SBM Bank Holdings seeks to block Fidelity owners’ claim of Sh2.5bn
SBM Bank wants the High Court to suspend a ruling delivered allowing shareholders of FCB to pursue compensation of Sh2.5 billion. FILE PHOTO | WACHIRA MWANGI | NMG
SBM Bank Holdings wants the High Court to suspend a ruling delivered last month allowing shareholders of Fidelity Commercial Bank (FCB) to pursue compensation of Sh2.5 billion over the acquisition of the Kenyan lender in 2017.
The financier returned to the High Court last week seeking suspension of the ruling delivered by Justice Alfred Mabeya on July 28, which gave former shareholders of FCB the nod to fight the matter in court as opposed to arbitration as advanced by SBM Bank.
The judge had ruled that the nature of the allegations made by Mr Sultan Khimji concerning the sale of the lender removes the jurisdiction of arbitration to handle the matter. FCB has sued SBM and the Central Bank of Kenya over the sale.
Through lawyer Esmail Abbas, SBM said it was dissatisfied with the decision and has filed a notice to the Court of Appeal against the entire ruling.
Abbas said it was crucial that the application be heard urgently, and leave be granted to the bank to appeal to the Court of Appeal.
“Unless this honourable court grants leave to appeal and a stay of proceedings pending appeal, the 1st defendant and SBM Africa will suffer irreversible prejudice and irreparable loss and damage, as they will be constrained to submit to the jurisdiction of this honourable court and have the dispute determined through the court process as opposed to arbitration in accordance with the SPA (share purchase agreement),” Mr Abbas said.
The lender says the former shareholders of FCB have sought to be paid damages and they have not said that the Mauritius bank is incapable of satisfying any decision made against it.
The bank says the application for the dispute to be referred to arbitration is arguable as shareholders of Fidelity Bank are bound by an enforceable arbitration clause and the court was in error to conclude that it has jurisdiction to hear the matter.
Justice Mabeya directed SBM to serve former shareholders of FCB with court documents within 14 days. The parties will head back to court on October 13, for highlighting submissions.
“The 1st defendant maintains its stance that the court does not have jurisdiction to determine the present dispute in light of the extant arbitration agreement and all steps taken by it before the courts in Kenya remain subject to this to this proviso at all times,” SBM Bank said.
