The Supreme Court has ruled against former Cabinet Secretary Raphael Tuju’s bid to halt the takeover of his Karen property over unpaid debts.
In a judgment delivered on Friday, the Court, led by Deputy Chief Justice Philomena Mwilu and Justices Njoki Ndungu, Mohammed Ibrahim, Smokin Wanjala, and William Ouko, determined that the East African Development Bank (EADB), listed as the respondent, could compensate Tuju if necessary.
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Tuju had sought conservatory orders from the court to stay the execution of an April 20 judgment pending the hearing and determination of his appeal. He claimed that there was a risk of eviction from Dari properties, held as security by EADB over a debt of approximately Sh2.2 billion.
Furthermore, Tuju expressed concerns that if the takeover were to proceed and his appeal succeeded, the bank’s diplomatic immunity might prevent him from recovering the money.
Tuju’s application was filed jointly with Dari Limited, S.A.M. Company Limited, and the Tujus, including family members Mano, Alma, and Yma, who were loan guarantors and co-directors of Dari.
“We are satisfied that the respondent (EADB) remains a reputable international bank that should have no difficulty compensating the applicants if the applicants succeeded in their claim,” the judges noted.
“The applicants’ apprehension as to the diplomatic immunity afforded to the respondent does not suffice.”
The Supreme Court also clarified that it could not rule on the bank’s immunity as that issue was not under appeal before the Court.
Tuju had also sought a stay of proceedings in the High Court concerning the enforcement of the notice appointing receivers and managers dated December 23, 2019. The notice led to the appointment of George Weru and Muniu Thoithi as Receiver Managers of Dari Limited.
The court found that there was no evidence provided to demonstrate the existence of any appeal on the issues brought before the Court of Appeal. Consequently, the proceedings in the High Court were beyond the jurisdiction of the Supreme Court.
The loan agreement between EADB and Dari, which gave rise to the dispute, was signed in the UK on April 10, 2015. When the dispute began, the bank sought orders from a UK court, resulting in the Tujus and Dari being jointly ordered to pay the bank USD 15,162,320 under the 2015 agreement.
In Nairobi, the bank obtained orders for the recognition of the UK judgment in Kenya. However, Tuju secured orders staying the execution, subject to a Sh50 million deposit as security, which the Court of Appeal later dismissed.
Initially, the Supreme Court issued an ex-parte stay order preventing the bank from enforcing proceedings. After considering arguments from both EADB and Tuju, the Court ultimately ruled in favor of allowing the bank to enforce its foreign judgment.