Kenya: Court Upholds Sh1.7m Award Against Co-Op Bank Over Vehicle Sale

What the report says

Kenya’s Court of Appeal has upheld a lower court decision requiring Co-operative Bank of Kenya to pay a customer more than Sh1.7 million after finding that the bank unlawfully repossessed and sold his vehicle. The case involved Peter Musya Kiteme, who had financed a Toyota Harrier through an asset-finance and hire-purchase arrangement and later disputed the bank’s handling of the repossession and auction process.

According to the report published by Capital FM and distributed by AllAfrica, the bank had claimed Kiteme was behind on payments when it seized the vehicle in May 2021. Kiteme argued that he had already settled the outstanding amount, along with auctioneer and storage charges, by mid-June 2021, but the vehicle was not returned and was instead sold in September 2021 for Sh1.52 million. The High Court had awarded him damages, and a three-judge appellate bench has now dismissed the bank’s challenge.

The judges said the award, which included compensation, exemplary damages, interest and costs, should stand. The decision turned in part on Consumer Protection Act rules limiting repossession or disposal of goods where a consumer has already paid two-thirds or more of the amount due, unless court permission is obtained. The court also rejected the bank’s argument that the dispute was governed only by the Hire Purchase Act. The ruling is significant because it reinforces consumer protections in vehicle-financing disputes and clarifies that lenders may face liability if they repossess and sell goods without following the law.