Plot thickens for Raphael Tuju as two top lawyers demand Sh134 million
Former Cabinet Secretary Raphael Tuju.
Former Cabinet Secretary Raphael Tuju faces fresh troubles, with two top lawyers seeking a combined Sh134 million from him as costs incurred in a commercial dispute.
Former Attorney-General Githu Muigai, through his law firm Mohammed Muigai LLP, and Dr Fred Ojiambo of Kaplan & Straton Advocates are seeking Sh75.8 million and Sh58.7 million respectively.
At the same time, the East African Development Bank (EADB) has sued the Bank of Africa Kenya Ltd for allowing Mr Tuju to withdraw Sh37.7 million from an escrow account opened to manage a property loan advanced to his company Dari Ltd in 2015.
In the legal fees matter with Prof Githu and Dr Ojiambo, the law firms are demanding Sh75,822,884 and Sh58,772,255 respectively from Mr Tuju.
The bills of costs—scheduled for assessment on May 15, 2023, by the court deputy registrar—emerged from a suit filed by Dari Ltd and Mr Tuju in 2021 against EADB, Vivienne Yeda Apopo, David Ochieng Odongo and Jotham Mutoka. Prof Muigai represented EADB, while Dr Ojiambo represented the other three defendants.
Lost case
Dari and Mr Tuju had sued the bank and its officials, claiming he was advanced a $9.3 million loan without full disclosures, but he lost the case with costs.
In the ruling rendered on October 21, 2022, by Justice Abigail Mshila, the court also ordered that the costs of litigation be borne by the plaintiffs (Dari and Tuju).
The claim by the lawyers is separate from another one by EADB, which is pursuing Mr Tuju over an outstanding debt of Sh2.2 billion. The lender has since received the court’s nod to recover the sum.
The bank has also sued the Bank of Africa for alleged unauthorised withdrawal of Sh37.7 million by Mr Tuju from an escrow account opened by Dari Restaurant and EADB following the disbursement of the $9.3 million loan in April 2015.
The money in the escrow account was supposed to go towards loan repayments.
Court papers indicate that a sum of Sh37,707,275 was withdrawn and transferred from the escrow account between January 2015 and August 2016.
In the court papers, EADB says it entered into an escrow account agreement dated December 30, 2015, with Dari Coffee Garden & Restaurant Ltd (in receivership), S.A.M Company Ltd, Mr Tuju and the Bank of Africa.
The account was opened at the Bank of Africa Galleria branch in the name of the borrower (Dari).
Court papers indicate that after Dari defaulted on its obligations to pay the loan, EADB appointed receivers over the borrower’s assets on December 24, 2019.
“Upon appointment of the receivers, EADB discovered that the Bank of Africa had acted in breach of the agreement by allowing withdrawals and transfers from the escrow account without EADB’s knowledge or consent,” court papers indicate.
Contract breach
Alleging breach of contract, EADB claims the Bank of Africa acted in contravention of the agreement, failed to act in a commercially reasonable manner and breached duties imposed by law pursuant to a bank-customer relationship.
“All the money in the escrow account was held as a trust balance in favour of EADB. As a result of the Bank of Africa’s breach of contract, EADB has suffered damages being the amount of Sh37,707,275 unlawfully withdrawn or transferred from the escrow account,” says EADB.
Through its Principal Investment Officer, Justa Kiragu, EADB says the Bank of Africa owes it the said sum. It wants the court to order the Bank of Africa to pay the money plus interest. Mr Kiragu claims the money was withdrawn and transferred in 38 transactions of different amounts—the lowest being a sum of Sh200,000 and the highest Sh3.2 million.
“I am also aware that Bank of Africa officers have already admitted the breach in correspondence between the parties. The Bank of Africa, therefore, owes EADB the sum of money,” says Mr Kiragu.
