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High Court denies Tech firm trial to quash bank loan
Bank of Africa's move to attach its assets

The High Court has dismissed the petition by business and technology solution firm, Seven Seas Technology owned by Michael Macharia in its bid to quash the Bank of Africa’s move to attach its assets over KSh 730,303,076 loan default at the current exchange rates.
While determining the matter, Justice Alfred Mabeya indicated that the plaintiff had accepted computations based on simple interest whereas there was a difference rate of interest for the USD currency (nine percent) and the Kenya shillings currency (thirteen percent).
The application was supported by the affidavit sworn by Macharia dated September 25, 2024, and that of Managing Director of Interest Rates Advisory Center (IRAC) Wilfred Onono seeking their prayers to be considered.
The grounds laid in the application were on the claims that there were fundamental mistakes incurred during the calculation of the outstanding loan balances before and after the consent was executed. He avers that before the consent, the bank charged Ksh 520,482,899 yet the recalculated amount by IRAC was Ksh 450,177,422 creating a difference of Ksh 70,305,476.
He claims that the consent that was dated December 2, 2019 was entered on the basis of fundamental mistake in the calculation of the outstanding balances claimed by the bank amounted to Ksh 520,482,899 as per the time and Ksh 729,930,921 as at May 5, 2024 when the complainant filed an application for attachment of debt.
Macharia attributed that the mistakes to the bank is obliged to sharing of untrue and inaccurate statements to them arguing that the differences on interest are substantial and that it would be unconscionable for them to be required to pay the said amount.
They presented before the court that they will suffer great prejudice if they are bound to pay the current amount claimed by the bank whilst the bank will suffer no prejudice if the orders Macharia is seeking are granted. “It will be the interest of justice to set aside the consent dated December 2, 2019 and the decree dated June 20, 2019.”
He contended that they discovered the mistakes after the review of the facility documents and computation of interest charged by the bank following the judgement in the Stanbic Bank of Kenya Limited and Sam towels Limited (petition No E005/2023) and an application by the bank for garnishee orders.
Thereafter the defendants proposed a settlement which the bank accepted and the parties executed the consent on December 2, 2019, where the bank accepted simple interest as a replacement for its claim for interest at their commercial rates. “All the computations after the consent were based on a simple interest rate.”
The bank contended that the defendants have never complained about the rate of interest applied on the facilities since the first facility was granted in 2008 and all the letters of offer allowed interest variation at the bank’s discretion. They indicated that no changes in interest rate as all interest was charged per the various facility letters.
The bank also cited that IRAC had purported to rewrite the contract between it and Seven Seas Technologies Limited. It claims that IRAC’s computations set out in the letter of offer dated July 29, 2024 were erroneous because it used simple interest at a flat rate of nine percent not withstanding the instances of default the bank exceeded the agreed on limit and simple interest only after the consent was executed in court and not prior to the execution of the consent.
It failed to take into account that the consent recorded in court factored simple interest on the dollar and the Kenya Shilling loans which the rate applied.
It accused the company of stopping reneging on the terms of the consent adopted on December 2, 2020 and waiting for over four years and seven months before applying to set aside the consent on September 25, 2024.
Further the bank indicated that there are no grounds to justify the setting aside of the consent as it was entered In good faith and lawful. It also added that the interest rate applicable before the consent was in accordance with the facility letters and after the consent remained at simple interest.
In determining the matter, Justice Alfred Mabeya said that ” the issue for determination is whether the discrepancies in the computation of the amounts owing are fundamental mistakes sufficient to warrant the setting aside of the consent dated December 2, 2019.”
Justice Mabeya also noted that clause 6.3.4 of the standard terms and conditions provides that, “If any sum payable by the borrower with respect to the foreign currency Facilities is not paid when due and the borrower shall pay the bank interest at the rate of ten percent, over and above the then subsisting rates rate of interest payable by the borrower.”
Justice Mabeya indicated that he was not persuaded there were mistakes in calculations of the interest before and after the consent which justify the setting aside of the consent.
On the issue of delay of four years and seven months from the date of the consent the judge indicated that, “it is my view the delay was inordinate.” Justice Mabeya rejected the plea by defendants to set aside the application dated September 25, 2024.