The High Court has dismissed a lawsuit filed by a former employee of the Kenya Commercial Bank (KCB), seeking compensation for her arrest and prosecution over an alleged cheque fraud.
The court ruled that police investigators had reasonable grounds to take action and that the claimant, Eunice Chebukwa, failed to prove malice in the case.
In its judgment, the court found that she did not meet the strict legal requirements to succeed in her malicious prosecution claim against KCB and the attorney-general.
While her earlier criminal conviction was overturned on appeal, the court noted that the evidence supported a lawful investigation process.
Ms Chebukwa had sued the bank and the State, seeking an unspecified amount of damages over her 2002 arrest in Bungoma by the Anti-Banking Fraud Unit, subsequent detention at multiple police stations, and prosecution in Nairobi.
She had faced charges including stealing, handling stolen property, forgery, uttering false documents, obtaining by false pretences, and handling stolen goods.
She was initially convicted on two counts and fined Sh200,000 for each count, with an alternative two-year imprisonment term.
However, the conviction was overturned in 2009. Ms Chebukwa argued that her arrest was irregular, the prosecution selective, and that the ordeal caused reputational and health damage.
The case arose from two cheques worth Sh1.5 million and Sh1.6 million that were cleared at KCB’s Mumias branch. At the time, Ms Chebukwa was responsible for current accounts and had an approval limit of Sh250,000.
Investigators found that she authorised the payments without contacting the drawers or seeking a countersignature, despite the amounts exceeding her limit.
Ms Chebukwa contended that the bank’s Chief Executive Officer had acknowledged that her arrest without the bank’s concurrence was irregular, as the lender’s Security Manager was mandated to conduct internal investigations before involving the police.
However, KCB’s internal inquiry concluded that her actions amounted to negligence and recommended disciplinary action. A bank witness testified that the loss was reported to the police by officials of the account holder, Butere County Council, prompting the criminal investigation and subsequent charges.
The witness maintained that the bank acted without malice, though Ms Chebukwa’s actions facilitated fraud and constituted negligence. The witness said her duties were to authorize and deputize customer accounts within her limit, which at the time was Sh250,000.
In analyzing the civil claim, the court reiterated that a claimant must prove four elements to succeed in a malicious prosecution case: that the defendant initiated the legal action, that it was pursued without reasonable or probable cause, that it was motivated by malice, and that it ended in the claimant’s favour.
While Ms Chebukwa met the last requirement due to her successful appeal, the court ruled that she failed to establish the other elements.
Regarding who initiated the process, the court found that KCB had preferred an internal resolution and did not file the complaint.
“It would be difficult to conclude that the first defendant set in motion the events leading to the plaintiff’s arrest and prosecution,” the court stated, noting that the report originated from the account holder.
The court further held that, given Ms Chebukwa’s role in approving cheques far exceeding her limit, investigators had reasonable grounds to justify the charges at the time. Thus, it ruled that there was probable cause for her arrest.
Ms Chebukwa argued that the State failed to call key witnesses and that the appellate court had criticised the prosecution.
However, the court rejected the notion that an acquittal automatically implied liability, stating that “shoddy investigations or an erroneous finding” alone do not prove malice.
It emphasised that the law requires evidence of spite, ill will, or improper motive.
With the burden of proof resting on Ms Chebukwa, the court concluded that her evidence fell short of the required standard.
