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Court orders bank to unfreeze trader’s account

NEWS
By Geoffrey Mosoku | December 23rd 2018
A Gulf African Bank branch along Kenyatta Avenue in Nairobi.

The High Court has directed a bank to lift the freeze on the account of a businessman in a dispute over interest fee.

The Nairobi businessman, Mohamed Abdi, obtained orders from the Commercial Court on Wednesday directing Gulf African Bank to stop freezing his account. 

Justice Grace Nzioka also directed the bank to grant the trader unfettered access to his funds.

The bank had, through its legal officer Lawi Sato filed an affidavit stating that it was claiming the funds in the trader’s account as interest accrued on a Musharakah facility granted to him. 

Abdi, through his lawyers Ahmednasir and Abdikadir Advocates argued that the bank which is an Islamic financial institution is not supposed to charge interest on a Musharakah facility and the loan should have been subject to Islamic Shariah.

The court set full hearing for the case on February 6, 2019.

The businessman who moved to court last week claims damages from the bank for the loss of time and value of his money unlawfully frozen.

He also wants the court to declare that Islamic financing does not attract the levy of interest unlike conventional loan. 

On September 13, Abdi said he deposited 200,000 dollars (about Sh20 million) in his account with the Gulf Bank.

On October 1, he went to the bank’s Eastleigh branch to remit Sh20,639,580 via RTGS to a business supplier for the supply of building materials only to find his account frozen.

“I was unable to transfer the funds held in my account for its intended purposes. Upon inquiry, the branch manager informed me that the funds were frozen by orders of the legal department and no further explanation was offered,” the trader says in court papers.

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