Nairobi, Sept. 21 -- The National Assembly has defended Section 44A (4) of the Banking Act, which excludes judgment debtors and court decrees from the protection of the in duplum principle, terming it Constitutional. This rule generally limits recoverable interest on a debt to the outstanding principal.

The law is at the centre of a petition by the owners of Nairobi's 14 Riverside complex, Cape Holdings Limited, who want the High Court to determine whether it is unconstitutional for allowing interest on court-awarded debts to grow beyond the principal amount and expose borrowers to potentially disproportionate financial claims.

Published by HT Digital Content Services with permission from Business Daily....