' Introduction
1. By notice of motion dated 12/12/2024, the 1st defendant sought orders for leave to settle the decretal sum of Kshs. 21,136,467.67 by way of instalments on the terms proposed. The applicant also prayed for any further orders the court deemed just and for costs of the application.
2. The application was based on the grounds that the applicant, formerly operating Goodrich Schools in Embakasi, Nairobi, obtained a loan of Kshs. 19,500,000 from the respondent in 2018 secured by the school property, L.R. No. 209/21922. Following a government takeover in January 2020, the school was forcefully converted into a public institution, resulting in loss of business and income and frustrating the security offered for the loan.
3. The applicant further stated that the loss of its only income source, compounded by the demise of its majority shareholder in October 2020, left it unable to service the loan.
4. The applicant explained that out-of-court negotiations had been attempted but the repayment terms proposed by the respondent—36 months with interest at 17.8%—were untenable. The applicant maintained that it could only manage settlement of the decretal sum by installments spread over 120 months without interest, as the parties had earlier agreed on a fixed sum.
5. It was also noted that the applicant had challenged the government’s unlawful takeover of its property in ELC Petition No. E078 of 2024, in which the respondent was an interested party.
6. By a replying affidavit sworn on 14/1/2025, Chrispus Maithya, the acting Head of Commercial Transactions & Litigation of the National Bank of Kenya, opposed the subject application.
7. He deposed that the applicant’s proposal to settle the decretal sum of Kshs. 21,136,467.67 over 120 months was vague, unreasonable, and commercially untenable, as it would take 10 years and occasion financial hardship to the bank.
8. He outlined that the applicant was advanced a term loan of Kshs. 19,500,000 in 2018 secured by a charge over L.R. No. 209/21922, and that the applicant had prior knowledge of a government notice to vacate the premises. He noted that the loan was later restructured at the applicant’s request but the applicant nonetheless defaulted, prompting the bank to file suit.
9. He further deposed that the matter was referred to mediation where a partial settlement agreement was reached and adopted as an order of the court, fixing the decretal sum at Kshs. 21,136,467.67, with only the terms of repayment left for negotiation. A draft consent dated 23/8/2024 was prepared to conclude the matter, but the applicant failed to give instructions for its execution and subsequently changed advocates, demonstrating lack of good faith.
10. The deponent stated that the bank was entitled to apply for execution but indulged the applicant in repayment negotiations that ultimately failed due to the applicant’s conduct. He counter-proposed that the decretal sum be settled in full within one year with interest at 14% and costs. He rejected the applicant’s reliance on the death of its majority shareholder, arguing that the company is a separate legal entity with perpetual succession. He also asserted that the applicant had not produced audited accounts to prove its inability to pay.
11. He urged the court to dismiss the application, terming it a delay tactic to deny the bank the fruits of its judgment.
Analysis and determination
12. The 1st defendant and plaintiff filed written submissions dated 7/5/2025 and 27/5/2025 respectively, which I have considered together with the pleadings filed by the parties.
13. The 1st defendant seeks an order to pay the decretal amount of Kshs.21,136,467.67 in installments.
14. A background of this matter is that the plaintiff extended a loan of Kshs.19,500,000 to the 1st defendant in 2018. The loan was secured by a charge over property known as L.R No.209/21922. The 1st defendant defaulted in loan repayment which led the plaintiff to institute the present suit to recover the debt owed.
15. On 17th November 2023, this Court referred the dispute to Court-Annexed Mediation. The parties therein entered into a Partial Settlement Agreement dated 4th April 2024, whereby they agreed that the amount payable by the 1st Defendant to the Plaintiff was Kshs. 21,136,467.67. The only issue left unresolved was the terms of repayment of the said sum.
16. Subsequently, a draft consent dated 23rd August 2024 was prepared with a view to concluding the matter. However, the Applicant failed or declined to execute the same.
17. Order 21 Rule 12(2) of the Civil Procedure Rules empowers this Court to order payment of a decretal amount in installments post-judgment. It provides:-
“ After passing of any such judgment or decree, the court may on the application of the judgment-debtor and with the consent of the decree-holder or without the consent of the decree-holder for sufficient cause shown, order that the payment of the amount decreed be postponed or be made by instalments on such terms as to the payment of interest, the attachment of the property of the judgment-debtor or the taking of security from him, or otherwise, as it thinks fit.”
18. The principles governing the exercise of this discretion were well articulated in Keshval Jethabhai & Brothers Ltd v Saleh Abdul [1959] EA 260, where the Court held that:-
i. Creditors’ rights must be considered, but each case turns on its own merits;
ii. Mere inability of a debtor to pay in full at once is not sufficient reason;
iii. The debtor should demonstrate bona fides by arranging prompt payment of a fair proportion;
iv. Hardship to the debtor may be a factor, but only where indulgence can be given without prejudicing the creditor.
19. Similarly, in Maasai Kenya Limited v Hardware & Steel Centre Limited & another [2013] eKLR, the Court adopted with approval the decision in Hildegard Ndelut v Letkina Dairies Ltd & Another [2005] eKLR, where it was held that while a judgment debtor may genuinely face difficulties in paying at once, they must show seriousness by making fair and reasonable payment proposals. The judgment creditor, on the other hand, is entitled to prompt enjoyment of the fruits of judgment. The Court stated as follows:-
“A judgment creditor is entitled to payment of the decretal amount, which he should receive promptly to reap the fruits of the judgment. The judgment debtor might genuinely be in a difficult position in paying the decretal amount at once. However, he has to show seriousness in paying the amount. In that event, he should show his bona fides by arranging fair payment proposals to liquidate the amount.”
20. It follows therefore that although this Court retains unfettered discretion to grant payment by installments, such discretion must be exercised judiciously and on sufficient cause being shown.
21. In the present case, the decretal sum of Kshs. 21,136,467.67 was agreed upon in mediation. The 1st Defendant now seeks leave to settle the said sum in 120 monthly installments (a span of 10 years), citing loss of income following the repossession of its school by the Government.
22. While it may be true that the 1st Defendant lost the school, I note that it remains a going concern, but the Applicant/Defendant has not, in this application, furnished Court with the audited financial statements to demonstrate its true financial position. Equally, since the execution of the partial settlement agreement, the 1st Defendant has not made any bona fide payments towards liquidating the debt.
23. In my considered view, the proposal to repay the decretal sum over 10 years is neither fair nor reasonable. It would be highly prejudicial to the Plaintiff as it would unduly curtail its right to promptly enjoy the fruits of its judgment. A ten-year repayment plan is inordinately long and lacks bona fides, especially in the absence of any demonstrated effort by the 1st Defendant to make partial payments.
24. Accordingly, the application to settle the decretal amount in 120 installments is dismissed.
25. Nevertheless, and in the interest of balancing the hardship of the debtor with the rights of the creditor, the Court hereby orders that:-
i. The 1st Defendant shall pay 30% of the decretal sum within 90 days from the date hereof;
ii. The balance shall be paid in equal monthly installments within 24 months, together with interest at court rates on the reducing balance until payment in full;
iii. In default of compliance with (a) or in default of any one installment under (b), the entire outstanding balance shall immediately fall due and payable, and the Plaintiff shall be at liberty to execute.
26. Costs of the application is hereby awarded to the Plaintiff.
27. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
25TH SEPTEMBER 2025
ADO MOSES
JUDGE
I n the presence of: -
C/A – Moses
Ms. Adego h/b for Okubasu.……….………..for the Applicant
Keaton..………….…..... for the Respondent
'
1. By notice of motion dated 12/12/2024, the 1st defendant sought orders for leave to settle the decretal sum of Kshs. 21,136,467.67 by way of instalments on the terms proposed. The applicant also prayed for any further orders the court deemed just and for costs of the application.
2. The application was based on the grounds that the applicant, formerly operating Goodrich Schools in Embakasi, Nairobi, obtained a loan of Kshs. 19,500,000 from the respondent in 2018 secured by the school property, L.R. No. 209/21922. Following a government takeover in January 2020, the school was forcefully converted into a public institution, resulting in loss of business and income and frustrating the security offered for the loan.
3. The applicant further stated that the loss of its only income source, compounded by the demise of its majority shareholder in October 2020, left it unable to service the loan.
4. The applicant explained that out-of-court negotiations had been attempted but the repayment terms proposed by the respondent—36 months with interest at 17.8%—were untenable. The applicant maintained that it could only manage settlement of the decretal sum by installments spread over 120 months without interest, as the parties had earlier agreed on a fixed sum.
5. It was also noted that the applicant had challenged the government’s unlawful takeover of its property in ELC Petition No. E078 of 2024, in which the respondent was an interested party.
6. By a replying affidavit sworn on 14/1/2025, Chrispus Maithya, the acting Head of Commercial Transactions & Litigation of the National Bank of Kenya, opposed the subject application.
7. He deposed that the applicant’s proposal to settle the decretal sum of Kshs. 21,136,467.67 over 120 months was vague, unreasonable, and commercially untenable, as it would take 10 years and occasion financial hardship to the bank.
8. He outlined that the applicant was advanced a term loan of Kshs. 19,500,000 in 2018 secured by a charge over L.R. No. 209/21922, and that the applicant had prior knowledge of a government notice to vacate the premises. He noted that the loan was later restructured at the applicant’s request but the applicant nonetheless defaulted, prompting the bank to file suit.
9. He further deposed that the matter was referred to mediation where a partial settlement agreement was reached and adopted as an order of the court, fixing the decretal sum at Kshs. 21,136,467.67, with only the terms of repayment left for negotiation. A draft consent dated 23/8/2024 was prepared to conclude the matter, but the applicant failed to give instructions for its execution and subsequently changed advocates, demonstrating lack of good faith.
10. The deponent stated that the bank was entitled to apply for execution but indulged the applicant in repayment negotiations that ultimately failed due to the applicant’s conduct. He counter-proposed that the decretal sum be settled in full within one year with interest at 14% and costs. He rejected the applicant’s reliance on the death of its majority shareholder, arguing that the company is a separate legal entity with perpetual succession. He also asserted that the applicant had not produced audited accounts to prove its inability to pay.
11. He urged the court to dismiss the application, terming it a delay tactic to deny the bank the fruits of its judgment.
Analysis and determination
12. The 1st defendant and plaintiff filed written submissions dated 7/5/2025 and 27/5/2025 respectively, which I have considered together with the pleadings filed by the parties.
13. The 1st defendant seeks an order to pay the decretal amount of Kshs.21,136,467.67 in installments.
14. A background of this matter is that the plaintiff extended a loan of Kshs.19,500,000 to the 1st defendant in 2018. The loan was secured by a charge over property known as L.R No.209/21922. The 1st defendant defaulted in loan repayment which led the plaintiff to institute the present suit to recover the debt owed.
15. On 17th November 2023, this Court referred the dispute to Court-Annexed Mediation. The parties therein entered into a Partial Settlement Agreement dated 4th April 2024, whereby they agreed that the amount payable by the 1st Defendant to the Plaintiff was Kshs. 21,136,467.67. The only issue left unresolved was the terms of repayment of the said sum.
16. Subsequently, a draft consent dated 23rd August 2024 was prepared with a view to concluding the matter. However, the Applicant failed or declined to execute the same.
17. Order 21 Rule 12(2) of the Civil Procedure Rules empowers this Court to order payment of a decretal amount in installments post-judgment. It provides:-
“ After passing of any such judgment or decree, the court may on the application of the judgment-debtor and with the consent of the decree-holder or without the consent of the decree-holder for sufficient cause shown, order that the payment of the amount decreed be postponed or be made by instalments on such terms as to the payment of interest, the attachment of the property of the judgment-debtor or the taking of security from him, or otherwise, as it thinks fit.”
18. The principles governing the exercise of this discretion were well articulated in Keshval Jethabhai & Brothers Ltd v Saleh Abdul [1959] EA 260, where the Court held that:-
i. Creditors’ rights must be considered, but each case turns on its own merits;
ii. Mere inability of a debtor to pay in full at once is not sufficient reason;
iii. The debtor should demonstrate bona fides by arranging prompt payment of a fair proportion;
iv. Hardship to the debtor may be a factor, but only where indulgence can be given without prejudicing the creditor.
19. Similarly, in Maasai Kenya Limited v Hardware & Steel Centre Limited & another [2013] eKLR, the Court adopted with approval the decision in Hildegard Ndelut v Letkina Dairies Ltd & Another [2005] eKLR, where it was held that while a judgment debtor may genuinely face difficulties in paying at once, they must show seriousness by making fair and reasonable payment proposals. The judgment creditor, on the other hand, is entitled to prompt enjoyment of the fruits of judgment. The Court stated as follows:-
“A judgment creditor is entitled to payment of the decretal amount, which he should receive promptly to reap the fruits of the judgment. The judgment debtor might genuinely be in a difficult position in paying the decretal amount at once. However, he has to show seriousness in paying the amount. In that event, he should show his bona fides by arranging fair payment proposals to liquidate the amount.”
20. It follows therefore that although this Court retains unfettered discretion to grant payment by installments, such discretion must be exercised judiciously and on sufficient cause being shown.
21. In the present case, the decretal sum of Kshs. 21,136,467.67 was agreed upon in mediation. The 1st Defendant now seeks leave to settle the said sum in 120 monthly installments (a span of 10 years), citing loss of income following the repossession of its school by the Government.
22. While it may be true that the 1st Defendant lost the school, I note that it remains a going concern, but the Applicant/Defendant has not, in this application, furnished Court with the audited financial statements to demonstrate its true financial position. Equally, since the execution of the partial settlement agreement, the 1st Defendant has not made any bona fide payments towards liquidating the debt.
23. In my considered view, the proposal to repay the decretal sum over 10 years is neither fair nor reasonable. It would be highly prejudicial to the Plaintiff as it would unduly curtail its right to promptly enjoy the fruits of its judgment. A ten-year repayment plan is inordinately long and lacks bona fides, especially in the absence of any demonstrated effort by the 1st Defendant to make partial payments.
24. Accordingly, the application to settle the decretal amount in 120 installments is dismissed.
25. Nevertheless, and in the interest of balancing the hardship of the debtor with the rights of the creditor, the Court hereby orders that:-
i. The 1st Defendant shall pay 30% of the decretal sum within 90 days from the date hereof;
ii. The balance shall be paid in equal monthly installments within 24 months, together with interest at court rates on the reducing balance until payment in full;
iii. In default of compliance with (a) or in default of any one installment under (b), the entire outstanding balance shall immediately fall due and payable, and the Plaintiff shall be at liberty to execute.
26. Costs of the application is hereby awarded to the Plaintiff.
27. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
25TH SEPTEMBER 2025
ADO MOSES
JUDGE
I n the presence of: -
C/A – Moses
Ms. Adego h/b for Okubasu.……….………..for the Applicant
Keaton..………….…..... for the Respondent
'