Mhasibu Sacco Society Ltd v Kenya Union of Savings & Credit Cooperative Ltd (Tribunal Case E722 of 2024) [2026] KECOPT 311 (KLR) (30 July 2026) (Judgment)

**REPUBLIC OF KENYA** **IN THE COOPERATIVE TRIBUNAL AT NAIROBI** **CTC NO. E722 OF 2024** **(Coram: Hon. J. Mwatsama- Chairperson, Hon. B. Sawe- Member, Hon. F. Lotuiya- Member, Hon. M. Chesikaw- Member and Hon. P. Aol- Member.)** **MHASIBU SACCO SOCIETY LIMITED ……………….……...……..CLAIMANT** **VERSUS** **KENYA UNION OF SAVINGS &** **CREDIT COOPERATIVE LIMITED ….……………………..………RESPONDENT** **JUDGEMENT** 1. The matter for determination is Statement of Claim dated 10th September 2024. The Claimant is a Society registered under the Cooperative Society Act Cap 490 Laws of Kenya. The Claimant states they have been long standing Members of Respondent Society KUSCCO and on 17th July 2023 they invested a sum of Kshs. 450,142,943 with Respondent in a fixed deposit account. The amount at an interest rate of 13.5.% per annum with a maturity date of 16th January 2024. The amount that was to be paid at maturity was Ksh.480,527,592 inclusive of interest. 2. The Claimant further avers they had a savings account with the Respondent known as “*Jungu Kuu*” Account number 020583 which account had a balance of Kshs.11,205,566. Respondent held funds for deceased members on behalf of Claimant which amounted to Kshs.2,074,172.27. On 6th November 2023 the Claimant sent request for the Respondent to withdraw the fixed deposit amount and the *Jungu Kuu* savings balance via letter dated 10th November 2022 and 23rd November 2023. Respondent however intimated they were to wait until maturity date of 16th January which the Respondent is yet to deposit as at the time of filing suit. 3. The Respondent vide its correspondence on 31st January 2024 sent communication to the Claimant acknowledging the debt having stated they were having financial challenges. The Claimant aver the Respondent is in breach of contract, breach of fiduciary duty, Respondent being an apex organization for Saccos, unjust enrichment at the expense of the Claimant. The Claimant prays for: 4. **Payment of the sum of Kenya Shillings Four Hundred and Ninety-Three Million, Eight Hundred and Seven Thousand, Three Hundred and Thirty and Twenty seven Cents (Kshs.493,807,330.27) being the total amount owed to the Plaintiff.** 5. **Interest on the above sum at commercial rates from 17th January 2024 until payment in full.** 6. **An order directing the Defendant to provide a full account of all the Plaintiff’s funds held by the Defendant.** 7. **General damages for breach of contract and breach of fiduciary duty.** 8. **Costs of this suit.** 9. **Any other relief that this Honourable Tribunal may deem just and fit to grant.** 10. Claimant filed Witness Statement and List of Documents dated 10th September 2024 in support of their Claim: 11. Copy of the letter dated 10th July, 2023. 12. Copies of the letter dated 6th November, 2023. 13. Copy of the letter dated 10th November, 2023. 14. Copies of the letters dated 23rd November 2023. 15. Copies of the letters dated 4th December, 2023. 16. Copy of the letter dated 15th January, 2024. 17. Copy of the letter dated 31st January, 2024. 18. Copies of the demands letter dated 9th February, 2024. 19. Copy of the demands letter 20th February 2024. 20. Copy of the demand letter dated 28th February, 2024. 21. Copy of the demand letter dated 14th March, 2024. 22. The matter came up for hearing with CW1 – Peter Aburi adopting the Witness Statement dated 6th November 2025 filed on 14th November, 2025 and the same adopted as Claimant’s evidence in chief. The Claimant relied on List of Documents dated 10th September 2024 and the said documents produced as (EX 1-11). The Claimant intimated the Respondent signed a Certificate of balance dated 24th April, 2024, Claimant EX.6 acknowledging it owed Claimant Society 493 million exclusive of “*Jungu Kuu*” savings and deceased members claim. He confirmed Respondent had made payment in December 2025 to the tune of Kshs.4,392,703. Balance due is Kshs.489,014,627. 23. Claimant witness confirmed Respondent approached and called for a meeting with its creditors to discuss debt restriction plan but there was no amicable settlement. Their prayer is for settlement of the Kshs.489,014,627 plus cost of the suit. 24. The Respondent filed statement of Defence dated 6th February 2025. In the Defence the Respondent denied the contents of the Statement of Claim. The Respondent aver the Claim was filed in disregard to the consensus of the meeting held on 13th December 2024 where parties agreed to have Audit Report of Respondent concluded first. The Respondent aver the Claimant understood the risk of investing with Respondent Society and any delayed repayments are beyond the control of the Respondents. Respondent further state the Claims against Respondent if sustained there is a risk of causing panic in the Movement that is the Cooperative Movement in Kenya. Any premature refunds would jeopardize any recovery efforts and contradicts Governance reforms. The Respondent thus prays for Claimant case to be dismissed as having premature in light of the financial realities and they need to protect the Cooperative stability. 25. The Respondent filed List of Documents dated 6th February 2025 which had documents: 26. Respondents Bylaws. 27. Audit Report by PWC dabbed Project Jumuia situational Assessment Final Report dated 9.12.2024. 28. Minutes of the meeting held on 13th December, 2024 for all KUSCO affiliates at the all-saints cathedral Nairobi. 29. Respondent’s letter dated 4.2.2025 forwarding minutes. 30. Letter dated 14.1.2025 by SASRA. 31. Letter dated 5.12.2024 invitation to Mhasibu CEO for affiliates meeting. 32. Notice letter dated 27.11.2024 to all KUSCO affiliates. 33. CEO invite list for 6.12.2024. 34. Notice letter to affiliates for 5.12.2024. 35. Attendance list for members meeting for 13.12.2024. as evidence to their defence. The Respondent did not call any witness during trial and opted to close Respondent’s case relying fully on their Defence as filed as well as documents filed. Parties were directed to file and serve Written Submissions. Claimant filed Written submissions dated 30.6.2026. Respondent filed written submissions dated 24.7.2026. Having considered all the pleadings filed, documents, evidence adduced and written submissions by parties the issue for determination is, **Issue one: Whether the Respondent owes Claimant Kshs**.**489,014,627 and when the amount became due.** 1. The Claimant claim is for repayment of Kshs.493, 807,330.27 however during trial they conceded to Respondent having paid some amount and as at the day of trial the balance owing was Ksh. 489,014.627. The Claimant evidence was clear that Respondent owed them the amount after investment. The Respondent however, did not deny the Claimant’s claim and even acknowledged in their documents/letter written to Claimant marked as (EX.4 and Cl Ex.6). The Defence of Respondent is that the Claim of Claimant is premature after all stakeholders in the Cooperative Movement had a meeting on 13.12.2024 and Resolutions made for investing to be patient and not file cases against the Respondent. The Respondent defence is mere denial and seeks for extension of time to enable Respondent get back to financial stability. 2. The Respondent List of documents dated 6th February 2025 all allude to interventions that had been attempted to have Societies like Claimants to grant them more time. The Claim as it were stands uncontroverted. It is unfortunate the Respondent is experiencing financial challenges. However, a contract signed between the Claimant and Respondent still stands and where there is breach of a contract the “innocent” party as it were rightly pursue legal remedies. In this case the Claimant has filed a case against the Respondent. In the case of **PHOTO PRODUCTION VS. SECUNICOR (1980) AC 827** at page 848 Lord Diplock remarked that characteristically, commercial contracts are a source of primary legal obligation upon each party to it to procure that whatever has been promised will be done. Lord Diploch continued ….”***branches of primary obligation give rise to substituted or secondary obligations on the part of the party in default and may entitle the other party to be relieved from further performance of his own obligation…..”.*** 3. In the present case there is a clear breach of contract and Claimants are legally demanding of their right. In the case of **WILLIAM MUTHEE MUTHAMA VS. BANK OF BARONDA (2014) eKLR** CA observed that, ***“….in the Law of Contract, aggrieved party to an agreement must, in addition, prove that there was offer, acceptance and consideration. It is not only when those three elements are available then an innocent party can bring a claim against the party in breach…”*** The Respondent acceptance of the funds from Claimant to invest and acknowledgement of the same by the conduct and later trying to have them reinvest the funds suggest that both parties had formal arrangement as a binding contract from the Claimant documents as filed. A binding contract exists between the parties. 1. The Respondent owes the Claimant Kshs.489,507,330.27 and from the evidence the same is due. It is well known principles that contract cannot rewrite contracts. Parties are bound by the terms unless otherwise proven by elements like coercion, fraud or under influence which is not the case in the present case. **UPSHOT** 1. In the circumstances, judgement is entered in favour of the Claimant against the Respondent for the sum of Kshs.489,014,627.00 plus cost and interest from the date of judgement herein until payment in full. Judgment dated and delivered *virtually* at **Nairobi** this **30th** day of **July, 2026.** **Hon. J. Mwatsama Chairperson****signed 30.7.2026** **Hon. Beatrice Sawe Member signed 30.7.2026** **Hon. Fridah Lotuiya Member signed 30.7.2026** **Hon. Michael Chesikaw Member signed 30.7.2026** **Hon. P. Aol Member signed 30.7.2026** Tribunal Clerk Jemima No appearance for the Claimant Chimei for the Respondent **Hon. J. Mwatsama Chairperson signed 30.7.2026**