City Shuttle enters out-of-court talks in Sh100m loan case

Nairobi-based transport firm City Shuttle and Sidian Bank have opened out-of-court talks over a disputed Sh100 million loan.

The two firms last week asked Justice Grace Nzioka for time to negotiate a deal that will see them withdraw the suit filed by City Shuttle opposing the planned auction of four mass transit buses to recover the Sh100 million loan.

The judge has ordered the firms to return to court on July 28 to record the settlement they shall have mutually arrived at.

City Shuttle sued Sidian Bank to stop recovery of the disputed loan.

The firm claims that it has been remitting monthly installments as per the loan agreement.

But Sidian Bank insists that City Shuttle has failed to honour the loan agreement terms on several occasions.

The lender adds that City Shuttle’s claims on illegal interest rates are a diversion trick the court into ruling in the transport firm’s favour.

City Shuttle claims using interest rates prescribed by law, it is supposed to pay Sh2.7 million monthly but that Sidian Bank has demanded Sh3.09 million every month.

Sidian Bank, however, says the raised installments were to cater for interest that had accumulated over delays in repayment by City Shuttle.
“It became glaringly clear to the bank that City Shuttle had no intentions of honouring the repayment plan thereby necessitating the move to enforce its security so as to mitigate the imminent loss. The alleged complaint relating to interest rates is a mere smokescreen calculated to mislead the court in a bid to buy time for City Shuttle and excuse its breach,” Sidian Bank says.