Legal Alert | Kenya | Update on Registration of Lender Notices at Collateral Registry
There has been a recent development with regards to the perfection of securities at the Collateral Registry. The registration process procured through the e-citizen portal under the Business Registration Service (BRS) platform previously allowed an agent, such as a law firm, to register an initial notice on behalf of a creditor as long as the agent had the identification details of the parties. However, it appears that the BRS platform now requires the entity making the application to be the creditor. When we tried to register a client’s interest on the platform, the system generated an error message stating that the holder of the account must appear as a default creditor. As a result, we are not able to register a notice as an agent and therefore the creditor in whose favour a notice is being created will need to use their e-citizen platform to register the initial notice on the Collateral Registry.
On a related and rather welcome note, the system now does not have the requirement for one to key in the date of registration of a grantor or a creditor (for corporate entities). This has been a thorny issue as the dates appearing on many certificates of incorporation did not match those in the system. We were in many instances forced to find alternative solutions, such as requesting for updates or rectification on the system to be able to register notices. This was not only time consuming, but it also posed a risk for the creditor whose security could not be registered on the Collateral Registry without third party effectiveness given that the process of updating or rectification could take a while to resolve. This has now changed and all that is required is the registration numbers of the parties.
We are engaging with the BRS regularly and will update you on any further developments regarding the Collateral Registry and the BRS platform as a whole.
Should you have any questions regarding the information in this legal alert, please do not hesitate to contact Sonal Sejpal
ALN Kenya | Anjarwalla & Khanna
The content of this alert is intended to be of general use only and should not be relied upon without seeking specific legal advice on any matter.