The Court of Appeal has blocked a trader, Johmat Distributors, from escalating its long-running commercial dispute with the Central Bank of Kenya (CBK) over ‘stolen’ bonds cash to the Supreme Court, ruling that the case lacks broad public importance.
A three-judge bench dismissed Johmat’s application for certification and leave to appeal to the apex court.
The dispute dates back to April 2004 when the CBK filed a High Court suit to recover Sh205 million in allegedly stolen Treasury bond proceeds. The regulator accused Johmat, Giro Commercial Bank, and several individuals of fraudulently diverting the funds through bank accounts.
The CBK argued that the bond proceeds had disappeared in the early 2000s, sparking one of Kenya’s most protracted financial lawsuits. It sought a declaration of liability, repayment of the funds, and interest.
Over time, the CBK withdrew the case against Giro Commercial Bank and other defendants, leaving Johmat as the sole respondent. Johmat denied wrongdoing and filed a counterclaim for damages and interest after its funds totaling Sh14 million were frozen for years during litigation.
In December 2019, then-High Court Judge George Odunga (now at the Court of Appeal) dismissed the CBK’s claim against Johmat, finding that the case was “based merely on suspicion.”
He also rejected Johmat’s counterclaim, citing insufficient proof of entitlement to interest on the frozen funds, which were released by consent in 2020.
Johmat appealed to the Court of Appeal, contesting only the denial of interest and costs.
In September 2024, the appellate court upheld the decision, stating Johmat’s claim for interest was neither liquidated nor substantiated.
The judges noted that interest is discretionary under the Civil Procedure Act and that Johmat failed to prove the applicable rate. They also agreed with the High Court that neither party had fully succeeded, making cost awards unjust.
Johmat then sought Supreme Court intervention, arguing that the 14-year freezing of its funds raised constitutional and commercial litigation concerns.
It argued that the prolonged freezing of its funds and issues around Mareva injunctions and undertakings raised broader legal questions. However, the Court of Appeal rejected this, applying the apex court’s test for certification. It ruled that Johmat’s grievances were case-specific and did not present unsettled legal questions of public interest.
“The gist of the applicant’s complaint is whether it was entitled to interest on the frozen amount,” the court said, emphasising that “mere apprehension of injustice is not a basis for certification.”
