[1987] KECA 21 (KLR)

[1987] KECA 21 (KLR)

The Court of Appeal held that the contract between the appellant and respondent, both Kenyan residents, for the lending of Indian Rupees in India was illegal and unenforceable under section 3(1) of the Exchange Control Act (cap 113). The Act expressly prohibits, without ministerial consent, any resident of Kenya...

Source-derived case information.

Citation
[1987] KECA 21 (KLR)
Parties
Appellant: Patel; Respondent: Singh
Court
Court of Appeal
Court Station
Court of Appeal at Nairobi
Jurisdiction
Kenya
Judgment Date
1 July 1987
Case Number
Civil Appeal 64 of 1985
Procedural Posture
Civil Appeal / Judgment on Appeal
Outcome
appeal dismissed
Judges
EN Juma, JM Gachuhi, FK Apaloo
Legal Topics
Illegality of Contract, Exchange Control Regulations, Unenforceability of Contracts, Foreign Currency Transactions
Source Language
english
Commercial and Corporate Civil Procedure Illegality of Contract Exchange Control Regulations Unenforceability of Contracts Foreign Currency Transactions

Source-derived case record

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 3 Authorities cited 4 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Patel

Appellant

Singh

Respondent

Procedural Posture

Civil Appeal / Judgment on Appeal

Legal Issues

  1. 1 Whether a contract between Kenyan residents for the lending of foreign currency outside Kenya is illegal and unenforceable under section 3(1) of the Exchange Control Act.
  2. 2 Whether the exemption in Exchange Control Circular No. 32 applies to the transaction in question.
  3. 3 Whether the court can enforce a contract made illegal by statute.

Ratio Decidendi

The Court of Appeal held that the contract between the appellant and respondent, both Kenyan residents, for the lending of Indian Rupees in India was illegal and unenforceable under section 3(1) of the Exchange Control Act (cap 113). The Act expressly prohibits, without ministerial consent, any resident of Kenya from lending or borrowing foreign currency outside Kenya except through an authorized dealer. The exemption in Exchange Control Circular No. 32 only regularized the transfer of funds for investment in the sterling area prior to a certain date and did not permit private lending of foreign currency between residents. The court further held that, regardless of the parties' knowledge...

Court Disposition

appeal dismissed

Orders

  • The appeal is dismissed.
  • There is no order as to costs.