The Moveable Property Security Rights Bill 2016 extensively restates and reforms Kenyan law, providing for various ways in which personal property can be used as collateral for credit facilities. The 2016 Bill is set to reshape Kenyan secured transactions law in a number of interesting ways.
First, the 2016 Bill proposes to establish a central registry to facilitate registration of security interests in personal property (Section 19). It adopts a regime of notice filing, under which a single initial notice can be registered, under which many individual transactions will fall (Section 20). A public registry will be established, permitting searches both by the identifier of the grantor of security, and by the serial number of the collateral (Section 30). Priorities will then fall to be determined generally by time of registration (Section 38).
Second, the 2016 Bill provides expressly for the creation of security over intellectual property (Section 2). Whereas the Bill does not make provision for the various features unique to intellectual property, such as the need to grant licences, the explicit recognition of intellectual property as a category over which security may be taken is to be welcomed.
Third, the 2016 Bill provides for a defined regime of priorities between competing encumbrances. It deals with purchase money security interests (Sections 47-50), subordination (Section 51), and proceeds (Section 42), among other concepts.
It remains to be seen whether the 2016 Bill will be enacted, but it appears to be a promising step on the road to reform.
Click here to access the 2016 Bill.