News

Tuju suffers setback as court accepts UK verdict in debt case

Summary

  • In her ruling, Justice Wilfrida Okwany said the bank had satisfied the conditions for the judgment to be enforced in Kenya.
  • The judge said EADB had proved that it obtained a summary judgment against Dari Ltd, Mr Tuju and four others in April last year and an appeal filed by Tuju’s company subsequently dismissed.
  • Court documents showed that Dari Limited entered into an agreement with the bank on April 10, 2015, under which it agreed to give Dari a $9.3 million (Sh943.9million) loan

A Nairobi judge Tuesday accepted a judgment issued by a UK court against Jubilee Party Secretary-General Raphael Tuju over Sh1.5 billion owed to East African Development Bank

In her ruling, Justice Wilfrida Okwany said the bank had satisfied the conditions for the judgment to be enforced in Kenya.

The judge said EADB had proved that it obtained a summary judgment against Dari Ltd, Mr Tuju and four others in April last year and an appeal filed by Tuju’s company subsequently dismissed.

Court documents showed that Dari Limited entered into an agreement with the bank on April 10, 2015, under which it agreed to give Dari a $9.3 million (Sh943.9million) loan

The loans for the construction of Sh100 million two-storey bungalows sitting on a 20-acre forested land dubbed Entim Sidai and purchase of a 94-year-old bungalow built by a Scottish missionary, Dr Albert Patterson, which currently operates as a high-end restaurant.

But the development of the 12 luxury homes worth Sh1.2 billion fell behind schedule, and Tuju’s company defaulted on repayments, setting the stage for asset seizures.

The deputy judge of the UK High Court, Daniel Toledano, QC, ruled that Dari Ltd did not have an arguable defence.

In his defence, Mr Tuju accused EADB of disbursing Sh932.7 million instead of the agreed Sh943.9 million, and that the bank had reneged on a plan to offer Sh294 million to build the luxury homes for sale.

“EADB is fully aware that in the absence of the development of the housing units for sale as envisaged in the project proposal, Dari would not be able to service the loan facility,” he had said.

He also accused the EADB of stopping KCB Group from taking over the loan and derailing equity investments in the deal by Dubai investors.

But in his judgment, Justice Toledano said the bank was under no obligation to lend the additional Sh294 million.

“It is true that a further facility was proposed and discussed, but it never reached the stage of being agreed and implemented,” the judge ruled.

“No facility agreement was concluded and no other contractual obligation to lend this amount was agreed according to the material before the court.”