Appellate court quashed a fee of Sh60 million demanded by a law firm.
Former CMC chairman Peter Muthoka and a close associate, Peter Kivai, are off the hook after the appellate court quashed a fee of more than Sh60 million demanded by a law firm.
The firm of Ochieng, Onyango, Kibet and Ohaga Advocates represented the two in several cases more than five years ago.
In one of the cases, the two had sued CMC Holdings for ordering investigations without the approval and sanction of the board of directors. The two also faulted a report published after investigations, arguing that it was "false in material particulars, reckless, baseless", and asked that it to be declared invalid.
The case was later settled through consent on February 8, 2013 before Justice Daniel Musinga.
A dispute, however, arose later as the advocates filed a bill of costs demanding Sh128,649,110 from the two businessmen. After hearing parties, the registrar taxed the amount at Sh29.2 million, minus the Sh10 million already paid against Mr Muthoka and Sh29.2 million against Mr Kivai.
To arrive at the figure, the taxing master used the Sh1,563,000,000, the amount involved in the case.
Through lawyer Ahmednasir Abdullahi, the two faulted the magistrate's decision, saying she misdirected herself by using grounds that were unclear and untenable in law.
High Court justice Grace Nzioka dismissed the case in May 2017 for lack of merit. The judge also upheld the fees as assessed by the taxing master. The parties then moved to the Court of Appeal.
Mr Ahbdullahi maintained that the case had been settled but the magistrate and the High Court judge used the pleadings to determine the value of the case.
In judgment, Justices Asike Makhandia, Patrick Kiage and Otieno Odek agreed with Mr Abdullah.
“We think with respect that had the learned judge appreciated as she ought to have that there was a deed of settlement, she should have come to the inescapable conclusion that the taxing master committed an error of principle in not making the same starting point of her assessment,” they said.
The judges directed the case be taken back to another taxing master for assessment of bill of costs to be paid to the law firm.
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