Absa setback in Sh1.5bn data breach row with transporter

Absa Bank Kenya

Absa head office in Westlands, Nairobi. 

Photo credit: File | Nation Media Group

Absa Bank has suffered a setback in a Sh1.5 billion data breach dispute with a transport firm after the High Court in Mombasa allowed the lender’s former employee to testify in the case.

Justice Julius Ng’arng’ar on Wednesday permitted an application to review and set aside a ruling that had previously declined to admit Evans Murumba as a witness in the case between the bank and New Mega Africa Ltd.

“I therefore find that the application for review herein is not an abuse of the process of court and the same can be determined by this court. In consideration of the above, the plaintiff or applicant’s notice of motion dated July 18, 2024, is allowed,” said the judge in a ruling delivered on January 22.

This ruling means that Mr Murumba will appear as a witness in the case.

The judge also reviewed and set aside an earlier decision that had set February 25 as the deadline for resolving the dispute between the bank and the transport firm.

The High Court had previously ruled that the case would be dismissed if it was not resolved by February 25.

The transport firm applied for review in July last year, arguing that the order imposing the February deadline put it at a disadvantage, as the matter could remain unresolved by that date through no fault of its own.

The transport firm’s director, David Omusala, said that although the pleadings had closed, only one witness had partially testified.

“Equally, the court reserves the discretion to reopen pleadings even at the stage of judgment, and the defendant will have ample time to cross-examine the said witness,” said Mr Omusala in an affidavit.

Application for review

The bank opposed the application for review, questioning why the transport firm had chosen not to apply to the judge who had initially dismissed its request, citing the closure of pleadings.

“This amounts to forum shopping, which is an abuse of the court process. The plaintiff has not established sufficient cause to warrant a review of the court’s decision, nor has there been the discovery of new material not previously within its knowledge despite exercising due diligence,” said the bank’s advocate, Michael Massawa.

The bank also argued that the facts of the case at the time of the original application for leave to file the witness statement, which was dismissed, were no different from the facts in the current application.

It also asserted that the transport firm was inviting the court to act as an appellate body over its own decision.

“This court does not have jurisdiction to hear and set aside decisions rendered by another judge of concurrent jurisdiction. Moreover, this court does not have jurisdiction to consider the application for review, having become 'functus officio' [task performed] after delivering its decision on the request for leave to file an additional witness statement,” said Mr Massawa.

Absa further contended that the court had previously dismissed the application on the grounds of delay in filing and observed that the witness was not introducing any new evidence, making him an unnecessary witness in the matter.

Justice Ng’arng’ar, however, ruled that the transport firm’s application for review of earlier High Court orders met the threshold for granting the orders.

Witness inclusion

New Mega Africa Ltd believes that the evidence of the former bank employee is crucial to its data breach case against the lender.

However, Absa Bank has objected to Mr Murumba's participation in the case, stating that his intentions are to advance other interests, arguing that the current dispute is solely between the bank and the transport firm and arises out of a banker-client relationship.

“Therefore, Mr Murumba has no reason to be involved in the case. His addition in this suit would, therefore, only serve to murk the waters, increase litigation, and convolute the litigation with unnecessary parties who have no connection whatsoever with the claim before this court,” said Mr Massawa.

According to the bank, Mr Murumba was not a party to the said relationship and there is no obligation on his part in the case and his inclusion will not add any value to the case.

The bank has said that the former employee purports to make conclusions on the claim filed and to attribute breach of confidentiality against it.

“It is evident from Mr Murumba’s documents that he is seeking to introduce new evidence in favour of the plaintiff through an unconventional procedure. His joinder in the case is a front for the plaintiff and not really a necessary party in the case,” said Mr Massawa.

Mr Murumba stated in his application to join the case that it was fair and just for him to be included in the suit so that he could establish a proper defence and clear his name from the allegations in the dispute.

New Mega Africa Ltd sued the bank claiming Sh1.5 billion for an alleged data breach.

In the suit, the company, which transports clinker from Kenya to Tororo in Uganda for the manufacture and processing of cement and other related products, accused the lender of financial sabotage and disclosing its financial statements to strangers without consent.

The firm alleged that the bank failed to maintain the secrecy of the client’s account by printing the client’s financial statements without authority or consent and sharing the same with strangers without its express consent.

The row stemmed from the bank’s alleged refusal to approve the company’s loan request on time, crippling its business. It is also alleged that numerous letters written to the bank requesting a restructuring of the loan were met with long delays, affecting the firm’s operations.

The company alleges that the leaked financial statements scared off other financiers, who refused to lend to the company on the grounds that it was broke and lacked the financial muscle to service loans.

Absa Bank has, however, distanced itself from the data breach claims, insisting that it did not leak the firm’s financial information or even warn its creditors of the company’s financial woes.

The bank says the allegation is baseless and devoid of merit.

It has argued that the company's accusations of personal information leakage have not shown any wrongdoing on the part of the bank or any of its employees following internal investigations.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.