Court of Appeal Upholds Sh1.7 Million Award Against Co-Op Bank
The appellate court affirmed a High Court ruling that Co-operative Bank of Kenya unlawfully repossessed and sold a customer's vehicle, ordering compensation.
The appellate court affirmed a High Court ruling that Co-operative Bank of Kenya unlawfully repossessed and sold a customer's vehicle, ordering compensation.
· Updated
The Court of Appeal has upheld a High Court decision ordering Co-operative Bank of Kenya to pay a customer Sh1.7 million for unlawfully repossessing and selling his vehicle. A three-judge bench dismissed the bank's appeal, confirming the High Court's award to Peter Musya Kiteme.
Kiteme had purchased a Toyota Harrier valued at Sh2.95 million through a hire-purchase agreement with the bank, making a down payment and financing the balance. The agreement stipulated 48 monthly installments.
In May 2021, the bank repossessed the vehicle, claiming Kiteme was in arrears. Kiteme contested this, stating he had settled the outstanding amount and associated charges by June 2021. Despite these payments, the bank proceeded to sell the vehicle in September 2021 for Sh1.52 million.
The dispute centered on the Consumer Protection Act, which restricts repossession or disposal of goods if a consumer has paid two-thirds or more of the payment obligation without court leave. The court found Kiteme had met this threshold, rejecting the bank's argument that the Hire Purchase Act superseded this provision.
FAQ
What was the total amount awarded to the customer?
The Court of Appeal upheld an award of Sh1,777,541.28, plus exemplary damages, interest, and costs.
Why did the bank repossess the vehicle?
The bank repossessed the vehicle claiming the customer was in arrears of Sh455,029.
