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Jirongo-linked firm loses bid to freeze South Sudan accounts

NEWS
By Kamau Muthoni | May 19th 2021
Cyrus Jirongo. [Courtesy]

A company associated with politician Cyrus Jirongo has suffered a major setback after the Court of Appeal declined to freeze South Sudan government accounts over Sh5 billion dispute.

 After the High Court lifted the orders barring the Salva Kiir-led Government from transferring the contested money from National Commercial Bank of Africa (NCBA) and Stanbic Bank, Jirongo’s firm, Yu Sung Construction Limited appealed hoping to reinstate the orders.

However, Court of Appeal judges Daniel Musinga, Patrick Kiage and Gatembu Kairu dismissed the application noting that Yu Sung had not proved that if the court rules in its favour, South Sudan is not capable of paying.

“Will the intended appeal be rendered nugatory unless the orders sought are granted? We think not. The first respondent (South Sudan Attorney General) is the official representative of a sovereign State, which has an embassy in Kenya. It has not been alleged that if the appeal is successful the Republic of South Sudan shall be incapable of satisfying the decree that may be issued,” the judges ruled.

At the same time, the court observed that it is unclear whether the money held in the two banks in the name of The Bank of South Sudan is owned by the State or can be handed to a creditor in the event of a default. According to the judges, the bank is autonomous from the South Sudan government.

“The end result is that this application is dismissed and the interim orders that we granted on March 16, 2021, are hereby vacated. The costs of the application shall be in the appeal,” they continued.

The case stems from a decision given by the High Court. Justice Joseph Sergon had initially directed that the Salva Kiir-led Government should not transfer the contested money from NCBA and Stanbic.

Justice Sergon issued the orders four days after Justice Saidi Chitembwe lifted the orders which froze the two accounts.

According to Justice Sergon, the orders by Justice Chitembwe and Justice Jaden Thuranira appear to be conflicting with each other. Justice Thuranira extended orders freezing South Sudan accounts to February 25, 2021.

“The matter be mentioned on February 25, 2021, before the presiding judge civil division for directions. The interim orders are hereby extended till February 25, 2021,” Justice Thuranira directed.

However, Justice Chitembwe in a separate ruling found that the orders in favour of Yu Sung had lapsed on February 10, 2021, adding that South Sudan was at liberty to operate its accounts.

Justice Saidi Chitembwe lifted the orders which froze the two accounts. [Courtesy]

“The second and third respondents (NCBA and Stanbic) having been served with the orders of February 10, 2021, should comply with those orders and allow the Government of South Sudan to operate its account freely,” Justice Chitembwe ruled on February 26.

He directed that the file be again placed before Justice Mbogholi Msagha who is the presiding judge and that the registry should forward any application filed by any party before March 4, 2021, to him to deal with it.

Aggrieved by Justice Chitembwe’s orders, Yu Sung filed another application on February 28, 2021, asking the court to suspend the same as it moved to the Court of Appeal.

Justice Sergon agreed to give them 14 days and suspended Justice Chitembwe’s orders.

“In view of the facts that various judges have issued orders which appear to be in conflict, I think the court best placed to determine an application such as the one before this court is the Court of Appeal. An order for stay of execution of the order issued by Justice Chitembwe to last for 14 days pending filing a formal application seeking for a stay of execution pending appeal before Court of Appeal,” he ruled on March 2.

At the heart of the case is a deal to construct Dr John Garang memorial military academy and which Yusung is demanding for its pound of flesh from a consent signed before the East Africa Court of Justice(EACJ) while South Sudan claims that the firm never honored its end of the bargain and therefore should not be paid.

At the EACJ, Yusung had asked the court to force South Sudan pay USD 46 million (Sh 5.3 billion) which has accrued over time. It also sought orders to force the country to export crude oil cargo which is equivalent to constructing the military academy and another one to construct Natinga Warehouses to a company in the United Emirates. The proceeds, according to the company would be held in a joint account between South Sudan’s defense ministry and Appolo Advocates to ensure prompt payments.

On November 26, 2020, they allegedly got into a deal to have the money paid in five instalments. Yusung went to court, seeking to attach South Sudan accounts saying that it had learned Exim Bank had wired some USD 250 million (USD 27 billion).  It flashed a disobedience flag to argue that South Sudan does not enjoy immunity.

Yusung’s director, Omeke, in his affidavit filed before the court argues that the consent recorded before the regional court cannot be contested.

“There is no immunity of any nature whatsoever that has been pleaded or established and none is available in relation to commercial transactions entered into by the state,” Omeke argues.

The President Salva Kiir Mayardit-led government in its reply to the case says that the case amounts to stealing from South Sudan’s citizens as the projects cited never barely started. It also asserts that the attached accounts are non-commercial and allowing Yusung to have the money would be equivalent to denying South Sudan citizens 3.12 per cent of their budget.

In its reply, the government claims that the orders by the court have grounded its operations, adding that it is aiding a money-laundering plot. To support its case, it filed affidavits by a senior military officer Brigadier General Dau Duur, its first undersecretary, ministry of finance and planning Garang Majak Bol.

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