Lacking money is not a crime, judge rules in Sh788,000 debt case

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Misfortune can strike anybody anytime. 

Imagine borrowing Sh788,000 and then life throws a curveball, making it impossible to repay on time. Creditors might lose patience, take you to court and demand the money — or threaten jail.

That was the situation facing Reuben Oyamo Odoyo, a debtor in Eldoret whose failure to settle a Small Claims Court debt led to enforcement action and civil jail proceedings under the old framework for debt recovery.

But in a landmark ruling, the High Court at Eldoret has drawn a constitutional boundary that protects ordinary borrowers from being treated as criminals for lacking money.

Delivering judgment in Constitutional Petition No. E010 of 2024, consolidated with Petition No. E008 of 2024, Justice Reuben Nyakundi held that committing someone to civil jail solely because they are unable to pay a debt violates fundamental rights guaranteed under the Constitution.

The case stemmed from a Small Claims Court proceeding (SCCOM Case No. E247 of 2023, Jane Rose Ekisa v Reuben Oyamo Odoyo) where attempts were later made to enforce payment, including through detention orders.

The judge emphasised that the proper interpretation of civil jail provisions must be consistent with constitutional protections such as the right to personal liberty, human dignity, and fair treatment.

“The law cannot punish poverty. To send a person to jail simply because they do not have money is both unfair and unconstitutional,” Justice Nyakundi stated in his ruling.

Instead, the court made clear that civil jail is only permissible under limited circumstances — specifically where the debtor has the means but wilfully refuses to honour a valid obligation, or where there is evidence of bad faith such as hiding assets to evade payment.

Otherwise, throwing a borrower in jail simply because they lack funds is in conflict with the Constitution.

Justice Nyakundi also referred to established legal doctrine requiring courts to inquire into a debtor’s financial capacity before considering jail as an enforcement tool.

This ensures that the justice system does not punish inability rather than intent, a distinction that resonates with broader human rights standards.

The judgment has sparked renewed debate not just in legal circles but among financial institutions and civil society, with some arguing it could reshape debt enforcement practices in the country.

Chief Justice Martha Koome, while serving previously in the Court of Appeal, had made a ruling affirming that civil jail provisions for debt defaulters were prone to abuse and could violate fundamental rights.

She cautioned that ordinary Kenyans who experience temporary financial setbacks should not be criminalised.

In recent years, reports have emerged of debtors being detained for failing to pay relatively small sums, especially through Small Claims Court enforcement proceedings, evoking criticism that the system criminalises poverty rather than addressing the root causes of default.

The Odoyo ruling sends a strong message that the law must protect individual rights even in the context of debt recovery.

For Odoyo, the judgment is a major relief and a legal milestone.

His case creates a precedent for borrowers nationwide, affirming that citizens should not lose their freedom merely because they cannot pay.

The decision reinforces the principle that access to justice and basic dignity must be upheld, even when debts remain unsettled.