SAVINGS & LOAN (K) LIMITED V. KANYENJE KARANGAITA GAKOMBE & AUTOMOBILE ASSOCIATION OF KENYA

JUDGMENT OF THE COURT

The central issue in this appeal is the vexed question whether a party who claims benefits under a contract to which he is not a party, can enforce that contract. A collateral issue in the appeal is whether a suit filed by such a party must invariably be struck out as disclosing no reasonable cause of action or as otherwise scandalous, frivolous and vexatious or an abuse of the court process. It is apposite to start by setting out the background to the appeal before considering the issues raised therein.

By an agreement in writing dated 20^th August 1997, the appellant, Savings and Loan Kenya Limited (S&L) and the 2^ndrespondent, Automobile Association of Kenya (AA) entered into what was described as “Agreement to Administer AAK Members Home Loan Scheme”. The recitals of the agreement stated that AA was desirous of extending financial assistance to its members to enable them acquire residential houses in Kenya. To that end S&L and AA had therefore designed, in a join…