- In the application listing Dari Limited, S.A.M company limited and Raphael, Mano, Alma and Yma Tuju, it stated that they are "desirous, ready and willing" to repay the amount owed.
- It added that they had "at all times" engaged the bank to settle the debt, saying in 2017-2018, a settlement was negotiated and an agreement drawn executed by the applicants.
Image: FILE
The High Court has issued a status quo order in the dispute between the East African Development Bank (EADB) and former Cabinet Secretary Raphael Tuju.
This is a protective order of custody and restraint to maintain a situation.
In property law, as is the case in the dispute where Tuju's property in Karen is at risk of being taken over by the EADB over unpaid dues, the status quo refers to upholding the status of the property in question.
This is to mean that the same is not to be sold or leased. It must remain in the same condition as it did on the day the order was passed.
Milimani Commercial and Tax Division Judge Alfred Mabeya gave the orders on Wednesday following an application by the Tuju's to have a court-supervised settlement mechanism to resolve the dispute amicably.
In the application listing Dari Limited, S.A.M company limited and Raphael, Mano, Alma and Yma Tuju, it stated that they are "desirous, ready and willing" to repay the amount owed.
It added that they had "at all times" engaged the bank to settle the debt, saying in 2017-2018, a settlement was negotiated and an agreement drawn executed by the applicants.
The bank however is said to have walked away without any explanation.
The applicants expressed their worries that if the court did not issue the orders, EADB would take over Dari Properties which would unfairly cause injustice and irreparable harm upon them.
This is considering that the bank obtained orders from the court to take over the properties, which it holds as security over some Sh2.2 billion owed to it.
In its judgement, the Supreme Court said EADB was capable of compensating Tuju if need be.
However, Tuju moved to the current high court, seeking supervision for a resolution through the Court Annexed Mediation under the Civil Procedure Rules, 2022.
"In the circumstances, Court Annexed Mediation is the best way of ensuring that the dispute between the parties hereto that involves a substantial amount of money is settled in the shortest time possible," the application filed in court reads.
The applicants argued that EADB and the other listed respondent George Weru, would not suffer prejudice as the former holds charges and security of the property as per the April 10, 2015 agreement.
This is when the UK-loan deal was inked between EABD and Dari, from which the dispute arose.
The applicants however said they could suffer prejudice as recovering any losses from the bank would be impossible and would lead to irreparable loss and damage.
They also said they were not sure of the amount they had to pay to settle the debt.
They told the court that a valuation on October 11, 2023, showed that the Tree Lane Property is valued at Sh3,210,000,000, which on the current market is US$21,543,624.
The Ngong Road property is valued at Sh998,000,000 and US$6,695,740 in the current market.
The applicants added that the value of the charged properties is Sh4,208,000,0000 which is US$28,239,364.
In the application, Tuju also sought the status quo orders on all enforcement proceedings emanating from the 2015 agreement.
The bank however opposed the application, saying that it was owed an "undisputed" total of US$16,550,608.83 as of December 20, 2019, and interest was still accruing.
It said the applicants the amount was known as there was a judgement confirmed by the Court of Appeal.
"This is, therefore, no dispute to refer to mediation," the replying affidavit reads.
It added that the application filed by Tuju was in bad faith as the bank was not interested in mediation.
"I am in the respectful view that the applicant's application for mediation seeks to prolong the suffering of the 1st Respondent (EADB) and is in an attempt to stall the debt recovery process yet again, by invoking constitutional and other misplaced legal provisions. It is unmerited and does not advance the rule of law," the affidavit reads.
After deliberating the application and affidavits, Justice Mabeya said he could not delve into the issues raised as it would amount to him dealing with the merits when the same had not yet been ventilated.
He observed that there were issues raised that needed to be interrogated by the court and this would require that the cases remain intact.
"According, I give the following directions, in the meantime the status quo obtaining as of today be maintained until then," the ruling reads.
The applicants are to file and serve submissions within 10 days while the respondents are to do the same within 10 days.
The highlighting is on December 13, 2023.
When the dispute began, the bank moved to a UK court and obtained orders that the Tujus and Dari jointly pay the bank USD15,162,320 (Sh2,256,153,216) under the 2015 agreement.
In Nairobi, EADB got orders paving the way for recognition of the judgment from the UK in Kenya.
Tuju, however, countered and got orders staying the execution with the condition of depositing Sh50 million to an account in the joint names of the parties' advocates as security.
The Court of Appeal, however, dismissed the application.
When the application was moved to the Supreme Court at first, it issued ex-parte stay orders halting the enforcement proceedings by the bank.
After hearing from both EADB and Tuju, the apex court allowed the execution of the aforementioned decision, effectively allowing the bank to enforce the foreign judgment.