False testimony exposed in 20-year legal battle over Sh1.5 billion deal

Wednesday, December 17, 2025

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Milimani Law Courts in Nairobi.

Photo credit: File | Nation Media Group

By Brian Ocharo

Correspondent

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An acrimonious dispute between two investors over the 1981 acquisition of Sh1.5 billion worth of agricultural and livestock companies in Arusha by the Tanzanian government has once again exposed the Kenyan judiciary’s vulnerability to fraud aimed at securing unjust court victories.

At the centre of the controversy is a monetary award that the High Court has now ruled was founded on perjury falsely presented as legitimate dealings in Tanzania.

The long-running legal battle between Giovanni Gnecchi Ruscone and Hermanus Phillipus Steyn dates back to 2005 and has spanned nearly two decades across several courts, including the Supreme Court.

On December 5, the Estate of Hermanus Phillipus Steyn got a relief after the Court of Appeal declined to halt the execution of a High Court judgment delivered in May this year. That judgment overturned the 2007 award, terming it a product of fraud, and ordered a retrial.

In the same ruling, the appellate court dismissed Giovanni’s application seeking to compel the estate to deposit Sh842 million into a joint interest earning account as security pending the hearing of an intended appeal. The judges noted that Giovanni had failed to seek a stay of proceedings in relation to the ordered retrial.

“Since the applicant did not seek a stay of proceedings with regard to the ordered retrial, we will not consider the same, as the court has no jurisdiction to grant prayers not sought by a party. The application is devoid of merit and fails,” the court ruled.

In the 1970s, Hermanus held shares in companies operating in the Makuyuni area of Arusha, Tanzania. In 1981, the companies were unlawfully expropriated by the Tanzanian government. Two years later, Parliament enacted the Specified Companies Acquisition and Transfer of Management Act to provide for compensation. No compensation was paid to Hermanus or the affected companies.

Giovanni later represented that he could facilitate payment of the compensation and entered into a commission agreement entitling him to 10 per cent of any amount received. In 1993, Hermanus and the Tanzanian government executed a settlement agreement providing for the return of certain assets and compensation of $12 million (Sh1.5 billion).

In 2005, Giovanni sued Hermanus, claiming $1.2 million as commission under the agreement. Hermanus denied having received any compensation and accused Giovanni of misleading the court by presenting false evidence of payment.

During the trial, Giovanni and his witness Gabinus Edgar Maganga testified that compensation had been paid and assets restored, claiming that initial instalments had been processed and disbursed. Hermanus maintained that these representations were knowingly false.

In a judgment delivered on September 7, 2007, the High Court ruled in Giovanni’s favour, finding that Hermanus had been fully or substantially compensated and ordering him to pay the 10 per cent commission plus interest.

Hermanus appealed unsuccessfully to the Court of Appeal in 2010. His attempt to approach the Supreme Court also failed after the court declined to grant leave, finding that the matter did not raise issues of general public importance.

The case took a dramatic turn when Hermanus later discovered an arbitral award dated July 9, 2010 and corrected on September 14, 2010. The award found that the Tanzanian government had breached the settlement agreement and had not paid the compensation. The High Court of Tanzania adopted the award, issuing a decree on May 3, 2011.

Armed with this new evidence, Hermanus returned to the Kenyan High Court, arguing that the earlier judgment had been procured through fraud and perjury. He told the court that the execution proceedings based on that judgment were unjust, and that the appellate courts had ruled without the benefit of the new evidence.

He sought declarations that Giovanni had committed fraud and perjury, that the resulting judgment was null and void, and orders setting it aside. He also sought a permanent injunction restraining Giovanni from enforcing the judgment, or alternatively, an order for a retrial.

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Martin Richard Steyn testified on behalf of Hermanus, stating that no compensation had ever been received and that Giovanni’s claims were based on fabricated evidence.

Wilbert Kapinga, an advocate instructed in 2008 to pursue claims in Tanzania, said that despite the passage of 15 years, the government had failed to pay the full compensation or return the properties.

He testified that although two addendums were executed and about $5 million paid, the $12 million under the settlement agreement remained unpaid, as confirmed by the arbitral tribunal.

Giovanni denied all allegations of fraud and perjury, insisting that the 2007 judgment was lawfully obtained and enforceable. He claimed that Hermanus had wrongfully terminated the commission agreement to avoid paying his fees and argued that the issue of compensation had been conclusively determined and could not be re litigated.

He admitted, however, that he had no documentary proof that compensation had been paid at the time and said his belief was based on information from third parties. He also confirmed that he was not involved in later addendums to the settlement agreement.

In a judgment delivered on May 16 this year, the High Court found that the 2007 judgment had been procured through deliberate fraud.

“It is not merely a case of non-disclosure or mistaken belief. It is a deliberate fabrication of material facts designed to induce judicial error. In law and in equity, such a judgment cannot be allowed to stand,” the court held.

The court set aside the award, ordered a retrial of Giovanni’s commission claim, declared that he had committed perjury, and issued a permanent injunction restraining him from executing or benefiting from the fraudulent judgment.

Giovanni told the Court of Appeal that he intends to file an appeal, against the May 16, judgment that has set aside his 2007 award and ordered for a retrial of his claim against the Estate of Hermanus.

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