Absa Kenya ordered to pay transport firm Sh1.5 billion for data breach

Absa Bank on Muindi Mbingu Street in Nairobi. The lender has been ordered to pay a transport firm Sh1.5 billion for data breach.

Photo credit: Dennis Onsongo | Nairobi

A High Court has ordered Absa bank to pay a transport firm Sh1.5 billion as compensation for allegedly leaking its confidential information to third parties and financial sabotage.

The order was issued after the bank failed to defend the case filed by New Mega Africa Ltd in which it was claiming billions for suffering losses due to the financial institution’s action.

“The defendant herein having been duly served and having failed to file defence within the stipulated period of time, and upon application of the plaintiff’s advocate, I enter interlocutory judgment as prayed,” the judgment signed by Deputy Registrar reads.

The interlocutory judgment was delivered after the firm requested a determination accusing the bank of failing to defend the case despite being served.

“The plaintiff requests for judgment against the defendant, who having entered appearance, has failed to file its defence despite being served with the summons. The request is for interlocutory judgment for Sh1.5 billion together with interest at court rates until payment in full,” the firm said through its advocate Kirui Kamwibua.

The transport firm has already written and served the bank with a letter explaining its intention to proceed with the execution of the interlocutory judgment.

Section 94 of the Civil Procedure Act requires that a decree can only be executed upon a party obtaining leave of the court in the event costs have not been ascertained.

“However, we have proceeded to file bill of costs before proceeding with execution. Therefore, the purpose of this letter is to inform you of the judgment, which has already been entered against you,” Mr Kamwibua said in the letter to the bank.

The transport firm had filed the case before the Commercial and Admiralty division of the High Court in Mombasa accusing the bank of financial sabotage and disclosing its financial statements with strangers without consent.

The company transports clinker from Kenya to Tororo, Uganda for the manufacture and processing of cement and other related products within the East African region.

Through its director David Abai, the firm alleged that the bank refused to approve its loan request on time crippling its business.

He also alleged that numerous letters he had written to the bank requesting for restructuring of the loan were met with long delays affecting the firm’s operations.

Mr Abai also lamented that the leaking of the firm’s financial statement scared lenders, who refused to lend the firm money on an account that it had gone broke and lacked the financial capability to service loans.

He also alleged that due to the leakage, the firm’s creditors and other suppliers descended upon it thereby seriously interrupting the business operations to an extent of almost grounding it.

“Insurers cancelled insurance policy, I suffered stalled operations, low business and harassment by auctioneers and financial turmoil,” he said in court documents filed last month.

The claimant further lamented that the bank failed to maintain the secrecy of the client’s account by printing its financial statements without authority or consent and sharing the same with strangers without its express consent.

He lamented that the bank’s failure to act on his requisition for over six months amounts to financial sabotage.

“The defendant financially sabotaged the claimant by failing to respond to emails and letters requesting for the facility structure and demanding for kickbacks and other incentives prior to approving or disbursing any loans,” he alleged.

Mr Abai also accused the bank of delaying or failing to take action after it was notified of the leakage of financial information.

The transporter asked for compensation of Sh192 million, Sh1.2 billion, and Sh92 million as loss of income, goodwill, and fixed assets.

He supported his claim by stating that his business, which had picked, nose-dived last year due to financial sabotage and the leaking of its financial statement that scared other creditors.

The bank only entered a memorandum of appearance through the firm of Iseme, Kamau & Maema advocates but was yet to respond to the suit by the time the interlocutory judgment was delivered.