Judge should give independent verdict

By Nyakundi Nyamboga

It is a Friday afternoon and Kenya Commercial Bank lawyer Philip Nyachoti asks the presiding judge to recuse herself from further hearing of cases in which the bank risks paying Sh3.8 billion should the courts rule against it.

Two days earlier, the judge declined the bank’s oral application to quit hearing the cases.

The cases are Milimani HCCC No 494 of 2008, in which Benjoh Amalgamated Limited claims Sh863,317,998 in damages against Kenya Commercial bank and Bidii Kenya Limited, Milimani HCCC 90 of 2009, in which Benjoh Amalgamated Limited seeks Sh2,243,067,494 in damages from the bank and Milimani HCC 505 of 2008 pitting Muiri Coffee Estate Ltd against the bank and three others.

The thread joining these cases is 443 acres of land in Thika, given to the bank as collateral and later sold and transferred to a third party after alleged default in loan repayment.

Law firm

In the formal plea for the judge to step down from hearing the suits, the bank’s lawyer said the judge was unlikely to be neutral because a law firm associated with her family had a dispute with the bank.

According to an affidavit sworn by a bank official, Mr David Malakwen, in support of the application for disqualification, "the law firm of Khaminwa & Khaminwa Advocates, closely associated to the judge and two members of the judge’s family are practicing advocates of the High Court, has been a tenant of the bank and the landlord/tenant relationship between them has become acrimonious and the said firm has subsequently been sued by the bank to recover rent arrears in the sum of Sh8,296,994.16 and the bank has subsequently issued an eviction notice to the firm."

The bank also claimed the judge has issued adverse rulings and/or judgments against it, even when the Court of Appeal has stayed proceedings in some matters such as Milimani HCCC No 547 of 2008.

The bank further alleged the judge had made conclusive findings against the bank in two applications in suits over the same subject without the benefit of a full trial.

The bank says on November 2, Justice Khaminwa delivered a ruling in this case in an application by Muiri Coffee Estate Ltd for injunction and made three final findings without the benefit of a trial.

Statutory power

These were: that the three months statutory notice served upon Muiri by the bank in exercise of its statutory power of sale in respect of LR No 10075 Kiambu, the subject of this suit, was invalid.

It also said the subject charge documents in respect of LR No 10075 Kiambu do not comply with the legal provisions of section 46 of the Registered Titles Act and are therefore null and void and thirdly, that the bank charged and/or altered the interest rates of the subject loan account without consulting the Minister for Finance, in order to extinguish Muiri’s equity of redemption.

The bank also claimed that on November 16, the Judge delivered a ruling in Milimani HCCC No 494 of 2008; Benjoh Amalgamated Limited versus Kenya Commercial Bank and Bidii Kenya Limited made conclusive findings in respect of the matter without the benefit of a hearing and/or a trial.

Subject contract

These findings are: the bank "manufactured" statement of accounts it issued to Muiri; the statutory notice the bank issued on November 11, 2005 in respect of LR No 10075 Kiambu to the Muiri in exercise of its statutory power of sale is invalid; the bank breached the subject contract with Muiri by declining to issue funds for purchasing flowers and releasing funds to shippers and made up statements of account to deceive the plaintiff and that subject loan account was maintained by the defendant fraudulently.

The bank says it is "justifiably apprehensive there has been a miscarriage of justice in the two rulings, which it believes is partially attributed to the landlord/tenant relationship with Khaminwa and Khamniwa Advocates, which has become acrimonious".

Huge claims

As such, further proceedings before the said judge in this suit and the said matters will occasion miscarriage of justice to detriment of the bank in view of the huge claims against in the suits in the aggregate total sum of Sh3,806,385,492

Muiri has filed an application in Milimani HCCC No 494 of 2008 seeking the committal jail of Martin Oduor Otieno, the Chief Executive Officer of the bank on the ground that a proper statement of account has not been issued.

It is the bank’s contention that "in view of the judge’s final findings, it is obvious the fate of the CEO is determined".

After hearing the exparte application for disqualification, Justice Khaminwa, granted the bank’s plea.

—The writer ([email protected]) is Standard Group Associate Editor -Legal