CBK governor gets relief in court tussle with firm

 Patrick Njoroge.

Central Bank of Kenya Governor Patrick Njoroge.

Photo credit: File | Nation Media Group

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

Justice Alfred Mabeya said the suit is similar to another one that is pending in court lodged by the firm, ALS Limited, against the same parties, including the collapsed lender and Kenya Deposit Insurance Corporation.

“It is clear that all that the plaintiff has done in the present suit is to add two parties and make additional allegations and seek substantive reliefs. All this could be done in the previous suit through amendment. During the trial of both suits, there would be similar issues that will arise for determination. In the premises, the application (by Mr Njoroge) meets the requirements of subjudice,” said Justice Mabeya.

The judge concurred with Dr Njoroge’s argument that the remedies sought by the company through the two suits involved the same subject matter.

Judicial process

“The continuance of this suit is an abuse of judicial process as two similar suits would have been running concurrently,” said Dr Njoroge in the supporting affidavit sworn by Kennedy Kaunda Abuga.

In the suit, the company is challenging the legality of the placement under receivership of Imperial Bank by the Kenya Deposit Insurance Corporation.

The company also challenges the continuance of the receivership on grounds that the period is more than the statutory provisions and raises claims that several statutory provisions have been contravened in the course of the receivership.

It is seeking orders such as rendering a detailed account of the fallen bank and documentation supporting or justifying the decision to place it under receivership.

In addition, it wants injunctive orders restraining any dealings with the funds held by the bank, to deposit in court or a joint account the monies claimed by the company and declaration that the receivership was illegal, and a declaration that the receivership lapsed on April 13, 2018.

Justice Mabeya said that the court considered the nature of the claim in both matters. In the other suit, the company alleged that it maintained three accounts with the bank.

Transferred monies

The court was told on the company’s instructions, the bank transferred monies to fixed interest-earning accounts. However, shortly, thereafter, the bank was placed under receivership.

When the company became entitled to payment, the bank failed to make the payments.

In that suit, it wants to seek payment of the authorised amounts concerning the USD and Euro accounts.

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

The company, through its representative Mohamed Aslam Khan, had opposed Mr Njoroge’s application stating that the parties in the suit were not similar and the prayers sought were different.

It argued that the bank and the regulator were attempting to avoid subjecting their illegal actions to the law.

Arguing that the application by Mr Njoroge did not meet the ingredients for subjudice, the company said there were claims relating to the bank’s receivership which were absent in the other suit.

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