SEASCAPES LIMITED v DEVELOPMENT FINANCE COMPANY OF KENYA LIMITED [2009] KECA 436 (KLR)
The bottom line
#Kenya's Court of Appeal ruled that a lender who fails to notify the borrower of foreign currency before disbursement cannot demand foreign-currency repayment, and must refund overpayments.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the loan advanced by the respondent to the appellant was advanced in foreign currency or in Kenya Shillings
- 2.Whether repayment of the loan was to be made in foreign currency or in Kenya Shillings
- 3.Whether the doctrines of waiver and estoppel could operate to deny the appellant a refund of the overpayment once the court had found the loan to be in Kenya Shillings
- 4.Whether the trial judge erred in awarding the appellant only 80% of costs
Key legal issues
#Currency of the loan under clause 2.11 of the loan agreement
The loan was advanced in and repayable in Kenya shillings because DFCK failed to determine and notify the foreign currency before disbursement as required by clause 2.11
The final disbursement was made by letter dated 27th August 1985, and the purported notification of foreign currency disbursement only came on 4th December 1985, over three months later. Clause 2.11 required determination of the specified currency using exchange rates prevailing on the date of disbursement and notification to the company. The court endorsed the majority decision in Wino Industries, holding the determination could not be made after disbursement, so the loan remained a Kenya shillings loan.
Application of waiver and estoppel to the overpayment claim
The trial judge erred in applying waiver and estoppel; once the loan was held to be in Kenya shillings, the appellant was entitled to a refund of the overpayment of Kshs.4,872,313/40
The court held that waiver operates to deny a party a right he knowingly agreed to forego, and estoppel precludes assertion of something contrary to a previous action or statement, measured by unconscionability. Those doctrines could only have been applied to defeat the allegation of non-compliance with clause 2.11, but the judge had already found non-compliance. The judge himself doubted the strength of the evidence, and there was no proof that the respondent acted to its detriment on the appellant's representations.
Duty of a first appellate court
As a first and last appeal, the Court must revisit, analyse and evaluate the evidence afresh and reach its own conclusions, while allowing for the trial court's advantage of seeing the witnesses
The court restated the classic first-appeal duty with reference to Selle v Associated Motor Boat Company Ltd. It then applied that duty, re-evaluating the evidence on waiver and estoppel and concluding independently that there was no evidence to sustain either doctrine.
Costs
The award of only 80% of costs was set aside and the appellant, having succeeded, was awarded all costs in the superior court and the costs of the appeal
The trial judge had denied the appellant 20% of costs because it failed on waiver and estoppel, but those findings were reversed on appeal. As the appellant had succeeded in its main claims and on appeal, full costs followed the event.
Legal principles established
#- Where a lender does not comply with clause 2.11 of the loan agreement by determining and notifying the borrower of the foreign currency of disbursement before disbursement, the loan remains a Kenya shillings loan as to both money of account and money of payment
- Once a court has made a specific finding that the loan was advanced and repayable in Kenya shillings, the doctrines of waiver and estoppel have no further role and any overpayment must be refunded
- Waiver requires that a party knowingly agreed to forego a known right; estoppel requires unconscionability in relying on a legal right, and neither doctrine can be applied where the evidence does not support it
Court orders
#- 1.Declaration that both the loan plus interest and charges were granted in Kenya shillings and the obligation to repay was in Kenya shillings, and that the loan was overpaid in respect of both the Deutschmark and sterling accounts
- 2.Overpayment of Kshs.4,872,313/40 to be paid to the appellant with interest at court rates from the date the suit was filed to date of full payment
- 3.Costs awarded by the superior court at 80% set aside and all costs in the superior court awarded to the appellant
- 4.Costs of the appeal to be paid by the respondent
- 5.All other orders of the superior court, specifically those marked (ii), (iii), (iv) and (v), confirmed
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 604 of 1994
- Jurisdiction invoked
- First and last appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction over High Court civil suits
Relief refused
#None of the appellant's substantive claims was refused; the appeal succeeded on the waiver/estoppel and costs grounds
The court allowed the appeal against the findings of waiver and estoppel and the partial costs award
Costs
Costs of this appeal to be paid by the respondent; costs in the superior court awarded in full to the appellant in place of the 80% award
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
We declare that both the loan granted to the appellant, the subject of the suit in the superior court plus interest and charges were granted in Kenya shillings and the obligation to repay was in Kenya shillings. The same loan has been overpaid both in respect of what the trial court marked as Deutschmark and sterling accounts
The overpayment in respect of the entire loan amounting to Kshs.4,872,313/40 at the date the suit was filed, be paid to the appellant together with interest at court rates as from the date the suit was filed to the date of full payment of the superior court's judgment to the date of full payment
Costs awarded by the superior court at 80% of the entire costs is set aside and in its place we award all costs in the superior court to the appellant
once he had found and held that the currency of the loan was Kenya shilling, that, was the end of the matter and if applying that currency there was overpayment, it had to be recovered
All other orders of the superior court specifically those marked (ii) (iii) (iv) and (v) are confirmed
Issues in the judgment
#The judgment states the suit properties were advertised for sale on Friday 25th February, 1993, but the advertisement by letter dated 27th January, 1994 - an apparent internal date inconsistency
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (6)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Muvanya v Insurance Regulatory Authority & 5 others; Chelimo (Interested Party) (Employment and Labour Relations Petition 48 of 2012) [2025] KEELRC 3755 (KLR)[2025] KEELRC 3755 (KLR)18 Dec 2025
- Fatuma R Sebe & another v Rashid Masaudi Nasoro & another [2019] KECA 883 (KLR)[2019] KECA 883 (KLR)14 Mar 2019applied
- Kenya Ports Authority v Salome Lilian Etenyi [2018] KECA 479 (KLR)[2018] KECA 479 (KLR)7 Jun 2018applied
- Kenya Power & Lighting Company Limited v Jane Wanjiru Gitau [2018] KECA 738 (KLR)[2018] KECA 738 (KLR)2 Feb 2018
- Erastus Maina Gikunu & another v Godfrey Gichuhi Gikunu & another [2016] KECA 126 (KLR)[2016] KECA 126 (KLR)4 Nov 2016followed
- Mwobi v Njoroge (Civil Appeal 314 of 2009) [2013] KECA 501 (KLR)[2013] KECA 501 (KLR)26 Jun 2013
Cite this brief
#Cite this brief
Caselaw, "SEASCAPES LIMITED v DEVELOPMENT FINANCE COMPANY OF KENYA LIMITED [2009] KECA 436 (KLR)", Case Analysis (2009). Civil Appeal 247 of 2002. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/436/eng@2009-10-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.