Blow to Tuju in Sh1.2bn debt battle with bank

Former Cabinet Secretary Raphael Tuju has suffered a setback after the High Court dismissed his application seeking a review of a United Kingdom court’s ruling in a Sh1.2 billion dispute with the East African Development Bank (EADB).

Tuju had asked the court to reconsider the recognition of a judgment by the High Court of Justice, Business and Property Courts of England and Wales, Queen’s Bench Division, which had ruled against him.

Justice Josephine Mongare of the High Court in Nairobi dismissed the application on Friday, terming it “lacking in merit, statutorily misplaced, and an attempt to relitigate matters already conclusively determined.”

“It is statutorily misplaced, barred by res judicata and res sub judice, and founded on evidence that is neither new nor capable of altering the outcome of this court’s ruling,” Justice Mongare stated.

Tuju had asked the court to review its January 7, 2020 judgment, which recognised the UK decision, arguing that new evidence had since emerged that could influence the outcome.

He cited testimony from David Odongo, who had testified on behalf of the bank in the UK proceedings.

According to Tuju, Odongo recanted parts of his earlier sworn affidavits that were relied upon in obtaining the UK judgment and its registration in Kenya.

Tuju maintained that the loan in question was part of a two-phase project involving land acquisition and the construction of villas, but the loan facility only reflected one phase.

He also argued that the second loan of Sh294 million — which he claimed was essential for servicing the first loan — was not disbursed.

Odongo is said to have testified that the bank was aware Tuju’s business could not repay the first loan without the second phase being financed.

The loan facility was reportedly intended for the construction of a Sh100 million two-storey bungalow and the purchase of a 94-year-old bungalow built by a Scottish missionary, which currently operates as a restaurant in Karen.

EADB opposed the application, arguing that Tuju had not participated in the UK proceedings and therefore lacked legal standing to seek a review of the judgment.

“The issues raised in this application — including the alleged two-phase project and non-disbursement of the Sh294 million — were fully litigated and determined by the English High Court,” the bank submitted.

In her ruling, Justice Mongare held that the matter had been conclusively determined by a court of competent jurisdiction and that her court would not allow a collateral attack on a foreign judgment already recognised by the High Court and the Court of Appeal in Kenya.

The judge also found that Odongo’s testimony did not amount to new evidence warranting a review.

“His testimony did not reveal any facts that were not already within the knowledge of the parties or that were absent from the evidentiary record before the English court,” she said.

Justice Mongare dismissed the application with costs, ruling that it lacked merit.