National Bank CEO fined Sh3.5m for contempt of court

Kenya: The National Bank of Kenya Chief Executive Officer Munir Sheikh Ahmed has been fined Sh3.5 million for contempt of court.

Court of Appeal judges Wanjiru Karanja, John Mwera and Philomena Mwilu found Mr Ahmed in contempt of an order restraining the sale of a Sh700 million property in Westlands, Nairobi pending delivery of a ruling.

Karanja, Mwera and Mwilu said it was Mr Ahmed who will take the liability on behalf of the bank. “Had the bank been a human entity, it should have borne the penalty of contempt of court,” said the judges in their ruling.

The court said the bank is a corporation which acts through its officers and that “its officers ought to take responsibility.”

The judges allowed the application by lawyer Manjit Billings for the applicant Shimmers Plaza

“Courts should not fold their hands in helplessness and watch as their orders are disobeyed with impunity left, right and centre. This would amount to abdication of our sacrosanct duty bestowed on us by the Constitution,” said the judges.

The judges said the dignity and authority of the court must be protected, noting that’s why those who flagrantly disobey them must be punished, “lest they lead us all to a state of anarchy.”

ISSUED ULTIMATUM

The court observed that since the bank is a corporation, the penalty imposed on it cannot be by way of committal to civil jail but through other modes of penalty.

“Having considered all the foregoing, we are minded to impose and we impose a fine of Sh3.5 million in the circumstances,” Karanja said.

They directed the bank to pay the fine in seven days, failure to which an order of sequestration will lie against the bank’s property.

The bank had been restrained from selling the prime property in September 26, 2013 pending delivery of a ruling on November 29, 2013.

The judge ordered that status quo be maintained pending the ruling.

Mr Billing told the judges that the bank went ahead and sold the property to Cape Suppliers Ltd on October 15, 2013 and a transfer registered on October 30, 2013.

He filed the contempt proceedings on December 4, 2013 seeking orders to commit the chief executive of the bank to civil jail for a period of six months.

In their ruling, the judges said Billing’s plea is to “protect the dignity and integrity of the court.”

The bank had opposed the committal plea, saying there was no personal service of the order of status quo of September 26, 2013 on the bank. The bank also said there was ambiguity in the order which made it difficult to comply.

However, the judges said the bank was not able to pinpoint the ambiguity in its order, which according to them was made of a mere four words.

Here is a clarification by the Bank’s management on the ruling

February 26th 2015: National Bank of Kenya has lodged a notice of appeal on a ruling rewarded with respect to contempt of court. We note that it has been erroneously reported in some quarters of the media that the MD/CEO of National Bank has been fined Sh3.5 million for contempt of a court order. The reality is that this was an order directed at the Bank as a corporate entity and not the MD in his personal or professional capacity, which was clarified in the said order.

The Bank and the MD/CEO take great exception at this misinformation and have also taken steps to ensure that the ruling of the court is appealed both in terms of the legal position as issues of contempt and also the linking and interchangeability of the target between the Bank and the MD in the matter. The Bank would urge that factual reporting on court proceedings and decisions be done to avoid misinformation.