[2009] KEHC 1265 (KLR)
The court determined that, given the nature of the deposit as a commercial transaction and the absence of a fixed contractual rate, it was appropriate to award interest at a commercial rate of 16% from 9/2/2007 to the date of judgment, and thereafter at the prevailing court rate of 14% until full payment. This...
Source-derived case information.
- Citation
- [2009] KEHC 1265 (KLR)
- Parties
- Plaintiff: Perminus Njoroge Muiruri t/a Pesanet Investments; Defendant: Equity Bank Limited
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Case 581 of 2007
- Procedural Posture
- Civil Case / Ruling on Settlement and Interest Rate Correction
- Outcome
- Judgment for the plaintiff with corrected interest rates.
- Legal Topics
- Bank Account Disputes, Interest Rate Determination, Money Decree, Contractual Interest, Court Interest Rates
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Perminus Njoroge Muiruri t/a Pesanet Investments
Plaintiff
Equity Bank Limited
Defendant
Procedural Posture
Civil Case / Ruling on Settlement and Interest Rate Correction
Legal Issues
- 1 What is the appropriate rate of interest to be applied to the credit balance in the plaintiff's bank account.
- 2 Should the interest be at commercial rates or court rates, and from what dates should each apply.
Ratio Decidendi
The court determined that, given the nature of the deposit as a commercial transaction and the absence of a fixed contractual rate, it was appropriate to award interest at a commercial rate of 16% from 9/2/2007 to the date of judgment, and thereafter at the prevailing court rate of 14% until full payment. This approach balanced the commercial context of the deposit with the standard practice for post-judgment interest in Kenyan courts. The court relied on both English and Kenyan legal principles regarding the discretion to set interest rates where not contractually agreed, and the need to reflect the commercial reality and fairness to the parties.
Court Disposition
Judgment for the plaintiff with corrected interest rates.
Orders
- Judgment entered for the plaintiff for the credit balance of Kshs.4,939,200 on Account Number 0250290710113 as at 8/10/2008.
- Interest awarded at the rate of 16% from 9/2/2007 to the date of judgment.
Full Case Text
Judgment text and source record
22 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT
AT NAIROBI
MILIMANI LAW COURTS
Civil Case 581 of 2007
PERMINUS NJOROGE MUIRURIt/a
PESANET INVESTMENTS ………………………………... PLAINTIFF
VERSUS
EQUITY BANK LIMITED ………………………………. DEFENDANT
R U L I N G
On 12/6/09 parties approached the court for approval of decree which was filed and marked “for settlement”. The prayer item (B) was for interest at court rates or market rates whichever is higher. It was orderes:-
1. That judgment be and is hereby entered for the plaintiff for the credit balance on Account Number 0250290710113 at the close of business on 8/10/2008 amounting to Kshs.4,939,200/=. TOGETHER with INTEREST at commercial rates from 9/2/2007 until payment in full.”
Authorities relied upon is (1) Halsbury Laws of England, Volume 27
where it is headed “rate and recovery of interest.” Paragraph 11 – “No limit to agreed rate.” Paragraph 12 “amount usually allowed by courts.”
“Amount usually allowed by court. Where the rate of interest is not fixed by Statute agreement or usage there is no hard and fast rule as to amount that will be allowed and the rate may vary according to the practice of particular court, the value of money for the time being, and the circumstances of a particular case.”
In Commercial and speculative transactions interest rate is different. The rate of interest is governed by the proper law of the contract so that in practice the rate current at the place of payment will be allowed.
In our jurisdiction the rate of interest in money decree the court may order interest at such rate as court deems reasonable. But interest is now paid at court rates at the rate of 14%.
I have considered the submissions and authorities now quoted. The decree shall be corrected by inserting “together with interest at the rate of 16% from 9/2/2007 to the date of judgment and thereafter at the rate of 14% until full payment considering this deposit was kept in the bank.
It is so ordered.
DATED, SIGNED and DELIVERED at Nairobi this 3rd day of November, 2009.
JOYCE N. KHAMINWA
JUDGE