The Supreme Court has agreed to hear an appeal by former Cabinet Secretary Raphael Tuju in a Sh4.5 billion loan dispute with East African Development Bank (EADB).
A five-judge bench, chaired by Deputy Chief Justice Philomena Mwilu, agreed to hear the appeal after reviewing its October 11, 2024 decision in which the judges recused themselves from hearing the case, stalling the matter.
The judges noted that a complaint filed by Mr Tuju at the Judicial Service Commission (JSC), which triggered the recusal to allow the matter to run its course, has since been withdrawn.
‘That the complaints have subsequently and unequivocally been withdrawn, and in exercise of the Court’s inherent powers, we find no justification to perpetuate the recusal beyond this point,’ the judges said.
The court, however, maintained that the change in the circumstances that led to the recusal of the judges does not alter the validity of the ruling.
‘It was the correct and proper decision to make in the circumstances at the time. As a matter of fact, and to buttress this fact, the applicants have not invited us to hold that the ruling was erroneously made,’ said the court.
The apex court said everyone has a Constitutional right to lodge a complaint with the JSC over the conduct of a judge or judicial officer.
‘There is a corresponding responsibility on a litigant not to casually make allegations sufficiently grave to occasion the recusal of five of the seven Justices of the Supreme Court,’ the judges said.
The former CS has been entangled in a protracted dispute with EADB over the 2015 loan. His companies, Dari Ltd and SAM Company Ltd, had a deal with EADB for a $9.3 million (Sh1.2billion) loan for business expansion.
The loans were aimed at financing the construction of Sh100 million two-storey, flat-roofed bungalows sitting on a 20-acre forested land dubbed Entim Sidai and the purchase of a 94-year-old bungalow built by a Scottish missionary, Dr Albert Patterson, which currently operates as a high-end restaurant.
The loan was secured through several forms of collateral, including an indemnity and guarantee agreement dated April 10, 2015.
Among the properties charged as security were Entim Sidai, Tamarind Karen and Dari Business Park. Dari Business Park was sold for Sh450 million in October last year.
When Dari Ltd defaulted, the bank demanded immediate repayment and subsequently filed a suit in the United Kingdom against the company, Mr Tuju, his children, and SAM Company Ltd.
On June 19, 2019, Judge Daniel Toledano of the High Court of Justice (Business and Property Courts of England and Wales) entered summary judgment against Dari Ltd and the guarantors-jointly and severally-for $15,162,320.95.
To enforce the decision, EADB moved to the Kenyan High Court, which recognised the UK judgment on January 7, 2020, under the Foreign Judgments (Reciprocal Enforcement) Act.
Dari Ltd’s application to set aside the UK judgment was dismissed, and the matter escalated to the Supreme Court, but the judges recused themselves.
The court halted the planned sale of other properties-Entim Sidai Wellness Sanctuary-after Mr Tuju challenged the valuation conducted by Knight Frank Valuers, who were appointed by EADB.
Mr Tuju accused the bank of failing to disburse the full loan amount, causing cash flow challenges for the borrower.
The bank defended itself, saying the balance was never disbursed because Dari Ltd breached the agreement by failing to pay $11,462,757 as at November 10, 2017.