The law firm of Kilonzo and Company Advocates has filed a bill of Sh69.7 million against the estate of Daniel Moi for defending the former President in a long-running dispute brought against him by media mogul S.K Macharia.
The bill has been filed at the High Court for taxation, by the law firm- which was initially owned by the late senator Mutula Kilonzo and is currently registered under his son and Makueni governor Mutula Kilonzo Junior and daughter Kethi Kilonzo.
The law firm defended Moi in the case filed by Mr Macharia in 2003 as the tycoon accused several lenders, Mr Moi and the former head of public service and secretary to the Cabinet, Joseph arap Letting, for alleged violation of his rights and unjust enrichment through economic duress.
Documents filed in court show an advocate from the law firm appeared in court 21 times between December 3, 2004 and November 28, 2022.
For instructions to defend Moi in the suit, the law firm has billed Moi’s estate Sh30 million. Moi’s estate has been sued through personal representative senior counsel Zehrabanu Janmohammed.
Value of claim
“Taking into consideration the value of the claim, the respondent’s interest in the suit and the time expended in defending the matter,” the bill of costs states.
In the case, Mr Macharia, through his company Madhupaper International allegedly borrowed a loan of Sh50 million from the three institutions in 1981 to start a plant for the manufacture of tissue paper from recycled waste paper.
As security for the loan, Madhupaper gave the lending institutions a charge over all its assets. And after defaulting on the repayments, the lenders including Kenya Commercial Bank (KCB) and Kenya National Capital Corporation, placed Madhupaper under receivership in 1989 to recover the loan, which stood at Sh54 million.
Then High Court judge Richard Kuloba ruled in favour of Mr Macharia in January 2003 stating that the lenders abused the influence of the then President Moi and Mr Letting, in applying unconscionable pressure and economic duress on the tycoon and his company to overpay a loan by over Sh56 million.
The decision was, however, overturned by a bench of three judges of the Court of Appeal in 2008 and the judges stated that there was no evidence of any compulsion or duress on Mr Macharia and his firm to pay the money.
According to Justices Philip Tunoi, Erastus Githinji and Onyango Otieno (all retired), the High Court was wrong in finding that KCB and the other lenders had roped Mr Letting into the affair “for the purpose of creating terror” on Macharia and Madhupaper.
The judges added that on the contrary, it was Mr Macharia who had courted the intervention of Moi and Mr Letting.
The court further ruled that Mr Macharia and Madhupaper voluntarily committed themselves to pay by entering into a valid deed.
Mr Macharia later unsuccessfully tried moving to the Supreme Court, seeking compensation of Sh2.4 billion but the case was dismissed in 2013 by a bench led by former Chief Justice Willy Mutunga.
Madhupaper later filed another case before the High Court seeking orders to compel the Attorney General to rescind a recommendation made in 2005 and take action against Standard Chartered Bank.
The media mogul said Madhupaper International and Royal Credit ltd held accounts at Standard and Chartered and the lender had agreed to collect monies on its behalf paid to him by third parties.
Further, he said on August 4, 1989, Madhupaper allegedly entered an agreement to sell some of its properties.
In November 2000, Macharia complained to the banking fraud investigation about the failure of the bank to credit his account with Sh55 million.
He asked the police to investigate the matter but after some investigations, the Attorney General wrote back saying that the investigations had yielded nothing to support criminal charges.
In reply, the bank has asked the court to dismiss the case arguing that it is an abuse of the court process. It further says that the company was at the material time in liquidation and no leave was sought from the official receiver to initiate the proceedings.
The bank further defends the action of the AG saying he acted in good faith.
