COURT CORRIDORS

Consumers’ body to appeal interest cap ruling

In Summary

• Last week, High Court declared the law that capped lending rate at four percent above Central Bank Rate.

• Cofek said the ruling was grossly defective, suspect and one that raises serious integrity questions.

UNHAPPY: Cofek secretary general Stephen Mutoro at a past press briefing.
UNHAPPY: Cofek secretary general Stephen Mutoro at a past press briefing.

The Consumers Federation of Kenya (Cofek) is set to appeal the High Court decision that declared interest capping law unconstitutional.

The three High Court judges on Thursday last week found the provision of Section 33B (1) and (2) of the Banking Amendment Act, 2016 to be vague, imprecise, ambiguous and indefinite in a petition filed by Bonface Oduor in 2016.

The petitioner sought constitutional interpretation of the law that capped bank interests at four per cent above Central Bank Rate (CBR).

In an appeal notice seen by the Star, the consumer body, the second interested party in the petition that named Attorney General and CBK as respondents, says it is dissatisfied with part of the judgment and is seeking intervention   from the Court of Appeal.

"We intend to appeal to the Court of Appeal against the said judgment to the extent  that the decision by the superior Court found provisions in the Act to be vague imprecise, ambiguous indefinite  and its declaration that Section 33B (1) and (2) of the Banking Act are null and void,’’ the notice by Cofek read.

According to Cofek, the ruling was grossly defective, suspect and one that raises serious integrity questions on the part of Central Bank of Kenya (CBK) and Kenya Bankers Association (KBA).

"Indeed it is clear that the petitioner, one Bonface Oduor, does not represent interest of bank customers but those of CBK and KBA," Cofek said.

These sentiments are shared by Kiambu MP Jude Njomo, architect of the Banking Amendment Act 2016, who termed the court ruling as mockery to the rule of law.

He wondered why CBK could be a respondent in matter that it has been supporting all long. 

Last week, borrowers took to social media to express anger over the ruling, with many wondering why judges allowed commercial interests to override public interests.

However, the court did not immediately suspend the law but gave a 12-month window period for Parliament to reconsider provisions.