So, a domiciliation payment is an arrangement between the bank and a borrower to domicile a payment due to the borrower from a third-party, with the bank. This arrangement does not release the borrower from his primary obligation to pay back the loan to the bank as at when due: and it does not make the third-party, a party to the loan agreement, such that the bank can sue the thirdparty on the loan agreement, when things do not work out as planned. “Assignment’, a legal term used in the context of the law of contract and of property, is the right to transfer “choses in action”, and a chose in action is essentially the right to sue: it is defined as “all personal rights of property, which can only be claimed or enforced by action, and not by taking physical possession” see Torkington v Magee[1902] 2 K.B. 431 Thus, it is a proprietary right in property, which has no tangible or physical existence, and is, therefore, not capable of being possessed physically. Examples of choses in action include a contractual right, such as a debt, shares in a company, insurance policies, negotiable instruments, bills of lading, patents rights, copyrights, trademarks, rights of action arising from a contract e.g. right to damages for its breach … The Appellants are right that there is a difference between a domiciliation arrangement and an assignment, and it boils down to the right to sue. A domiciliation arrangement is between the bank and the borrower. If the borrower fails to pay back the loan, the bank has no right to sue or take action against the third-party. With a legal assignment, the story is completely different as the Bank would have the right to sue the third-party, in its own name.
— A.A. Augie, JSC. Berger v Toki Rainbow (2019) – SC.332/2009