Slain Lawyer Kyalo Mbobu Wins Ksh11 Million Loan and Family Home Legal Battle After Death

Court Clears Ksh 69M Debt Claim Against Slain Lawyer

Slain lawyer Mathew Kyalo Mbobu has won a legal battle over a Ksh11 million loan and his family home, months after his death.

The Milimani Commercial Court ruled that the interest and penalty terms attached to the loan were unconscionable and unenforceable.

The court also ordered the lender, Hypac Investments Limited, and Family Bank to discharge the loan and retransfer the property to Mbobu’s company.

Mbobu did not live to hear the judgment. Justice M.A. Otieno delivered the ruling on October 9, 2025, months after unknown assailants fatally shot the lawyer.

According to the judgment, Mbobu obtained the Ksh11 million loan from Hypac Investments Limited in January 2021, when the COVID-19 pandemic had caused financial difficulties.

He agreed to repay the loan within six months. However, the loan terms included a flat interest rate of 15% per month and a 5% weekly penalty for late payment.

As security for the loan, Mbobu transferred the title to his property, known as Title No. I.R. 83020/L.R. No. 15065/64, to Hypac Investments Limited.

The property included a residential home where Mbobu lived with his family.

Slain Lawyer Repaid Twice the Original Loan

The dispute arose after Mbobu made substantial payments towards the facility.

The court heard that the plaintiffs had paid Ksh 22 million, twice the original Ksh 11 million principal. In their case, the plaintiffs said they had actually repaid Ksh 24.6 million.

Despite the payments, Hypac later demanded Ksh 69.49 million from the plaintiffs.

The lender argued that the plaintiffs had defaulted and that interest and penalties had accumulated under the agreement.

Hypac also argued that Mbobu, being an advocate, had willingly signed the agreement and understood its terms.

High Court Rejects 15% Monthly Interest

Justice Otieno found the interest and penalty clauses excessively harsh.

The court noted that the 15% monthly interest, combined with the 5% weekly penalty, resulted in extraordinarily high annualised rates.

The judge held that the terms were “unconscionable and contrary to public policy.”

The court also rejected the argument that Mbobu’s profession as a lawyer meant that the terms should automatically be enforced.

“The 1st Plaintiff’s status as an advocate does not, in my view, automatically neutralize such inequality or justify the enforcement of a contract whose terms would ‘shock the conscience of the court,” Justice Otieno ruled.

The court relied on previous decisions which recognise that although parties are generally free to enter into contracts, courts can intervene where contractual terms are unfair, oppressive or unconscionable.

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Court Applies the in Duplum Rule

The judge also applied the in duplum rule, a principle aimed at preventing lenders from allowing interest and penalties to grow to unreasonable levels.

The court found that the principle applies beyond banks and financial institutions to other lenders.

Justice Otieno cited an earlier decision which held that the rule protects borrowers from exploitation and prevents lenders from turning defaulters into “profit-making machines.”

In Mbobu’s case, the court found that the plaintiffs had repaid Ksh22 million against the Ksh11 million principal.

“Accordingly, any claim for interest or penalties beyond the principal sum is unenforceable in law,” the judge held.

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Family Home Had Been Charged to Family Bank

The case also involved Family Bank after Hypac charged the property to the bank.

The plaintiffs argued that Hypac had created the charge without issuing the required 21-day notice under the loan agreement.

Family Bank defended its position, saying it was an innocent chargee that had relied on the property being registered in Hypac’s name.

The bank argued that it was not a party to the original loan agreement between Mbobu and Hypac.

The court acknowledged that Hypac had been registered as proprietor of the property. However, it found that its ownership was tied to the underlying loan arrangement.

Since the court had already determined that the loan debt was fully satisfied, it ruled that the charge could no longer stand as security for a debt that was no longer due.

Court Orders Return of Property

Justice Otieno ordered Hypac Investments Limited and Family Bank to discharge and retransfer the property to Riviera Estates Limited, the second plaintiff, within 30 days.

If they fail to comply, the Deputy Registrar of the High Court will execute the necessary transfer and discharge documents.

The plaintiffs were also awarded the costs of the case, together with interest at court rates from the date of judgment until payment.

However, the court declined to award the Ksh13.6 million refund sought by the plaintiffs, saying they had not provided sufficient evidence to reconcile and prove the alleged excess payment.

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