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19/08/2026

The Cost of Credit and the In Duplum Rule in Kenya

The cost of credit remains an important compliance issue for lenders and borrowers alike. Recent Kenyan jurisprudence continues to raise important questions about the accumulation of interest and penalties, particularly beyond traditional banking institutions.

The Banking Act, particularly Section 44A, provides the statutory framework for the in duplum rule for institutions within its scope. The broader principle has also been considered in cases involving non-bank lending.

Judicial guidance:

In Anne J. Mugure & 2 Others v Higher Education Loans Board [2022] KEHC 11951 (KLR), the High Court held that interest and penalties exceeding the principal amount violated the in duplum principle and stated that the rule applies to persons engaged in lending money.

The Court's reasoning is particularly significant for lenders outside the traditional banking sector, although the precise scope of the decision continues to be tested in subsequent litigation.

More recently, Kenyan courts have continued to scrutinize the legal framework governing non-bank lending and the enforceability of excessive credit charges. This makes transparent pricing, clear contractual terms, and appropriate regulatory licensing increasingly important for lenders.

Key compliance considerations for lenders:

• Clearly disclose interest rates, fees, penalties and other credit costs.
• Ensure lending activities are conducted under the appropriate regulatory licence.
• Review pricing models and default charges for proportionality and legal compliance.
• Maintain clear loan agreements and adequate records of customer disclosures.
• Regularly review lending practices against evolving judicial and regulatory requirements.

For borrowers, the lesson is equally important: a contractual interest rate is not necessarily immune from legal scrutiny simply because it was agreed upon.

For lenders, sustainable credit pricing requires more than commercial viability—it requires regulatory compliance, transparency and fairness.

At Madowo A Advocates, we advise lenders, businesses and borrowers on credit agreements, regulatory compliance, financial services law, debt recovery and lending risk.

12/08/2026

Foreign Companies, Cross-Border Lending & Doing Business in Kenya

Kenya continues to attract international lenders and investors. A recent Court of Appeal decision provides important clarification on when a foreign company is required to register in Kenya and whether failure to register prevents it from enforcing contractual rights before Kenyan courts.

Under Sections 974–978 of the Companies Act, 2015, foreign companies carrying on business in Kenya are required to register and comply with prescribed requirements.

Recent judicial guidance:

In Stichting Rabobank Foundation v Ava Chem Limited & Another, Civil Appeal No. E090 of 2025 (judgment delivered 31 July 2026), the Court of Appeal overturned a High Court decision that had struck out a foreign lender's claim because it was not registered in Kenya.

The Court held that registration under Section 974 is a regulatory obligation and does not, by itself, deprive an unregistered foreign company of legal capacity or access to Kenyan courts. It also clarified that a cross-border loan does not automatically amount to “carrying on business in Kenya”; that determination is fact-specific.

What does this mean for businesses and foreign investors?

• A foreign lender should assess whether its activities amount to carrying on business in Kenya.
• Registration requirements should be assessed based on the nature, frequency and continuity of activities.
• Cross-border financing structures should clearly document the parties' roles and jurisdictions.
• Foreign investors should undertake Kenyan corporate and regulatory due diligence before establishing a sustained commercial presence.
• Kenyan counterparties should understand the legal and enforcement implications of cross-border financing arrangements.

The decision provides greater certainty for international lenders, investors and Kenyan businesses accessing foreign capital, while confirming that registration obligations remain relevant where a foreign company genuinely carries on business in Kenya.

At Madowo A Advocates, we advise investors, lenders and businesses on cross-border transactions, corporate structuring, regulatory compliance, financing, and commercial risk in Kenya.

11/08/2026

Counterfeit Goods and Brand Protection in Kenya

Counterfeiting presents significant legal and commercial risks for businesses, particularly manufacturers, distributors, retailers, and owners of valuable brands.

The Anti-Counterfeit Act, 2008 gives the Anti-Counterfeit Authority (ACA) powers to investigate, seize, and detain suspected counterfeit goods, but those powers must be exercised within the limits prescribed by law.

Judicial guidance:

In Anti-Counterfeit Authority v Wanyange & 4 Others [2025] KECA 1540 (KLR), the Court of Appeal upheld the High Court's finding that ACA could not seize and indefinitely detain goods without establishing reasonable grounds to suspect that the goods were counterfeit.

The Court emphasized that ACA's statutory mandate is specifically directed at counterfeiting and that enforcement action must have a lawful basis under the Anti-Counterfeit Act. It further held that continued detention beyond the statutory period, without charges under the Act, was unlawful.

The decision is an important reminder that regulatory enforcement powers are not unlimited, and businesses also have rights when subjected to enforcement action.

Key compliance considerations for businesses:

• Register and actively protect your trademarks and intellectual property rights.
• Maintain documentation demonstrating the authenticity and lawful sourcing of goods.
• Conduct due diligence on distributors and suppliers.
• Establish procedures for responding to ACA inspections, seizures, and investigations.
• Seek legal advice promptly where goods are seized or enforcement action is commenced.

For brand owners, proactive IP protection can be significantly less costly than responding to counterfeiting after it has already affected the market.

At Madowo A Advocates, we advise businesses on intellectual property protection, anti-counterfeiting enforcement, regulatory investigations, and commercial risk management in Kenya.

10/08/2026

Data Protection: Compliance Must Be Demonstrable

For organizations processing personal data, having a privacy policy on the website is not the same as being compliant.

The Data Protection Act, 2019 requires data controllers and processors to demonstrate compliance with data protection principles, including lawfulness, fairness, transparency, purpose limitation, data minimization, and security.

Recent judicial guidance:

In Ceres Tech Limited v Office of the Data Protection Commissioner [2026] KEHC 2838 (KLR), the High Court considered an appeal arising from an ODPC determination concerning alleged unlawful processing of personal data in connection with a loan. The decision demonstrates the increasing role of the courts in scrutinizing ODPC enforcement and the conduct of organizations handling personal information.

The regulatory message for businesses is clear: organizations should be able to demonstrate what personal data they process, why they process it, the legal basis relied upon, who has access to it, and what safeguards are in place.

Key compliance considerations:

• Maintain an up-to-date data inventory and processing records.
• Document the lawful basis for processing personal data.
• Ensure privacy notices accurately reflect actual processing activities.
• Control access to personal data and maintain appropriate security measures.
• Keep evidence of consent, contracts, DPIAs, policies, training, and other compliance measures where applicable.
• Establish procedures for responding to data subject requests and regulatory complaints.

A compliance framework that exists only on paper may provide little protection when a complaint or regulatory investigation arises.

For businesses, the question is increasingly not simply “Are we compliant?” but “Can we demonstrate that we are compliant?”

At Madowo A Advocates, we advise organizations on Data Protection Act compliance, privacy governance, ODPC complaints and enforcement, DPIAs, data processing agreements, and regulatory risk management.

05/08/2026

Alternative Dispute Resolution (ADR) Clauses in Commercial Contracts

Commercial disputes are inevitable, but costly litigation does not have to be. Increasingly, Kenyan businesses are incorporating mediation, arbitration, and other Alternative Dispute Resolution (ADR) mechanisms into their contracts to facilitate efficient and confidential resolution of disputes while preserving commercial relationships.

Article 159(2)(c) of the Constitution of Kenya, 2010 recognizes and promotes alternative forms of dispute resolution, while the Arbitration Act, 1995 provides the legal framework for the recognition and enforcement of arbitration agreements and arbitral awards.

Judicial guidance:

In Nyutu Agrovet Limited v Airtel Networks Kenya Limited & Another [2019] eKLR, the Supreme Court reaffirmed Kenya's pro-arbitration policy, holding that court intervention in arbitral proceedings should be limited and exercised only in exceptional circumstances provided by law. The decision reinforces the principle of finality in arbitration while preserving the courts' supervisory jurisdiction in appropriate cases.

Similarly, in Geo Chem Middle East v Kenya Bureau of Standards [2020] eKLR, the Court of Appeal emphasized that where parties have voluntarily agreed to resolve disputes through arbitration, courts should respect and uphold that agreement, save where statutory grounds justify intervention.

These decisions underscore the importance of carefully drafted ADR clauses and the judiciary's commitment to respecting party autonomy in commercial transactions.

Key compliance considerations for businesses:

• Include clear and enforceable ADR clauses in commercial contracts.
• Specify the governing law, seat of arbitration, applicable rules, and appointment procedure for arbitrators or mediators.
• Consider multi-tier dispute resolution clauses requiring negotiation or mediation before arbitration.
• Review existing contracts to ensure dispute resolution provisions remain fit for purpose.
• Seek legal advice before commencing litigation where an ADR clause exists.

Poorly drafted dispute resolution clauses may result in jurisdictional disputes, unnecessary litigation, increased costs, and delays in resolving commercial disputes.

As commercial transactions become increasingly sophisticated, well-structured ADR mechanisms remain an essential component of effective contract management and regulatory risk mitigation.

At Madowo A Advocates, we advise businesses, investors, and institutions on commercial contracts, arbitration, mediation, dispute resolution, and regulatory compliance in Kenya.

03/08/2026

Environmental Impact Assessments and Meaningful Public Participation in Kenya

As Kenya accelerates infrastructure, energy, manufacturing, and real estate developments, compliance with environmental laws is no longer a procedural formality—it is a legal prerequisite. Project proponents must ensure that Environmental and Social Impact Assessments (ESIAs) are comprehensive, evidence-based, and supported by meaningful public participation before regulatory approvals are obtained.

The Environmental Management and Co-ordination Act (EMCA) and the Environmental (Impact Assessment and Audit) Regulations require projects likely to have significant environmental impacts to undergo an Environmental Impact Assessment before commencement.

Recent judicial guidance:

In Menengai West Stakeholders Forum & 10 Others v National Environment Management Authority & Another [2025] KEELC 1169 (KLR), the Environment and Land Court set aside an Environmental Impact Assessment licence after finding material deficiencies in the ESIA process, including failures relating to public participation and environmental assessment. The Court reaffirmed that environmental approvals must be founded on strict compliance with statutory requirements.

Similarly, in Amu Power Company Limited v Save Lamu & 6 Others, the courts underscored that meaningful public participation is a constitutional and statutory requirement in environmental decision-making, and that an EIA licence may be invalidated where the approval process fails to meet the standards prescribed by law.

These decisions demonstrate that environmental compliance is not merely about obtaining a licence—it is about ensuring the integrity of the entire approval process.

Key compliance considerations for project proponents:

• Conduct comprehensive Environmental and Social Impact Assessments before project implementation.
• Facilitate meaningful and inclusive public participation throughout the assessment process.
• Ensure ESIA reports are prepared by qualified experts and supported by accurate baseline data.
• Address environmental, climate, and social impacts through appropriate mitigation measures.
• Maintain complete documentation to demonstrate compliance with EMCA and related regulations.

Failure to comply may result in revocation of licences, project delays, litigation, regulatory sanctions, and significant financial losses.

At Madowo A Advocates, we advise developers, investors, public agencies, and project proponents on environmental compliance, regulatory approvals, infrastructure projects, and risk management.

31/07/2026

Disability Inclusion and Reasonable Accommodation in the Workplace

Kenya’s disability inclusion framework has been strengthened by the Persons with Disabilities Act, 2025, which places renewed emphasis on non-discrimination, accessibility, and reasonable accommodation for persons with disabilities. The Act specifically recognizes reasonable accommodation in the employment context and gives the National Council for Persons with Disabilities a mandate to promote equal employment opportunities and enforce accessibility and non-discrimination.

For employers, disability compliance is therefore not simply about recruitment quotas. It extends to how workplaces, recruitment processes, working arrangements, and employment decisions accommodate employees and prospective employees with disabilities.

Judicial guidance:

In Ngei v Teachers Service Commission [2025] KEELRC 3732 (KLR), the Employment and Labour Relations Court emphasized that an employee who acquires a disability is entitled to reasonable accommodation, protection from discrimination, and a safe working environment.

Similarly, in Macharia v Safaricom PLC [2021] KEHC 462 (KLR), the High Court addressed reasonable accommodation in recruitment after a candidate with visual impairment could not be fully assessed because the employer lacked the necessary assistive software. The decision highlights that accessibility obligations can arise before employment begins, not only after hiring.

Key compliance considerations for employers:

• Review recruitment and onboarding processes for accessibility and reasonable accommodation.
• Identify and address workplace barriers affecting employees with disabilities.
• Ensure employment decisions are not based on disability in circumstances prohibited by law.
• Document accommodation measures and engage affected employees in determining appropriate adjustments.
• Review HR policies, workplace facilities, technology, and disciplinary procedures for disability-inclusive compliance.

Failure to comply may expose employers to employment claims, discrimination findings, regulatory consequences, and reputational risk.

Disability inclusion should therefore be treated as a workplace governance and compliance responsibility, not merely a corporate social responsibility initiative.

At Madowo A Advocates, we advise employers and organizations on employment compliance, workplace governance, reasonable accommodation, and regulatory risk management in Kenya.

30/07/2026

Responding to ODPC Enforcement and Data Protection Complaints

Receiving a complaint or enforcement decision from the Office of the Data Protection Commissioner (ODPC) is not simply a matter of paying a penalty and moving on. Organizations must understand the statutory process for responding to regulatory action and challenging adverse decisions.

Under Section 64 of the Data Protection Act, 2019, a person against whom administrative action is taken by the Data Commissioner, including an enforcement or penalty notice, may appeal to the High Court.

Recent judicial guidance:

In Mulla Pride Limited v Office of the Data Protection Commissioner [2025] KEHC 11287 (KLR), the High Court emphasized that an aggrieved party challenging a decision of the Data Commissioner should use the statutory appeal mechanism under Section 64 of the Data Protection Act, rather than circumventing the prescribed process through a constitutional petition.

Similarly, in Swara Acacia Lodge v Office of the Data Protection Commissioner & Another [2025] KEHC 7 (KLR), the Court held that where the Data Protection Act expressly provides an appeal to the High Court, an aggrieved party should pursue that statutory avenue rather than seeking judicial review of the ODPC determination.

What should organizations do when facing ODPC action?

• Respond promptly to ODPC complaints and notices.
• Preserve all relevant records, policies, contracts, consent records, and processing evidence.
• Assess the ODPC's findings against the requirements of the Data Protection Act, 2019 and applicable regulations.
• Where an adverse determination is made, obtain legal advice on the statutory appeal process and applicable timelines.
• Strengthen internal data protection controls to prevent recurring complaints.

Regulatory exposure can become significantly more costly where an organization reacts late or uses the wrong procedural route.

Data protection compliance therefore requires both substantive compliance and procedural readiness.

At Madowo A Advocates, we advise organizations on responding to ODPC complaints, regulatory investigations, enforcement notices, appeals, and broader data protection compliance.

27/07/2026

Shareholder Agreements and Corporate Deadlock in Kenya

As businesses grow and attract new investors, shareholder disputes are becoming increasingly common. Disagreements over management, dividend distribution, share transfers, and strategic direction can quickly escalate into costly litigation if not addressed through robust governance structures.

The Companies Act, 2015 provides a framework for protecting shareholders' rights while promoting accountability and effective corporate governance. A well-drafted shareholders' agreement remains one of the most effective tools for preventing and resolving corporate disputes.

Judicial guidance:

In Amin Akberali Manji & 2 Others v Altaf Abdulrasul Dadani & Another [2015] eKLR, the Court of Appeal reaffirmed that majority shareholders must exercise their powers in accordance with the law and not in a manner that is oppressive or unfairly prejudicial to minority shareholders. The Court recognized the role of judicial intervention where corporate governance has broken down.

Similarly, in Patrick Muthuri v Kenatco Taxis Limited & 3 Others [2018] eKLR, the High Court emphasized that directors and shareholders must act in accordance with the Companies Act and the company's constitutional documents, reaffirming the importance of good faith and proper corporate governance in the management of company affairs.

These decisions highlight that effective governance is not merely a legal requirement—it is essential for preserving shareholder value and business continuity.

Key compliance considerations for companies:

• Adopt comprehensive shareholders' agreements covering governance, share transfers, and dispute resolution.
• Clearly define board and shareholder decision-making powers.
• Establish mechanisms for resolving deadlocks and shareholder disputes.
• Maintain accurate statutory registers, minutes, and corporate records.
• Ensure directors discharge their fiduciary duties in good faith and in the best interests of the company.

Weak corporate governance may expose businesses to shareholder litigation, regulatory scrutiny, operational paralysis, and loss of investor confidence.

As businesses continue to evolve, proactive corporate governance remains fundamental to sustainable growth and investor protection.

At Madowo A Advocates, we advise companies, shareholders, investors, and directors on corporate governance, shareholder disputes, mergers and acquisitions, and regulatory compliance in Kenya.

24/07/2026

Construction Contracts, Payment Obligations, and Risk Management in Kenya

Kenya's construction sector continues to experience significant growth, but it also remains one of the most litigation-prone industries. Delays in payment, variations, defective works, and poorly administered contracts frequently result in costly disputes. Developers, contractors, and consultants should ensure that projects are supported by well-drafted contracts and effective contract administration.

The legal framework is principally governed by the Law of Contract Act (Cap. 23), the Public Procurement and Asset Disposal Act, 2015 (for public projects), and the contractual terms agreed upon by the parties.

Judicial guidance:

In Kenya Pipeline Company Limited v Glencore Energy (UK) Limited [2015] eKLR, the Court of Appeal reaffirmed that courts will enforce the contractual obligations freely assumed by commercial parties and will not rewrite contracts simply because performance has become difficult or disputes have arisen.

Similarly, in National Bank of Kenya Limited v Pipeplastic Samkolit (K) Limited & Another [2001] eKLR, the Court of Appeal reiterated the long-standing principle that parties are bound by the terms of their contracts unless there are legal grounds such as fraud, coercion, or illegality to justify interference.

These decisions underscore the importance of careful contract drafting, proper project documentation, and strict compliance with contractual procedures throughout the project lifecycle.

Key compliance considerations for project stakeholders:

• Execute comprehensive written construction contracts before commencement of works.
• Clearly define scope, payment milestones, variation procedures, and dispute resolution mechanisms.
• Maintain accurate records of instructions, certifications, site meetings, and variations.
• Ensure prompt certification and payment in accordance with contractual timelines.
• Seek legal advice before terminating contracts or suspending works.

Failure to comply with contractual obligations may result in payment disputes, project delays, litigation, arbitral proceedings, and significant financial losses.

As infrastructure and real estate investments continue to expand, robust contract management remains essential to successful project delivery and effective risk management.

At Madowo A Advocates, we advise developers, contractors, consultants, financiers, and project owners on construction law, commercial contracts, dispute resolution, and regulatory compliance in Kenya.

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