The Insurance Regulatory Authority (IRA) says its operations will be disabled if lawyer Waweru Gatonye is allowed to attach its accounts at the National Bank of Kenya (NBK).
The regulator also says if the lawyer is allowed to take money from its accounts then its appeal will be rendered irrelevant with no guarantee of refund in the event the appeal succeeds.
The insurance regulator risks closure after a Nairobi-based lawyer moved to seize its bank accounts over a Sh315.2 million unpaid legal fees.
The Insurance Regulatory Authority (IRA) says its operations will be disabled if lawyer Waweru Gatonye is allowed to attach its accounts at the National Bank of Kenya (NBK) #ticker:NBK.
Mr Gatonye sought orders to attach the bank accounts two weeks ago after he won an eight-year battle for the legal fees that came after he represented IRA in a court battle against collapsed insurer-- Lakestar Insurance Company.
The High Court awarded him Sh262.9 million and the fee has increased to Sh315.3 million inclusive of interests.
IRA has appealed against the High Court judgment and has petitioned the judges to freeze the seizure of its accounts pending hearing and determination of the suit.
The regulator also says if the lawyer is allowed to take money from its accounts then its appeal will be rendered irrelevant with no guarantee of refund in the event the appeal succeeds.
“If the court grants the orders sought by the creditor in the present application, the entire budget of IRA will be affected and its operations will completely ground to a halt which will occasion a great injustice to the Kenyan public that the applicant serves,” IRA CEO Godffrey Kiptum said in an affidavit.
Mr Gatonye has been at loggerheads with the insurance regulator over legal services offered eight years ago in a dispute involving the collapsed Lakestar Insurance Company.
Mr Gatonye's law firm demanded Sh262.9 million after representing the authority at the High Court in a case filed by the owner of the collapsed insurance company, John Kipkemboi Kilel, in 2013 where he is seeking compensation of Sh12 billion for closure of the insurer.
IRA's argues that the fee is “manifestly” high and punitive, saying it is without basis in law, and is “unjust enrichment of the advocate”.
In the case that is pending determination, Mr Kilel claimed that the winding up of Lakestar Insurance was falsely engineered in 2002.
He accused former IRA chief executive Sammy Makove of coming up with false information to liquidate the insurance firm.
The regulator placed Lakestar under statutory management in 2002 before the managers recommended the firm be wound up a year later.
He sought an award of Sh2 billion for business opportunities lost, Sh3.7 billion for loss of property, capital gains, and cash loss as well as Sh6.2 billion for reputation damage.
He also sought Sh39.6 million for loss of monthly earnings and Sh6.2 million for loss of earnings from the investment.
After filing the case, IRA hired Waweru Gatonye and Company Advocates to defend it in court.
Upon being instructed, the advocates proceeded to prepare and file a Memorandum of Appearance, statement of defence, defendant's (IRA) list of witnesses, and list of documents.
