Airline charter company seeks Sh9b from Stanbic for loss of S Sudan deal

A Kenyan bank is embroiled in a legal battle with a South Sudan firm over more than Sh9 billion in an airplane lease deal with the President Salva Kiir Mayardit-led government.

Initially, the case between Stanbic Bank Kenya Limited and Air Afrik Aviation Limited, which is before Commercial Court Judge David Majanja, revolved around Sh1.4 billion.

But Air Afrik Aviation went back to court seeking to amend its case to Sh9 billion, citing an audit done on its financial books.

In the case, Air Afrik Aviation said it offers airline carriage and chartered flight services in South Sudan and the east African region. Its main route is Nairobi-Juba.

It claimed that in 2014, the South Sudan government inked a deal to lease several aircrafts for a year but with the likelihood of being extended for five years.

According to the firm, the total cost for the deal was around Sh2 billion. Justice Majanja heard that the agreement was renewed and the South Sudan government committed to pay a 35 per cent deposit, which was at least Sh722 million.

The firm said that it maintained an account with Stanbic Bank in Juba and the Salvakiir government wired the money on February 8, 2016.

Reverse transaction

According to Air Afrik Aviation, the lender reversed the transaction on May 27, 2016 on the claim that the money had been paid in error.

The company stated that Stanbic first wired back Sh600 million and then debited close to Sh100 million from its account.

Air Afrik Aviation said it had lost money plus the business. It asked the court to amend court papers to rectify the amount of money it is seeking as damages and loss of benefit suffered.

Justice Majanja heard that a financial projection report quantified the loss to be $80 million (Sh9.6 billion) instead of the amount earlier claimed.

But Stanbic opposed the application, arguing that the amendments were not genuine and were only meant to delay the hearing of the case.

According to the lender, the case was filed in 2018 but Air Afrik Aviation only lodged an application to amend the case in March this year.

Stanbic accused Air Afrik Aviation of litigating its case in batches.

The bank asserted that the company has always been aware of the facts of the case and therefore there was no reason for the delay to amend its application.

Stanbic also argued that it will suffer financial losses if the application was allowed. It said the application will require it to return to the drawing board and source for more witnesses.

After hearing the rival arguments, Justice Majanja noted that although Air Afrik Aviation had waited before filing its application he would allow the petition to be amended.