A multi-million shilling dispute between retired Faulu Microfinance Bank managing director, John Mwara and his former employer over payment of terminal benefits is headed for legal arbitration.
Mr Mwara retired from the bank in August after Old Mutual Group acquired a majority stake in Faulu. His place was taken over Charles Njuguna, who had previously served as the finance director at Old Mutual.
Faulu had agreed to pay Mr Mwara all the amounts due in accordance with terms and conditions of his contract of employment in a settlement agreement the two made in August.
But the two parties disagreed on what should be paid as full and final settlement, despite having agreed on part of the payment.
Mr Mwara wanted Faulu to first pay him what they had agreed and settle the contested amount after the dispute is determined, which the bank declined to honour.
The two agreed to refer the matter to an arbitrator, but Mr Mwara is demanding the amount that is not in dispute to be paid immediately, saying he intends to use it for investment.
“Our client shall not make any payment to your client on account of the agreed amount until the appointed arbitrator has made a determination, which shall be final and binding in accordance with the clause 4..6.3 of settlement agreement,” a letter written on November 10 by Faulu’s advocates, Daly and Figgis, stated.
“It is unjust, unlawful and immoral for your client to attempt to arm-twist and coerce our client to accept the said amount in full settlement of the matter. The mutually agreed sum is legally and contractually due and payable to our client, ” Mr Njoroge Regeru, representing the former MD, wrote to Daly and Figgis advocates in his rejoinder.
He is now threatening to make claims of special damages he says he has suffered on account of Faulu’s failure to release to him the money that is not in dispute.
The two are yet to agree on who is to be appointed as arbitrator on the matter.
“Our clients now need to try and agree on who is to be appointed as the single arbitrator, being a practicing lawyer of the last 15 years standing,” says Daly and Figgis advocates in their letter to Mr Regeru.
Mr Mwara has given Faulu a list of 14 lawyers he is proposing for appointment as the arbitrator.
“If we do not hear from you within the said period or if we do not agree on the person to be appointed as the sole arbitrator, we will apply to the chairman of the Kenya Branch of the Chartered Institute of Arbitrators to appoint the arbitrator.”