Blow to three Ruto allies, tycoon in Sh119m spyware suit

Three close allies of President William Ruto and billionaire Jayesh Saini have suffered a major legal setback after the court rejected their bid to be struck out of a lawsuit alleging the government secretly built a surveillance software to manage its public image.  

Justice Peter Mulwa of the High Court Commercial Division dismissed applications by Head of Public Service Felix Koskei, Ruto's speech writer Eric Ng'eno, former Principal Secretary for National Treasury Chris Kiptoo and Attorney General Dorcas Oduor

The court also dismissed a second application by businessman Saini, founder of Bliss Healthcare, who similarly sought to have his name struck out of the suit filed by Mary Wachuka Maina and her company Jipe Inc before the case could proceed to full trial.  

Justice Mulwa found that the plaintiffs, Wachuka and her firm, raised serious triable issues that cannot be determined at the preliminary stage and should instead be resolved during a full trial.

The senior government official, alongside businessman Saini, wanted their names expunged from the petition in which she is seeking Sh281 million in compensation, arguing that the suit disclosed no reasonable cause of action against them and that they had been improperly joined in the proceedings.

However, Justice Mulwa rejected those arguments in the Thursday ruling, emphasizing that courts should be slow to strike out cases before hearing evidence.

"Striking out pleadings is draconian in nature, and the Court's discretionary power ought to be exercised with the utmost circumspection," the judge ruled.

Wachuka and Jipe Inc claim they were contracted by the defendants to develop specialised software for the Government of Kenya at a cost of  $923,346 (more than Sh1119.7 million, intended to address what they describe as "turmoil" in the Ruto administration's public relations and communications apparatus, including fragmentation in information dissemination and a lack of credibility and authenticity.

She alleges that  Ruto's official Messaging Secretary Ng'eno, the 5th Defendant, was their primary contact who introduced them to businessman Saini, describing him as "the regime's financier" and "oligarch" tasked with funding the project.

They further allege that Saini confirmed this role personally at a meeting at his office on November 22, 2023, and participated in strategic discussions about the project.

Businesswoman Wachuka claim Ngeno represented that funding would be channelled through the National Treasury's confidential vote, a budget line falling under Kiptoo's purview as Principal Secretary and that a meeting had been arranged between her, Koskei as Head of Public Service, and Kiptoo to discuss financing.

In an affidavit filed in court, Wachuka  further alleges that Ngeno made false misrepresentations "with the knowledge and approval and on behalf of the other Defendants."

When the government allegedly changed course and declined to pay for the completed software, Wachuka and her company sued all five defendants, including the Attorney General, claiming breach of contract and fraudulent misrepresentation.

The software, according to court documents, was intended to include spyware, deepfake technology, surveillance tools and troll farms, tools the state has denied commissioning.

Senior State Counsel Bonn Bett argued that the case by Wachuka disclosed no cause of action against the three government officials and that they had been improperly joined, contending that all factual allegations related exclusively to Ngeno and not to Kiptoo, Koskei or the Attorney General.

  The state argued that a person cannot sue or seek legal remedies over an illegal contract, saying the plaintiffs had admitted the agreement involved developing spyware and surveillance technology that allegedly violated the Constitution.  

Justice Peter Mulwa rejected the arguments by the senior government officials ruling that whether the alleged contract was illegal can only be determined at trial, not at the preliminary stage.

"The illegality of the alleged contract, if any, is a triable issue of mixed fact and law. It is not a ground for striking out a suit at this preliminary stage unless the illegality is apparent on the face of the Plaint. The Plaintiffs have pleaded that the software was intended for legitimate purposes such as managing government communications and public engagement," the judge ruled.

The judge further found that the plaintiffs had specifically pleaded in paragraph 32 of the plaint that Ngeno made false misrepresentations "with the knowledge and approval and on behalf of the other Defendants," and that a meeting had been arranged involving both Kiptoo and Koskei to discuss project financing, allegations that, if proved, would establish the two senior Ruto administration officials' direct involvement in the alleged scheme.

Saini, represented by Rachier & Amollo LLP, argued that he had never communicated directly with the plaintiffs.

He said references to his name in WhatsApp conversations between the plaintiffs and  Ng'eno amounted to inadmissible hearsay.

He further argued that he stood to receive no personal benefit from the alleged contract.

As a private citizen, he maintained that he had no legal authority to procure government contracts under the Government Proceedings Act, the Public Finance Management Act and the Public Procurement and Asset Disposal Act.

Justice Peter Mulwa declined to determine Saini's arguments at the preliminary stage, holding that the issues can only be resolved during a full trial.

 "While it is true that there is no evidence of direct communication between the Plaintiffs and the 4th Defendant(Saini) in the form of emails or WhatsApp messages, the Plaintiffs have pleaded that the 4th Defendant was a central actor in the events giving rise to the dispute," the judge held.

The court noted that the plaintiffs had specifically pleaded that Saini was the conduit through which the government would channel payments, given the confidentiality of the project and that he would also oversee the project's implementation, allegations the judge found sufficient to sustain the suit at this preliminary stage.

"The question whether the 4th Defendant was acting as an agent of the Government or as a private individual, whether he owed any duty to the Plaintiffs, and whether he made any misrepresentations are all matters for trial," Justice Mulwa ruled.

 The matter now proceeds to a full hearing on the merits before the Commercial and Tax Division.