Vehicle & Equipment Leasing Limited v Jamii Bora Bank Limited [2020] eKLR Case Summary

Court
High Court of Kenya at Nairobi, Commercial & Tax Division
Category
Civil
Judge(s)
W. A. Okwany
Judgment Date
October 15, 2020
Country
Kenya
Document Type
PDF
Number of Pages
3

Case Brief: Vehicle & Equipment Leasing Limited v Jamii Bora Bank Limited [2020] eKLR


1. Case Information:
- Name of the Case: Vehicle & Equipment Leasing Limited v. Jamii Bora Bank Limited
- Case Number: HCCC NO. 295 OF 2017
- Court: High Court of Kenya, Commercial and Tax Division
- Date Delivered: 15th October 2020
- Category of Law: Civil
- Judge(s): W. A. Okwany
- Country: Kenya

2. Questions Presented:
The central legal issue presented before the court was whether the plaintiff, Vehicle & Equipment Leasing Limited, had sufficiently established a case for the granting of an injunction to prevent Jamii Bora Bank Limited from attaching and selling its assets pending the resolution of the suit.

3. Facts of the Case:
The plaintiff, Vehicle & Equipment Leasing Limited, entered into an asset financing agreement with the defendant, Jamii Bora Bank Limited, on 8th May 2015, amounting to Kshs 600,000,000. The plaintiff utilized this financing to acquire assets, which were subsequently leased to third parties. The third parties were making payments into the plaintiff's account at the bank to service the loan. However, the COVID-19 pandemic led to a decrease in payments from these third parties, resulting in the plaintiff falling into arrears on its loan obligations. The defendant issued a demand letter for the outstanding amount of Kshs 69,542,303.12 and threatened to repossess the leased assets. The plaintiff sought an injunction to prevent this repossession, arguing that the pandemic had caused its financial difficulties and that it would suffer irreparable harm if the assets were sold.

4. Procedural History:
The plaintiff filed an application for an injunction on 19th June 2020, which was opposed by the defendant through a Grounds of Opposition and a replying affidavit. The court entertained written submissions from both parties. The main issue for determination was whether the plaintiff had made out a case for the granting of the injunction.

5. Analysis:
- Rules: The court considered the established legal principles for granting an interlocutory injunction as outlined in *Giella v Cassman Brown & Company Limited (1973) E.A. 358*, which requires the applicant to demonstrate a prima facie case, the possibility of suffering irreparable injury, and the balance of convenience favoring the granting of the injunction.
- Case Law: The court referenced *American Cyanamid Co. v Ethicom Limited (1975) A.A.E.R. 504*, which reiterated the importance of establishing a serious issue to be tried, the inadequacy of damages as a remedy, and the balance of convenience. The court also cited *Joseph Muruka v National Bank of Kenya Ltd [2015] eKLR* to emphasize that it is not the court's role to renegotiate contractual terms based on economic conditions.
- Application: The court found that the plaintiff's indebtedness to the defendant was undisputed and predated the COVID-19 pandemic. The plaintiff's claims regarding the pandemic's impact on its financial situation did not satisfy the prima facie case requirement for the granting of an injunction. Consequently, the court determined that the plaintiff's application lacked merit and dismissed it.

6. Conclusion:
The court ruled against the plaintiff's application for an injunction, concluding that it had not established a prima facie case for the relief sought. The decision underscored the importance of contractual obligations and the limits of judicial intervention in renegotiating terms due to economic challenges.

7. Dissent:
There were no dissenting opinions in this case as it was a ruling delivered by a single judge.

8. Summary:
The High Court of Kenya dismissed the application for an injunction filed by Vehicle & Equipment Leasing Limited against Jamii Bora Bank Limited, citing the plaintiff's undisputed indebtedness and the lack of a prima facie case. The ruling highlights the court's adherence to established legal principles regarding injunctions and reinforces the significance of fulfilling contractual obligations, particularly in times of economic distress.

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