Kenya’s High Court has ruled in favour of I&M Bank, allowing the lender to recover Ksh.864.7 million from Buzeki Enterprises Ltd., a transport and logistics firm owned by businessman and politician Zedekiah Bundotich Kiprop.
The case revolves around a promissory note issued by Buzeki Enterprises in 2016.
A promissory note is simply a written promise to pay a specific amount of money by a certain date. In this instance, the court found that the document was clear and unconditional, meaning the company had committed itself to pay, without attaching any special conditions.
The dispute dates back to 2016 when Buzeki Enterprises entered into a deal with RT (East Africa) Ltd. to buy more than 100 trucks and trailers worth over Sh864 million. To settle the bill, Buzeki Enterprises issued promissory notes totaling Ksh.864,758,278.
RT, which was a customer of I&M Bank, later transferred the promissory note to the bank as security.
The bank advanced money to RT on the strength of Buzeki’s written promise to pay. However, when the payment deadline of November 30, 2016 arrived, no money was paid. I&M Bank then moved to court as the legal holder of the promissory note.
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Buzeki Enterprises argued that payment was tied to the planned sale of Taru Ranch in Kwale County, and since that land sale did not go through, the debt was not yet due. A company director told the court the promissory notes were not meant to create immediate liability.
But the judge dismissed this argument, in that promissory note was straightforward and contained no mention of Taru Ranch, land sales, or any other conditions.
“The instrument is pristine,” the judge said, stressing that what is written on the face of such a document is what binds the parties.
The court further ruled that allowing verbal explanations to alter the meaning of a clear financial instrument would undermine business certainty. In simple terms, if promissory notes could later be changed by oral claims, they would lose their value as reliable commercial tools.
The judge also criticized Buzeki Enterprises for introducing the Taru Ranch argument late in the proceedings, saying it had not been included in the original defence and amounted to an attempt to ambush the other side.
On the question of whether I&M Bank had the right to sue, the court was clear that RT had legally assigned its right to receive payment to the bank.
Since Buzeki’s obligation to pay did not change, its consent was not required for the transfer.
In the end, the High Court entered judgment in favour of I&M Bank for Ksh.864.7 million, plus interest at court rates from the date the case was filed.
Buzeki Enterprises was also ordered to cover the legal costs.
