• Thursday, 01 December 2022
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CBK governor wins in court battle with firm

CBK governor wins in court battle with firm

The High Court granted Central Bank of Kenya (CBK) governor Patrick Njoroge's request to halt proceedings in a case filed against him and Imperial Bank Ltd, which is currently in receivership, by an aviation company based at Wilson Airport in Nairobi.

According to Justice Alfred Mabeya, the suit is similar to another one filed by the firm, ALS Limited, against the same parties, including the failed lender and the Kenya Deposit Insurance Corporation.

"It is clear that the plaintiff has done nothing more than add two parties, make additional allegations, and seek substantive relief in the current suit." All of this was possible in the previous suit through amendment. During the trial of both suits, similar issues will be raised for resolution. "In the circumstances, the application (by Mr Njoroge) satisfies the requirements of subjudice," Justice Mabeya stated.

The judge agreed with Dr. Njoroge's argument that the remedies sought by the company in the two lawsuits concerned the same subject matter.

The judicial system
"The continuation of this suit is an abuse of judicial process because two similar suits would have been running concurrently," said Dr Njoroge in a supporting affidavit sworn by Kennedy Kaunda Abuga.

In the suit, the company questions the legality of the Kenya Deposit Insurance Corporation's placement of Imperial Bank under receivership.

The company also challenges the receivership's continuation on the grounds that the period exceeds the statutory provisions, and it claims that several statutory provisions were violated during the receivership.

It is requesting orders such as providing a detailed account of the failed bank as well as documentation supporting or justifying the receivership decision.

Furthermore, it seeks injunctive orders prohibiting any dealings with the bank's funds, as well as orders to deposit the monies claimed by the company in court or a joint account, as well as a declaration that the receivership was illegal and that the receivership lapsed on April 13, 2018.

According to Justice Mabeya, the court considered the nature of the claim in both cases. In the other suit, the company claimed to have three accounts with the bank.

Transferred funds
According to the court, the bank transferred funds to fixed-interest accounts on the company's instructions. However, the bank was placed in receivership shortly afterwards.

The bank failed to make payments when the company became entitled to them.

It seeks payment of the authorized amounts for the USD and Euro accounts in that suit.

On October 13, 2015, the lender was placed under receivership after CBK and a forensic audit presented to the High Court in an ongoing civil case stated that the fraud was committed by senior bank officials.

The company, represented by Mohamed Aslam Khan, had objected to Mr Njoroge's application, claiming that the parties in the suit were not similar and that the prayers sought were distinct.

It claimed that the bank and the regulator were attempting to avoid prosecution for their illegal actions.

The company argued that Mr Njoroge's application did not meet the requirements for subjudice because there were claims relating to the bank's receivership that were not present in the other suit.

The doctrine of subjudice forbids a court from proceeding with the trial of any case in which the issue is directly and substantially before another court.

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