Tue. Oct 27th, 2020


Aligning Results

Legal tussle: Tsusho ordered to repair and refurbish Vaell vehicles

4 min read

Tsusho Capital Kenya Limited, the in-house financer for the Toyota Kenya Group, has been ordered to repair and refurbish vehicles belonging to the regional leasing firm, Vehicle and Equipment Leasing Limited (VAELL).


In the court documents seen by the Stewards reporter, the lessor and Toyota Group’s in-house financier had entered into an agreement to sublease 285 vehicles.  Following the maturity of the lease and Tsusho’s failure to comply with the sublease contract compelled VAELL to seek an interim measure of protection through arbitration.

The Claimant through its lawyers submitted to the tribunal that the leased   units which included Toyota Land cruisers; Single cabs and double cabs, continue to waste away and are depreciating   in value and without proper storage or maintenance, yet they ought   to be disposed-off or leased to mitigate the imminent loss or damage. The units are estimated to cost KES. 2.4 billion during initial purchase.


The Applicant’s lawyer, Mr.  Dachi of Nyaanga & Mugisha Advocates pointed the Tribunal   to Clause 15 of the Agreement with respect to return of the fleet and restated   Appendix II to the Agreement. He submitted that the fleet was being held by the Respondent at a warehouse in Thika town, which action he submitted was an act of mischief and an attempt to frustrate the contract. Counsel for the lessor further submitted that there was no dispute over the ownership of the fleet.

Quipbank Equipment

According to the ruling seen by the Stewards the regional leasing firm contends   that the duration   of the leases expired in the course of 2018 and the parties did not agree on an extension of the lease periods, thereby obligating the return of the leased vehicles.

“It is the Claimant’s   position that the Respondent has refused to meet any return conditions. Further, it is the Applicant’s contention that the said motor vehicles were financed by Commercial Bank of Africa (‘CBA’) who hold securities over them and the repayment of the principal loan amounts as well as interest continues to accrue,” the lawyer added in his submission.

In view thereof, the Claimant through its lawyers sought an interim order of protection, as the Respondent lacks any contractual   or legal basis to refuse to refurbish, restore and return the vehicles.


In his ruling John M Ohaga, the Managing Partner of Triple Oklaw Advocates, said “it is for these reasons that the Tribunal was persuaded to find that the orders sought herein  are meritorious and therefore  the arbitrator ordered  and directed as follows:

“That as an interim  measure  of protection,  that the  Respondent (Tsusho Capital) be and is hereby  ordered   to forthwith meet  all the return  conditions documented in  the agreement between the parties  dated 15thNovember 2013 including refurbishing, removing police colours and other paraphernalia, repairing, repainting replacing missing and/or defective and/ or faulty parts, restoring and returning and/ or surrendering to the Claimant/Applicant the  motor  vehicles pending  the  hearing   and  determination  of the arbitration  proceedings envisaged  in the Lease Agreement.”

According to the arbitrator the order above were to be complied with within thirty (30) days failure to which the claimant was to go back to the court and seek courts guidance.

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The application sought inter alia in regard to the above orders is based on 14 grounds and supported by the Affidavit of Susan Muthoni, the Claimant’s Legal Officer.  The factual basis of the application is that the parties had entered into a motor vehicle lease agreement   in 2013 wherein the Claimant leased out several motor vehicles to the Respondent which subsequently subleased the same to the National Treasury for use  by the Kenya  Police the Sub-lessee’.

For further details and updates, please


Jared Oundo,

Corporate Communications


Email: jared.oundo@vaell.com,

Cell: +254 719408244/0780408244


Vehicle and Equipment Leasing Limited (VAELL) is the market leader in asset leasing, maintenance and consulting in Eastern and Central Africa region. It has presence in the auto mobile, healthcare, mining, agricultural, telecommunication, construction, gas and oil sector. It has managed to diversify and expand its portfolio by offering customized solutions to suit every client’s requirement and need. VAELL, the leading provider of integrated leasing services for a broad range of moveable assets and machinery across the region, has geographical coverage with fully fledged subsidiaries in Uganda, Rwanda, Tanzania and Zambia. The leasing firm has a correspondent relationship with other leasing companies in South Africa and India. It facilitates clients with vehicles and machinery throughout the region from any one country office across its network.

In 2014 VAELL won the award for the Best in Transport, in the Top 100 KPMG/Business Daily survey, and 2015 shot into Club 101 in the same survey. It has scooped 14 awards in the last 5 years. The leasing market leader was named in 2018 by East African Business Council Tanzania as the best East African Company in The Service Sector. The lessor has also been named in the South Africa’s Titan Building Nation awards in the outstanding achievement category.

VAELL was recently hosted by Nairobi Securities Exchange (NSE) onto its premium incubation and acceleration programme, Ibuka. VAELL also owns Quipbank Trust Limited, equipment sharing platform and TingA, East Africa’s largest tractor share platform.

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