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Utafiti Savings and Credit Cooperative Society Ltd v Mutuku & 9 others (Commercial Appeal E061 of 2025) [2026] KEHC 8503 (KLR) (Commercial and Tax) (11 June 2026) (Judgment) Neutral citation: [2026] KEHC 8503 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Law Courts) Commercial and Tax Commercial Appeal E061 of 2025 PM Mulwa, J June 11, 2026 Between Utafiti Savings and Credit Cooperative Society Limited Appellant and Timothy Mutuku 1st Respondent Emily Kerandi 2nd Respondent Joseph Njoroge 3rd Respondent Mary Kirangu 4th Respondent Angeline Wafula 5th Respondent Anthony Sigei 6th Respondent Jeremiah Musili 7th Respondent Peter Getugi 8th Respondent Ann Kibe 9th Respondent Jennifer Wanjiku Kinyanjui 10th Respondent (Being an Appeal against the Judgment and Decree of the Cooperative Tribunal (Hon. B. Kimemia, Hon. J. Mwatsama, Hon. Beatrice Sawe, Hon. Fridah Lotuiya, Hon. Philip Gichuki, Hon. Michael Chesikaw and Hon. Paul Aol) Judgment 1.This is a first appeal arising from the judgment of the Co-operative Tribunal delivered on 29th August 2024 in Tribunal Case No. 035 of 2021. 2.By a plaint dated 27th August 2021 and amended on 7th September 2022, the 1st to 9th Respondents sued the Appellant and the 10th Respondent seeking, inter alia, orders compelling the 10th Respondent to resume repayment of her loan facilities, delisting the 1st to 9th Respondents as guarantors, restraining the Appellant from making deductions from their salaries, refund of monies allegedly deducted from their salaries, damages, costs and interest. 3.Upon hearing the dispute, the Tribunal entered judgment in favour of the 1st to 9th Respondents and ordered the Appellant to cease deducting their salaries towards repayment of the 10th Respondent’s loan, refund all monies deducted, and pay costs and interest. 4.Aggrieved by the decision of the Tribunal the Appellant filed a memorandum of appeal on the following grounds:i.The Tribunal erred in law and fact by not considering the contractual obligations of the guarantor more so that the latter willingly and voluntarily agreed to ensure that the entire loan is settled.ii.The Tribunal erred in law and fact by failing to adequately consider the Respondents' liability as guarantors.iii.The Tribunal erred in law and fact by finding that the Appellant acted prematurely and that it did not exhaust available avenues to pursue the primary debtor.iv.The Tribunal erred in law and fact in disregarding the entire evidence tendered by the Appellant and/or by making conclusions on critical issues without material evidence before it.v.The Tribunal erred in fact and law by concluding that the Appellant should cease deducting the Respondents’ salaries yet no evidence was adduced to show any such deduction.vi.The Tribunal erred in law and facts by failing to consider crucial evidence by the Appellant hence arrived at a grossly wrong conclusion.vii.The Tribunal erred in law and facts for joining the Appellant in the case without a formal application by the Respondents.viii.The Tribunal erred in fact and law in awarding costs to the Respondents when it was obvious that they had no case. 5.The appeal was heard by way of written submissions. Appellant’s submissions 6.The Appellant submits that the Tribunal failed to properly evaluate the evidence on record and thereby reached an erroneous conclusion. It contends that the evidence demonstrated that the 10th Respondent had been in persistent default of her loan obligations for an extended period of time, and that the Appellant had made numerous attempts to recover the debt through negotiations, correspondence, debt collectors, and other recovery mechanisms, all of which were unsuccessful. According to the Appellant, the default triggered the guarantors' obligations under the Loan Application and Agreement Form, which specifically stated joint and several liability and allowed for recovery through attachment of the guarantors' income, property, or shares. 7.The Appellant further contends that the Tribunal misinterpreted the contractual provisions, criticized them for rejecting alternative securities proposed by the 10th Respondent, and incorrectly concluded that they should have pursued the 10th Respondent's employer before proceeding against the guarantors. It is argued that the 10th Respondent left her previous job and did not disclose her new employer, thereby making such restitution impossible. The Appellant also criticizes the Tribunal for prioritizing the 10th Respondent's oral allegations over documentary evidence proving default and inability to repay, as well as for relying too much on the absence of the Sacco's bylaws rather than the specific provisions of the loan agreement. 1st to 9th Respondents’ submissions 8.The 1st to 9th Respondents oppose the appeal and endorse the Tribunal’s decision. They argue that the Appellant has failed to demonstrate any mistake of law, misinterpretation of facts, or inappropriate exercise of discretion that would justify this Court's interference. They argue that the Tribunal correctly interpreted the loan agreement and the law governing guarantees, and that a guarantor's liability is secondary and can only emerge when the guarantee is properly invoked in line with the contract framework. 9.The Respondents argue that the Appellant did not exhaust all available remedies against the principal debtor before seeking guarantors. They argue that the recovery proceedings against the guarantors were consequently premature. They also argue that the Tribunal correctly ordered the stoppage of salary deductions since the Appellant failed to provide documentation evidence proving the validity of the deductions. On joinder, the Respondents argue that the Appellant was a necessary party to the proceedings since it enforced the loan and guarantee commitments, and that its involvement in the litigation caused no prejudice 10th Respondent’s submissions 10.The 10th Respondent also opposes the appeal. She claims that the guarantors' duty was secondary and depended on the Appellant first pursuing the major debtor in accordance with the recovery procedure outlined in the loan agreement. It is her contention that the Appellant failed to exhaust all available remedies against her before moving against the guarantors. She claims that she offered alternative security and stated a readiness to settle the debt in installments, but the Appellant rejected those offers and proceeded against the guarantors prematurely. 11.The 10th Respondent argues that the 1st to 9th Respondents provided documentary evidence demonstrating the Appellant’s purpose to recover the amount from the guarantors. She contends that because the Appellant failed to disclose critical documents such as its by-laws and financial accounts, the Tribunal was entitled to conclude that the Respondents had established their case on a balance of probability. Regarding joinder, she contends that the Appellant was lawfully joined by order of the Tribunal and actively participated in the proceedings, that its presence was important for the complete adjudication of the dispute. Analysis and determination 12.This being a first appeal, the duty of this Court is well settled. The Court is obligated to re-evaluate the evidence on record and draw its own conclusions while bearing in mind that it neither saw nor heard the witnesses testify. This principle was stated in Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123. 13.Having considered the record of appeal, the judgment of the Tribunal, the memorandum of appeal and the parties' submissions, the issues that arise for determination are:i.Whether the Tribunal erred in its interpretation of the guarantors' obligations under the loan agreement.ii.Whether the Appellant exhausted the available remedies against the principal debtor before proceeding against the guarantors.iii.Whether the Tribunal properly evaluated the evidence before it.iv.Whether the Appellant was improperly joined to the proceedings.v.Whether the Tribunal's orders and award of costs should be disturbed. Whether the Tribunal mis-interpreted the guarantors' obligations 14.The 10th Respondent acquired loan facilities from the Appellant, and the 1st - 9th Respondents guaranteed them. 15.The Appellant claims that the guarantors were jointly and severally liable under the loan agreement, and that when the 10th Respondent defaulted, the guarantors could be sued directly. 16.Parties are obligated by the terms of their contract. In National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Others [2001] eKLR, the Court of Appeal stated:“A court of law cannot rewrite a contract between the parties. The parties are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proved.” 17.The Appellant relied on a guarantee agreement that included joint and multiple liability for the borrower's default. However, the same agreement outlined the procedure to be followed in the event of a default. 18.The Tribunal determined that the guarantors were only liable if the guarantee was properly invoked and the Appellant followed contractual recovery procedures against the principal debtor. 19.I find that the Tribunal properly addressed the legal nature of the guarantee and did not disregard the guarantors' contractual duties. Whether Appellant exhausted available remedies against the principal debtor 20.The Appellant argues that the 10th Respondent has been in default for over nine months, despite multiple attempts to collect the debt through meetings, letters, debt collectors, and negotiations. 21.There is no dispute that the 10th Respondent defaulted in repayment of the loan. The question is whether the Appellant demonstrated that it had exhausted the available avenues of recovery before pursuing the guarantors. 22.The Tribunal found that the Appellant failed to demonstrate compliance with the recovery process contemplated by the agreement and did not make all reasonable efforts to contact the principal debtor before pursuing recourse against the guarantors. 23.The Tribunal observed that guarantors constitute a secondary source of repayment and that creditors ought first to pursue the principal debtor before shifting the burden to guarantors. 24.The Appellant placed before the Tribunal evidence demonstrating various efforts undertaken to recover the outstanding loan from the 10th Respondent, including demand letters, meetings and other engagements. The record, however, also shows that the 10th Respondent proposed alternative repayment arrangements and offered additional security with a view to settling the indebtedness. The question is whether the Tribunal was entitled, on the evidence presented, to conclude that the Appellant had not sufficiently demonstrated that all reasonable recovery avenues against the principal borrower had been pursued before resorting to the guarantors. The Tribunal answered that question in the negative. 25.It is settled law that an appellate court does not interfere with findings of fact merely because it might have arrived at a different conclusion on the same evidence. Interference is only justified where the trial court or tribunal acted on a wrong principle of law, misapprehended the evidence, took into account irrelevant considerations, or failed to consider relevant matters. Having reviewed the record, I am not persuaded that the Tribunal's finding on this issue was unsupported by evidence or based on an erroneous legal principle. Whether the Tribunal properly evaluated the evidence 26.The appeal is directed not at any alleged error of law, but at the Tribunal’s evaluation of the evidence that was placed before it. The Appellant contends that the Tribunal failed to accord proper weight to the documentary evidence demonstrating the 10th Respondent’s default and instead relied on oral testimony which, in its view, ought not to have displaced the documentary record. The Appellant further faults the Tribunal for drawing adverse inferences from the failure to produce the Sacco’s by-laws. 27.I have carefully examined the proceedings and the material that was before the Tribunal. The record shows that the Tribunal considered the loan documents, the guarantee instruments, evidence of default, correspondence exchanged between the parties, and the various steps taken by the Appellant in pursuit of the outstanding debt. The Tribunal also considered the evidence relating to the substitute securities proposed by the 10th Respondent, the recovery efforts undertaken by the Appellant, and the circumstances under which enforcement measures were ultimately directed against the guarantors. 28.The Appellant contests the Tribunal's determination that deductions were made from the guarantors' salaries, citing insufficient evidence to sustain the conclusion. However, the record contains correspondence, resolutions, and other documentary material demonstrating the Appellant's intention to recover the debt through the guarantors, as well as evidence from which the Tribunal could conclude that the guarantors had been adversely affected by the enforcement process. 29.The Tribunal was justified in reaching its judgments after hearing witnesses and reviewing documents. I find no basis for this Court to conclude that the Tribunal overlooked important evidence or relied on considerations not supported by the record. Whether the Appellant was improperly joined 30.The Appellant contends that it was improperly joined to the proceedings. The record shows that the Appellant was joined pursuant to the Tribunal's orders and thereafter entered an appearance, filed a defence, participated in the proceedings, and called evidence. 31.Order 1 Rule 9 of the Civil Procedure Rules provides that:“No suit shall be defeated by reason of the misjoinder or non-joinder of parties, and the court may in every suit deal with the matter in controversy so far as regards the rights and interests of the parties actually before it.” 30.Under Order 1 Rule 10(2) of the Civil Procedure Rules, the Court has the discretion, at any stage of the proceedings and either on its own Motion or upon application by a party, to order the removal of any party who has been improperly joined as a plaintiff or defendant. 31.A proper party is one who is impleaded in the suit and qualifies the thresholds of a plaintiff or defendant under Order 1 rule 1 and 2 respectively, or as a third party or as an interested party and whose presence is necessary or relevant for the determination of the real matter in dispute or to enable the court effectually and completely adjudicate upon and settle all questions involved in the suit. (See Zephir Holdings Limited v Mimosa Plantations Limited, Jeremiah Matagaro & Ezekiel Misango Mutisya (2014) KEHC 1981 (KLR). 32.The dispute concerned the enforcement of a loan and guarantee relationship administered by the Appellant. Its participation was therefore necessary for the complete determination of the issues before the Tribunal. 33.I therefore find no merit in the complaint regarding joinder. 34.In the circumstances, I am not satisfied the Appellant has demonstrated that the tribunal misdirected itself on the law, ignored material evidence, or arrived at conclusions unsupported by the record. 35.The upshot is the appeal is devoid of merit and is accordingly dismissed in its entirety. 36.The judgment of the Co-operative Tribunal delivered on 29th August 2024 is hereby upheld. 37.The Appellant shall bear the costs of this appeal.It is so ordered. JUDGMENT DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBITHIS 11TH DAY OF JUNE 2026.P.M MULWAJUDGEIn the presence of:Mr. Kevin Mwalo for AppellantMs. Karuiru h/b for Mr. Githinji for 10th RespondentCourt Assistant: Lispa