The High Court has ordered Bank of Africa Kenya (BOA Kenya) to pay more than Sh247 million to two investors, ending a 23-year dispute over fixed deposits placed with its predecessor, Credit Agricole Indosuez Limited, in the 1990s.
In two separate judgments, the court ruled that Credit Agricole Indosuez had received the funds, acknowledged them in writing, and created enforceable fixed deposits that were never repaid.
The court held Bank of Africa liable as the successor institution after it acquired Agricole’s assets and liabilities in 2004.
The rulings resolve three related lawsuits filed in 2002. One case was brought by investor Nilam Doshi, while two consolidated suits were filed by Sanjita Shah.
Only BOA actively defended the claims; the other defendants — former bank officials and a company — did not participate in the proceedings.
Doshi’s case
In Doshi’s case, the court found that Sh19 million had been placed on a fixed deposit in 1996 following a banker’s cheque of Sh20.3 million, part of which was used to purchase Kenya Airways shares.
The bank issued letters confirming receipt, interest and maturity dates. The court cited one such letter, which stated: “We confirm having received from you the sum of Sh19 million… and on maturity… 15th June 1996… we will pay you Sh19.8 million.”
The court dismissed the bank’s argument that no valid deposit existed. A defence witness admitted that the cheque “could not have been paid to any other party other than that bank.”
Another witness conceded that “the money was cleared to the Bank and landed in the account of the Bank.”
The court also upheld a rollover agreement for Sh21 million in September 1996, which remained unpaid.
Consolidated cases
In Shah’s consolidated cases, the court traced a series of deposits and rollovers between 1995 and 1996. The initial Sh118.5 million deposit was acknowledged by the bank in a letter stating that, upon maturity on November 16, 1995, it would pay Sh124.3 million.
Subsequent letters documented successive rollovers and additional deposits, culminating in a final acknowledged sum of Sh151.8 million, which was due to mature in September 1996 at Sh165.2 million.
A separate transaction involving Sh44 million in March 1996 was also acknowledged and rolled over with two additional cheques, resulting in a maturity value of approximately Sh51.55 million by August 1996.
A defence witness admitted under oath that the Sh44 million had indeed been deposited, and an internal bank email from 2002 corroborated the figures — evidence the judge deemed a candid admission.
Assumed liabilities
On the question of liability, the court relied on a 2004 Gazette notice approving Bank of Africa’s takeover of Agricole.
“A plain reading… would suggest that the first defendant assumed all the liabilities,” the court stated. It noted that the bank could have produced the acquisition agreement to refute the claims, but failed to do so.
“Nothing would have been easier than to produce this document. It is not lost on me that the first defendant opted to litigate this matter in full rather than simply produce the agreement in question, which would have put the matter to rest,” the judge remarked. The omission, he ruled, justified the conclusion that the liabilities had been assumed.
The court also rejected allegations of fraud and illegality, finding no primary evidence to support them.
“Submissions are not evidence,” the judge emphasised, adding that documents “do not speak for themselves” without witness testimony to explain them.
Regarding the statute of limitations, the court ruled that the suits, filed in 2002, fell within the six-year window from the deposits’ maturity dates in 1996.
However, it declined to enforce the original contractual interest rates of up to 36 percent, deeming them “unrealistic”. Instead, it awarded interest at the court rate of 14 percent from the maturity dates until full payment.
In Doshi’s case, the court entered judgment for Sh21 million plus interest and costs, while Shah’s consolidated cases resulted in a total award of Sh216.8 million, comprising Sh165.2 million and Sh51.5 million, along with interest and costs.
The court affirmed that written bank acknowledgements are legally binding and that successor institutions “stand in the shoes” of the banks they acquire under the Banking Act.
