Bank challenges Tuju's bid to avoid loan repayment
Jubilee Party Secretary-General Raphael Tuju. He is required to repay a loan owed to East Africa Development Bank. PHOTO | FILE | NATION MEDIA GROUP
What you need to know:
- Mr Tuju said that the judgment which was adopted by the High Court denied him his rights to a fair hearing.
- Queens Counsel Daniel Toledano said that East Africa Development Bank had all the rights to get back its money.
East Africa Development Bank has now asked the High Court to dismiss a case filed by Jubilee Party Secretary-General Raphael Tuju, who is seeking to have an earlier judgment that ordered him to repay a Sh1.5 billion loan set aside.
The bank’s legal consultant, Ms Lynne Wells, said in her affidavit that the application lacks merit since the issues Mr Tuju raises did not arise at the previous hearings.
The case involves Mr Tuju through his company Dari Limited and East African Development Bank, which lent him the money in 2015.
At some point, Mr Tuju stopped servicing the loan, and the bank then moved to London for arbitration as per the contract terms between them.
The arbiter heard the application and ruled in favour of the bank. Mr Tuju appealed the judgment but a Court of Appeal judge in London dismissed the appeal.
The bank then filed the London judgment in Kenyan courts, where it was adopted as per Foreign Judgments (Reciprocal Enforcement) Act.
Mr Tuju then applied to the High Court to have the adopted judgment set aside on grounds that the judge in London ignored rules of natural justice.
COURT JUDGMENT
Through Lawyer Paul Nyamondi, Mr Tuju said that the judgment which was adopted by the High Court denied him his rights to a fair hearing.
But Ms Wells said that the court lacks jurisdiction to entertain the present application by Mr Tuju, since the case was decided by an English court and whose judgment has been adopted by the High Court of Kenya.
“I am advised by the bank's advocates, which advice I believe to be accurate, that the rights, obligation, duties, benefits and sanctions in the Facility Agreement and Guarantee and Indemnity were private and made between private persons and entities.
The obligation to pay the loan facility through the enforcement of the English court judgment and order therefore does not involve the public, and no evidence has been demonstrated by Mr Tuju that the execution will have any impact on interest, rights and/or liabilities of any members of the public,” said Ms Wells.
The legal consultant also asked the court not to issue a stay of execution order since no evidence of execution has been furnished in the court.
LOAN PURPOSE
She further states that the application by Mr Tuju has been done prematurely, since the rules state such a move can only be done 14 days after he has been served with the adopted judgment, which was not the case.
“I was present in before the English court during the entirety of the hearing and when the English court judge delivered his judgment. At no time whatsoever was the allegation made by Mr Tuju now makes, namely that it was fraudulent of the judge to hear the case and to deliver the judgment. Indeed, this Honourable court ought to examine the parties skeleton arguments before the English court and note that the allegation of fraud was never canvassed,” argues Ms Wells.
Court documents showed that Mr Tuju’s Dari Limited entered into an agreement with the bank on April 10, 2015, under which it agreed to give Dari a $9.3 million (Sh943.9 million) loan.
The loan was for the construction of Sh100 million two-storey bungalows sitting on a 20-acre forested land dubbed Entim Sidai and purchase of a 94-year-old bungalow built by a Scottish missionary, Dr Albert Patterson, which currently operates as a high-end restaurant.
FILE AFFIDAVIT
In his affirmed ruling, Queens Counsel Daniel Toledano, who presided over the arbitration, said that East Africa Development Bank had all the rights to get back its money.
The judge therefore entered a summary judgment against Mr Tuju. Upon appeal, he lost the case.
The bank then moved to have the judgement adopted by the Kenyan court to make it enforceable.
Justice Wilfrida Okwany said the bank had satisfied the conditions for the judgment to be enforced in Kenya.
The judge said EADB had proved that it obtained a summary judgment against Dari Ltd, Mr Tuju and four others in April last year and an appeal filed by Tuju’s company subsequently dismissed.
Mr Tuju then moved to have Justice Okwany’s judgement set aside after he filed a new application. It is this application Ms Well’s on behalf of the bank has opposed.
On Friday the judge allowed Mr Tuju to file his replying affidavit by Monday. The matter will be mentioned on Tuesday.
