A Nairobi judge has allowed former Stanbic Bank employees to pursue Sh1.1 billion in terminal dues arising from the lender’s 2007 merger with CFC Bank.
A Nairobi judge has allowed former Stanbic Bank employees to pursue Sh1.1 billion in terminal dues arising from the lender’s 2007 merger with CFC Bank.
Lady Justice Roselyn Nambuye dismissed a preliminary objection to the suit raised by Stanbic saying it would deny the pensioners enjoyment of the fruits of their litigation.
Stanbic through Obura and Mbeche Advocates had argued that the Court of Appeal had stayed the dispute in the High Court.
The bank also argued that the pensioners’ case had already been determined by a court.
The pensioners through lawyer Matthew Oseko asked the court to enter a liquidated judgement against Stanbic for Sh532 million plus interest at a commercial rate of 20 per cent from the date the suit was filed in 2004.
The two banks merged on June 22, 2007 into CFC Stanbic, becoming Kenya’s fourth largest bank.
On Thursday last week, Lady Justice Nambuye — who has since been elevated to the Supreme Court — said the bank’s objection did not satisfy the ingredients of preliminary objection.
The judge said Stanbic should have established what objections they intended to raise against the proceedings and have them heard and disposed of at the same time “instead of being handled piecemeal.”
Mr Oseko said the objection “has only operated to delay the application for summary judgement against the bank and increased costs which the bank should be ordered to pay.” In her ruling, the judge awarded the pensioners the costs of the suit.
Owned by South Africa’s Standard Bank and whose assets stood at Sh43.3 billion in December 2007, Stanbic bought a 60 per cent stake in CFC Bank Group in a controversial takeover that was challenged by the employees over their terminal dues.
The pensioners obtained an injunction restraining Stanbic from proceeding with the proposed merger before they had been paid Sh1.1 billion in accrued pension.
The merger was however allowed to proceed after Stanbic deposited Sh532 million to secure the claim of 15 pensioners.
Led by Jimmy Kavilu, the former bank workers moved to court in 2004 seeking over Sh1.1 billion termination dues.
They argued that following the merger Stanbic would dispose of its undertakings and liabilities and it would be owned by CFC Stanbic Limited, which would not be subject to orders made by the court.
The pensioners have named five trustees of their pension and life insurance scheme, Philip Odera, Maurice Toroitich, Wilson Odadi, Christine Sabwa and Wendy Mukuru as defendants.
Stanbic later moved to the Court of Appeal saying the order to deposit the lumpsum at the Kenya Commercial Bank was costing it Sh1.3 million quarterly for the guarantee.
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