ADVOKS GLOBAL · KENYA
Movable Property Security Rights Act
2. Interpretation
Edition: 2022-12-31 · In force
2. Interpretation
In this Act, unless the context otherwise requires—"acquisition security right" means a security right in a tangible asset or intellectual property, which secures the obligation to pay any unpaid portion of the purchase price of the asset or other credit extended to enable the grantor to acquire it to the extent the credit is used for that purpose;"attachment to immovable property" means a tangible asset that, despite the fact that it is physically affixed to immovable property, it is treated as movable property;"Board" means the Board of Directors established under section 5 of the Business Registration Service Act (Cap. 499B);"Cabinet Secretary" means the Cabinet Secretary responsible for the registration of security rights;"collateral" means—(a)a movable asset that is subject to a security right; or(b)a receivable that is the subject of an outright transfer;"commingled assets" means funds credited to a deposit account or money mixed with other money so that they ceased to be identifiable;"commingled goods" means goods that are physically united with other goods in such a manner that their identity is lost in a product or mass;"competing claimant" means a creditor of a grantor or other person with rights in the collateral that may be in competition with the rights of a secured creditor in the same collateral, including—(a)another secured creditor of the grantor that has a security right in the same collateral;(b)another creditor of the grantor that has a right in the same collateral;(c)the insolvency representative in insolvency proceedings under the Insolvency Act (Cap. 53); in respect of the grantor; or(d)a buyer or other transferee, lessee or licensee of the collateral;"consumer goods" means goods primarily used or intended to be used by the grantor for personal, family or household purposes;"credit purchase transaction" means a hire-purchase agreement, a conditional sale agreement, a chattel leasing agreement or a retention of title agreement;"credit sale agreement" means an agreement for the sale of goods under which payment of the whole or a part of the purchase price is deferred and a security interest in the goods is created or provided for in order to secure the payment of the whole or a part of the purchase price;"debtor" means a person that owes payment or other performance of a secured obligation, whether or not that person is the grantor of the security right securing payment or other performance of that obligation, including a secondary obligor such as a guarantor of a secured obligation;"debtor of the receivable" means a person that owes payment of a receivable, including a guarantor or other person secondarily liable for payment of the receivable;"deposit account" means an account maintained by an institution licensed under the Banking Act (Cap. 488) or other written law;"electronic securities" means securities not represented by a certificate;"equipment" means a tangible asset other than inventory or consumer goods that is primarily used or intended to be used by the grantor in the operation of its business;"financial lease" means a lease under which at the end—(a)the lessee automatically becomes the owner of the asset that is the object of the lease;(b)the lessee may acquire ownership of the asset by paying no more than a nominal price; or(c)the asset has no more than a nominal residual value."future asset" means a movable asset, which does not exist or which the grantor does not have rights in or the power to encumber at the time the security agreement is concluded;"grantor" means—(a)a person that creates a security right to secure either its own obligation or that of another person;(b)a buyer or other transferee, lessee, or licensee of the collateral that acquires its rights subject to a security right; and(c)a transferor in an outright transfer of a receivable;"intangible asset" includes receivables, choses in action, deposit accounts, electronic securities and intellectual property rights;"intellectual property" means—(a)copyright as defined in section 2(1) of the Copyright Act (Cap. 130);(b)industrial property rights as defined in section 2(1) of the Industrial Property Act (Cap. 509);(c)trade mark as defined in section 2(1) of the Trade Marks Act (Cap. 506); and(d)any other related right;"inventory" means tangible assets held by the grantor for sale or lease in the ordinary course of the grantor's business, including raw and semi-processed materials;"money" means bank notes and coins issued by the Central Bank of Kenya or notes and coins authorized as legal tender by another country;"movable asset" means any tangible or intangible asset;"negotiable document" means a document, such as a warehouse receipt or bill of lading, that embodies a right to delivery of tangible assets and satisfies the requirements for negotiability;"negotiable instrument" means a bill of exchange, cheque and promissory note as defined in the Bills of Exchange Act (Cap. 27);"non-consensual creditor" means a creditor that has obtained a right in the collateral by operation of any law, including under an execution process or as a result of owed taxes and similar fees;"notice" means communication in the prescribed manner to the Registrar of information in an initial notice, an amendment notice or a cancellation notice;"notification of a security right in a receivable" means a communication by the grantor or the secured creditor under section 60 informing the debtor of the receivable that a security right has been created in the receivable;"outright transfer of a receivable" means the transfer by agreement from one person to another person of ownership to transferor's contractual right to payment of a monetary sum from a third person;"possession" means the actual possession of a tangible asset by a person or its representative, or by an independent person that acknowledges holding it for that person;"proceeds" means whatever is received in respect of the collateral, including what is received as a result of sale or other disposition or collection, lease or licence of the collateral, insurance proceeds, claims arising from defects in, damage to or loss of the collateral, and proceeds of proceeds;"receivable" means a right to payment of a monetary obligation, excluding a right to payment evidenced by a negotiable instrument, a right to payment of funds credited to a deposit account and a right to payment under security;"registrant" means the person who submits the prescribed registry notice form to the Registrar;"registration number" means a unique number assigned to a registered initial notice by the Registrar;"Registrar" means the person appointed under section 19 to supervise and administer the operations of the Registry;"Registry" means the registry established under section 19;"registry records" means the information in all registered notices stored by the Registrar, consisting of the records that are publicly accessible and the records that have been archived;"securities" has the meaning assigned to it under section 2 of the Capital Markets Act (Cap. 485A);"security certificate" means a certificate—(a)representing that the person entitled to the security is the person in possession of the certificate; or(b)identifying the person entitled to the security;"secured creditor" means—(a)a person that has a security right; and(b)a transferee in an outright transfer of a receivable;"secured obligation" means an obligation secured by a security right, excluding an outright transfer of a receivable;"security agreement" means—(a)an agreement, regardless of whether the parties have denominated it as a security agreement, between a grantor and a secured creditor that provides for the creation of a security right; and(b)an agreement that provides for the outright transfer of a receivable;"security right" means—(a)a property right in a movable asset that is created by an agreement to secure payment or other performance of an obligation, regardless of whether the parties have denominated it as a security right, and regardless of the type of asset, the status of the grantor or secured creditor, or the nature of the secured obligation; and(b)the right of the transferee in an outright transfer of a receivable;"serial number" means the serial number located on the chassis or body frame of a motor vehicle or trailer;"serial-numbered collateral" means a motor vehicle or a trailer as defined in section 2 of the Traffic Act (Cap. 403);"tangible asset" means all types of goods and includes motor vehicles, crops, machineries, livestock;"trust indenture" means any deed or document, however designated, by the terms of which a person issues or guarantees, or provides for the issue or guarantee of debt obligations secured by a security right and in which a person is appointed as trustee for the holder of the debt obligations issued, guaranteed or provided for under it;"trust receipt" includes an acknowledgment of the grantor in writing to deal with the collateral for the benefit of the secured creditor; and"working day" means any day from Monday to Friday, but does not include a public holiday.