A law firm has been ordered to pay Sh102 million for failure to honour a professional undertaking in the sale of high-end Adlife Plaza in Kilimani, Nairobi.
High Court judge Maureen Odero directed Igeria and Ngugi Advocates to fulfil its part of the bargain by paying the lump sum agreed in 2018 to the law firm of Kemboy Advocates.
The judge said the undertaking was clear that it was to be honoured upon completion of the sale of the Adlife Plaza Ltd (APL) and shares at Adlife Management Company Ltd (AMCL) to third parties in a deal financed by KCB Bank.
KCB financed the sale to a tune of 100 per cent shareholding in APL and 80 per cent shareholding in AMCL on behalf of Dr Samuel Thenya, the founder of Nairobi Women’s Hospital.
“The sale is now complete. No other conditions were attached for fulfillment of the professional undertaking. The defendants (Igeria and Ngugi) cannot now seek to plead the cause of a third party in an attempt to evade fulfilling their obligation,” said justice Odero.
She further stated that Igeria and Ngugi law firm was obligated to execute the terms of the undertaking they made on May 7, 2018.
The court heard that Igeria and Ngugi Advocates were retained by KCB to finance the transaction which had offered through a Share Purchase Agreement (SPA) to sell shares in APL for a consideration of Sh1.07 billion.
However, the parties later agreed that the amount would be increased to Sh1.38 billion to be paid in two lump sums, with Sh442 million at the execution of the agreement and the balance of Sh940 million on completion of the transaction.
And to facilitate the release of the title documents and transfer forms, the law firm, acting for KCB, made a professional undertaking to pay the outstanding balance on the completion date.
The firm of Kemboy of Advocates said that acting on the undertaking, it forwarded all the transfer documents to Igeria and Ngugi and the purchasers then took full control of APL and AMCL management and all the companies’ assets.
The shares were also transferred to the purchasers and the property was charged to KCB for Sh940 million.
According to Kemboy, Sh102 million was yet to be paid and despite constant reminders to fulfill their part, Igeria and Ngugi have refused or neglected to release the funds.
KCB lawyers said that prior to the completion of registration, the firm of Kaplan & Stratton Advocates, acting for the purchasers, had indicated in their letters of June 20 and July 16, 2018 that they had detected a breach and consequently stopped Igeria and Ngugi from honouring the legal undertaking.