NBK was acquired by KCB Group, which pumped billions of shillings to recapitalise the medium-sized lender.
The Court of Appeal sealed the bank’s fate in April by ordering it to pay former Taveta MP Basil Criticos the billions.
NBK tried to escalate the dispute to the Supreme Court but the application was rejected by a bench of three judges early this month.
The lender argued that the Sh2.28 billion award is astronomical, which might affect its current and future lending and other banking obligations.
Justices Hannah Okwengu, Ali-Aroni and John Mativo said the amount to be paid is huge but does not necessarily qualify the matter as one of great public importance.
“The dispute between the parties was a commercial loan between a lender, borrower and guarantor. The applicant has not shown how a private commercial agreement between the parties and failure to repay a loan is a matter of general public importance,” the judges said.
The court had found that the auction of the 15,994.5 acres in Taita Taveta in September 2007 was undervalued. The land had buildings, sisal, quarry, and road network but it was sold for Sh55 million.
The land was sold to the Settlement Fund Trustees (SFT) to recover a loan of Sh20 million advanced to Agro Development Company Ltd, a company in which Mr Criticos was a director and a shareholder. The former Taveta MP acted as a guarantor and the bank sold the land after he defaulted on repayment.
The bank told the court that the judgment directly and substantially affects all players within the banking and financial sector be they depositors, borrowers, lenders and the public, who rely on the terms of the charges or personal guarantees as security for loans.
“From the excerpts cited above and the court’s reasoning, we are convinced that there is no conflicting jurisprudence and uncertainty in law that has arisen regarding whether a guarantee for a specific sum is discharged by payment only of the specific sum, notwithstanding the express provisions therein for the payment of interest, costs and other charges,” the judges said.
The court had earlier said it was morally wrong that the bank raised the interest rate from 19 percent per annum to 35 percent per month, amounting to 420 percent per annum.
The bank was faulted by the court for keeping casuals on contract terms for more than three years and paying them less than their permanent colleagues.
The former employees whose jobs were terminated in December last year sued KCB, accusing the lender of discrimination for paying them less compared to those hired permanently, yet they perform the same jobs.
Justice Monicah Mbaru said where an employer engages in unfair labour practices such as discrimination, they should be redressed by damages.
“General damages are due to the claimants for loss and damage suffered for being placed under terms and conditions of employment less favourable contrary to negotiated terms and conditions to unionisable employees of the respondent (KCB),” the judge said.
The decision is likely to have far-reaching ramifications as the court stated that there is no justification for subjecting employees to performing the same roles on different terms and conditions.
“The restrictive wages as against the privilege accorded to permanent employees based on the CBA terms and conditions means an unfair treatment and denial of normal privileges on account of the nature or employment relationship of the fixed term contract.
In another court case pitting banks, Equity Bank Kenya and NCBA Bank Kenya are embroiled in a court battle over a building in Nairobi that the two lenders claimed to have financed at a cost of Sh160 million each.
