P.C.E.A Ruiru Co-operative Savings and Credit Society Limited v Kenya Union of Savings and Credit Cooperative Limited [2025] KECPT 132 (KLR)

P.C.E.A Ruiru Co-operative Savings and Credit Society Limited v Kenya Union of Savings and Credit Cooperative Limited (Tribunal Case 151/E226 of 2024) [2025] KECPT 132 (KLR) (30 January 2025) (Ruling)

Neutral citation: [2025] KECPT 132 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 151/E226 of 2024

Janet Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members

January 30, 2025

Between

P.C.E.A Ruiru Co-operative Savings and Credit Society Limited

Claimant

and

Kenya Union of Savings and Credit Cooperative Limited

Respondent

Ruling

1. The application before the Tribunal for determination is the Respondent’s Notice of Motion dated 25th October, 2024 and filed on even date, for orders:a.Spentb.That pending the hearing and determination of this application interparties, this Honourable Tribunal be pleased to defer and/or suspend the delivery of its judgment scheduled for 26th September, 2024 until such further and/or other suitable date.c.This Honourable Tribunal be pleased to direct and/or order the re-opening of the case to allow the Respondent/Applicant to table the new and/or important material or evidence relating to the question of interest.d.The Honourable Tribunal be pleased to issue such further orders as it may deem fit appropriate. And expedient to grant in the circumstances of this matter to advance the interest of justice other just consideration.e.The costs of this application be provided for.

2. The Application is premised on grounds that the Claimant/Respondent had made two deposits to the Respondent/Applicant Sacco special deposit number 4245 and deposit number 4246 on 1st January, 2023 and 14th January, 2023 respectively ; the principal amounts deposited by the Claimant/Respondent were Kshs. 71,946,475/= and Kshs. 13,093,080/= that the deposits made were meant to accrue an interest of 9. 2% within 12 months from the date of investment by the Claimant/Respondent; that the Respondent has however discovered new and important evidence that the deposits made by the Claimant/Respondent had not been invested hence there was no interest accrued on the Sacco special deposits made by the Claimant/Respondent that the Respondent/Applicant communicated to the Claimant/Respondent on or about December 2023 that the Commissioner for Cooperative Development inspected the Respondent/Applicant’s activities and issued a confidential Inspection Report ; that the key findings of the confidential Inspection Report 2023 released that the Respondent/Applicant was facing serious financial liquidity position of the Respondent/Applicant , that according to Grant Thornton there were weak internal controls and lack of completeness and accuracy of member deposits which could not be tracked and/or identified; that the management of the Respondent/Applicant has since discovered that the fixed deposits were not re-invested and that the same did not accrue interest as was initially expected; that during the hearing of the main suit , the Honourable tribunal did not have an opportunity to peruse , review and/or consider the new and important piece of evidence; that the Respondent/Applicant invites the Tribunal to consider the same;

3. The application is supported by the affidavit of Arnold Munene sworn on 25th September , 2024 wherein he reiterates the grounds on the face of the application and argues that it is in the manifest interests of justice, fairness and the public interest that the tribunal analysis this new evidence before rendering judgment that the Claimant/Respondent will not stand to be prejudiced by this application as they will be accorded an opportunity to interrogate and reply to the application.

4. The Claimant/Respondent filed a replying affidavit sworn on 4th October, 2024 by one Edward Ngarega Gacheru, who depones that he is the treasurer of the claimant /Respondent, that he is advised by the Claimant’s advocates that the notice of motion filed by the Respondent/Applicant lacks merit and is an abuse of the court process and a tactic by the Respondent/applicant to delay and circumvent the process of the Claimant’s claim of refund of its investment and interest, that the Claimant invested in the Respondent/ Applicant’s product being a fixed deposit savings to benefit its members as the deposit would earn interest disbursed to the Claimant at the end of maturity ; that the last roll over was on 1st January 2023 and 14th January 2023 respectively whereby the claimant’s deposits were to earn interest of 9. 2% per annum as at the maturity date of 31st December, 2023 and 13th January, 2023 respectively; that the respondent issued certificates number 4245 and 4246 respectively upon receipt of the monies; that on or around 20th April, 2023, the claimant wrote a letter informing the Respondent/Applicant of its intention to withdraw Kshs. 60,000,000/= from the then running investments and retain Kshs.25,000,000/= to continue earning interest until 31st December, 2023 that the Respondent/applicant failed to respond to the letter prompting several emails from the claimant inquiring on the same; that subsequently , the terms of agreement were re-negotiated and are interest two slated at 12% per annum ; new certificates were issued for the deposits; that it is therefore not true that the monies were not re-invested as claimed by the Respondent/Applicant that the Tribunal cannot re-write a contract between parties as it is being asked by the Respondent to do; that failure to manage the investment properly does not absolve the Respondent from its contractual obligation to the Claimant; that the extract of the inspection report referred to by the respondent/applicant was part of the documents in the list and bundle of documents filed by the Respondent/Applicant, hence is not a new material as it is already in the Tribunal’s record; that further the audit report of Grant Thornton dated May 2024, could have been included in the Respondent/Applicant’s supplementary list and bundle of documents which was filed and served on our advocates on 14th may 2024, that it is in the interest of justice.

5. Both parties filed written submissions in respect to their cases.

6. The Respondent/Applicants’ submissions dated 5th November, 2024 and filed on 12th November, 2024.

7. The Claimant/Respondent’s submissions dated 23rd October, 2024 were filed on 5th November 2024.

Analysis and Determination 8. We have considered the documents filed by the parties including the written submissions and cited authorities and have only one for determination ; that is whether or not, the Respondent/Applicant’s Notice of Motion Application dated 25th September 2024 has merit. It is not in dispute that the respondent/ applicant has participated in this matter all through to pre-trial and hearing and close thereof on 24th June 2024, and slating of judgment on 26. 9.2024 without going into the merits of the case which is pending judgment before us, we note that there is no dispute between parties that there was a contractual relationship between the claimant/Respondent and the Respondent/Applicant wherein the Claimant/Respondent agreed to invest and did deposit monies with the Respondent/ Applicant on a promise to earn interest over a period of time ending on 31st December, 2023.

9. On 25th September, 2024 one day before the date of scheduled for delivery of judgment, the Respondent/Applicant filed the Application herein, the substantive prayer being for an order that the Tribunal be pleased to direct and/or order the re-opening of the case to allow the respondent/applicant to table the new and/or important material or evidence relating to the question of interest.

10. From the totality of the evidence and submissions filed in respect to this matter, and we must ask ourselves several questions.

1. Whether the said evidence is actually new and if the Respondent/Applicant has provided sufficient reason why it did not produce the evidence before the case was heard and closed. 11. We note that as at the date the date when the case was fixed for hearing, the Inspection Report of the Commissioner for Cooperatives was already within the record of the Tribunal hence it is not a new material.

12. We also note and agree with the Claimant/Respondent that the audit of Grant Thornton Auditors report was inexistence before the hearing and more specifically, before the Respondent/Applicant filed its supplementary documentation on 14th May,2024. We therefore believe that the audit report was reasonably within the reach of the Respondent/Applicant before the hearing and with some diligence on the part of the respondent/applicant, would have been produced before or in the course of the hearing. It follows therefore that the Respondent/Applicant has not shown sufficient cause why the new evidence was not produced in good time.

2. Whether or not the said new material will make an impact on the judgment of the Tribunal. 13. It is worth rating that the issues raised by the Respondent/Applicant in respect to the said new material go to sow us that the audit report of the auditor is in regard to affairs of the Respondent/Applicant in totality whereas the matter before the tribunal relates to matters contractual and specific to the Claimant. It is our view any administrative or internal processes undertaken by the Respondent away from the Tribunal may or may not have an impact on the court cases against the Respondent/Applicant, as each case shall be considered in its own merit. It is our view, therefore, that the Respondent/Applicant has not demonstrated the impact, if any that the proposed new material would have on this particular, case outside the evidence already adduced.

3. Whether allowing the Respondent/Applicant’s application is prejudicial to the claimant/Respondent. 14. The claimant/Respondent came to the Tribunal to seek justice. It is the duty of the Tribunal to deliver justice without undue delay. The Tribunal, in a quest to conduct a swift litigation duly accorded both parties ample time to produce their evidence before the case was heard and closed. Indeed, the Respondent/Applicant was granted leave to file further documents well before the hearing date.

15. We concur with the court in the case of Rafiki Microfinance Bank Limited v John & Another (Civil Suit No. 49 of 2022(2023) KEHC23779(KLR), and find herein that the Respondent/Applicant having demonstrated the impact the material would have specifically in this case, it could be unjust and likely prejudicial to re-open this closed case and admit new evidence without clarity on its impact or benefit to this case, considering that the evidence regarding the inspection of report of the commissioner is already on record and there is every indication from the Respondent/Applicant’s Supporting Affidavit that the Inspection Report of the Commissioner which is already on record and referred to the Tribunal’s record not in variance with the Auditor’s Report.

16. In the upshot, the respondent/applicant has not convinced us to exercise our discretion in its favour in this particular case.

17. Consequently, we hold that the Respondent/Applicant’s notice of motion dated 25th September, 2024 lacks merit and we hereby dismiss the same with no order as to costs.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 30TH DAY OF JANUARY, 2025. HON. J. MWATSAMA - DEPUTY CHAIRPERSON - SIGNED - 30. 1.2025HON. BEATRICE SAWE - MEMBER - SIGNED - 30. 1.2025HON. FRIDAH LOTUIYA - MEMBER - SIGNED - 30. 1.2025HON. PHILIP GICHUKI - MEMBER - SIGNED - 30. 1.2025HON. MICHAEL CHESIKAW - MEMBER - SIGNED - 30. 1.2025HON. PAUL AOL - MEMBER - SIGNED - 30. 1.2025Tribunal Clerk MutaiMs. Wainana advocate for the ClaimantMs. Gatwiri advocate holding brief for Mr. Wairoto for Respondent/ApplicantJudgment on 27. 3.2025. HON. J. MWATSAMA - DEPUTY CHAIRPERSON - SIGNED - 30. 1.2025