows the Respondent. That she was also a guarantor of the subject loan herein, and that she had previously taken a loan for one Caroline Wamarwa and that Caroline repaid the same. In her submissions, the Respondent summarized the case, and informed this Tribunal that the CEO of the Claimant should be held responsible since he was aware of the transaction. ANALYSIS 6.The question before this Tribunal is whether the Claimant is entitled to the reliefs sought. The centre of this matter is a loan TRIBUNAL CASE NO. 196 OF 2019 that was advanced to the Respondent, and that has now fell into arrears. It is not in dispute that the Respondent was a member of the Claimant. It is also not in dispute that the Respondent applied for and was advanced a loan by the Claimant, and that the same has fallen into arrears. What is in dispute is the person responsible for repaying the said loan. According to the Claimant, it is the Respondent who should repay the same since she made the application for the loan and the same was channeled to her account. According to the Respondent, on the other and, she was taking the loan for one Caroline Wamarwa, who could not borrow on her own since she had been listed on CRB, and who has failed to repay the same. 7.Since the loan is not denied by either party, the question this Tribunal needs to answer is on liability for the loan. On who should pay the same. 8.The genesis of this a loan, is a contract between the lender and the borrower. It is not in dispute that the lender is the Claimant and the borrower is the Respondent. For the Respondent to transfer liability to a third party, the contract of loan has to varied with the agreement of both parties. What the TRIBUNAL CASE NO. 196 OF 2019 Respondent has produced, is a letter by one Caroline Wamarwa, dated 20th January 2018. From the Loan Application and Agreement Form produced by the Claimant, it is clear that the loan was approved on 16th November 2016. The alleged letter from Caroline came in more than one year later. It cannot therefore be said to have been part of the loan agreement contract. 9.Since the Respondent seeks to transfer the liability she has admitted to a third party, it would have been prudent for her to enjoin Caroline in this Claim, so that she can defend herself and be cross-examined. It is impossible for this court, and it is against the rules of natural justice to hold a third party liable before according them the chance to defend themselves. 10. In the case of Communications Commission of Kenya & 4 Others v. Royal Media Services Limited & 7 Others, Petition Number 7 of 2014, eKLR, the Supreme Court of Kenya defined an interested party as; “An interested party is one who has a stake in the proceedings, though he/she was not a party to the cause ab initio. He/she is one who will be affected by TRIBUNAL CASE NO. 196 OF 2019 the decision of the Court when it is made, either way a person feels that his interest will not be articulated unless he or she himself/herself appears in the proceedings and champions his or her cause.” 11. The Respondent clearly aver that one Caroline is the one who should be affected by the decision of this Tribunal, despite her not being a party to this case. It would have been prudent for her to enjoin her since there is a clear procedure for such provided by the law. 12. The upshot of the above is that we find merit in the Claimant’s claim. We hereby enter judgement for the Claimant against the Respondent for the payment of the loan balance plus interest accrued amount of Ksh. 365,563/, plus costs and interest till payment in full. Judgment dated and delivered virtually at Nairobi this 16th day of July, 2026. Hon. J. Mwatsama Chairperson Signed 16/7/2026 Hon. B. Sawe Member Signed 16/7/2026 Hon. Fridah Lotuiya Member Signed 16/7/2026 TRIBUNAL CASE NO. 196 OF 2019 Hon. M. Chesikaw Member Signed 16/7/2026 Hon. P. Aol Member Signed 16/7/2026 Court Assistant – J. Koki TRIBUNAL CASE NO. 196 OF 2019