The Court of Appeal has temporarily shielded Ecobank Kenya from paying Sh840 million to the estate of former Cabinet Minister Mbiyu Koinange, pending the determination of its appeal against a High Court order.
In a ruling delivered by a three-bench, the appellate court found that Ecobank’s appeal raised arguable legal questions and that forcing immediate payout risked rendering the appeal futile.
The judges emphasised that releasing the funds could lead to their irreversible dissipation among beneficiaries of the estate, complicating recovery if the bank succeeds in overturning the High Court’s decision.
The dispute stems from 2011 withdrawals made from an estate account at Ecobank holding Sh284 million, which the High Court ruled were illegal. The estate is claiming an extra Sh556.6 million in accrued interest, bringing the total amount to excess of Sh840 million.
The High Court had earlier restricted withdrawals without its approval, but the bank disbursed the funds to lawyers representing beneficiaries in the long-running succession case.
In June 2025, the High Court held that the bank breached its fiduciary duty by failing to verify court orders before releasing the money.
The court ordered the bank to refund the full amount plus interest, a decision Ecobank challenged, arguing it was unfairly penalised for relying on instructions from advocates mandated to operate the account.
Its advocate contended that there were procedural flaws, arguing that the High Court adjudicated negligence and fraud claims summarily within succession proceedings, denying the bank a fair trial.
The advocate also stated that previous rulings by two other High Court judges had directed advocates —not the bank— to account for the funds. The money was part of the Sh1.1 billion proceeds from sale of Koinange’s land known as "Close Burn Estate Runda" in 2010.
It was further claimed that the bank was not aware of the court order dated July 26, 2011 to halt and restrict any dealings with the account.
The bank’s further argument was that complying with the June 2025 order would force the lender to dip into depositors’ funds, risking instability.
Since banks rely on depositor funds to do their business, the court agreed and found that abrupt withdrawals of the amount could destabilise operations of Ecobank.
However, the estate’s administrators insisted Ecobank knowingly violated the court orders. They asked for the money at the centre of the dispute to be deposited in a joint account opened by the advocates for the estate pending determination of the appeal.
“The High Court judge properly directed himself on all issues on record; that any money deposited with the bank was trust money belonging to the estate, as appears in the Account Opening Forms,” said the lawyer representing the Koinanges.
He added that the bank was aware that the money deposited was pursuant to a court order, and no withdrawals could be done without court sanction irrespective of the signatories of the account.
In addition, no part of the estate could be distributed without a court order.
Led by Koinange’s widow, Eddah Wanjiru Mbiyu, the administrators offered to secure the High Court decree by depositing title deeds of estate properties worth billions, but the court doubted their liquidity, noting ongoing succession disputes.
The appellate bench ruled that Ecobank’s appeal deserved a full hearing, citing arguable grounds such as whether the High Court overstepped by awarding alleged unpleaded reliefs and mixing succession with tort claims.
The judges also found that disbursing the contested money to the beneficiaries would make recovery "a herculean task" if the appeal succeeds.
“The applicant (bank) is apprehensive, and rightly so in our view, that if the appeal were to succeed, tracing the said sum amongst the beneficiaries would be a herculean task,” said the court.
“Considering the interests of the parties in this application, we find that the balance tilts towards the grant of the stay, since no serious prejudice is likely to be occasioned to the respondent (Koinange’s estate) during the pendency of the intended appeal,” said the judges.
The stay halts enforcement of the High Court’s order until the appeal is heard. Ecobank is expected to file its substantive appeal within timelines set by the court.
Koinange died on September 3, 1981. He served in President Jomo Kenyatta's cabinet and briefly in President Daniel Moi's administration.
