The Supreme Court of Kenya has rejected the appeal lodged by former Foreign Affairs Minister Raphael Tuju against the East Africa Development Bank (EADB) in a KES 1.5 billion loan dispute concerning his firm, Dari Limited. The unanimous ruling by the bench, led by Justice Mohamed Ibrahim, signifies a crucial moment in the prolonged legal feud between Tuju and the regional bank.
Tuju, accompanied by his three children and the companies Dari and SAM, had sought a review of the court’s earlier decision allowing EADB to place Dari under receivership to recover the loan. However, the Supreme Court judges found no exceptional grounds in Tuju’s new application to warrant their intervention, thereby upholding the previous ruling.
In their dismissal of the appeal, the judges stated, “The application lacks substance and is disallowed.” The court further mandated Tuju and his co-appellants to bear the costs of the litigation.
Tuju’s legal team, led by senior counsel Paul Muite, contended that the initial ruling unfairly elevated the bank’s stake, rendering it irrevocable, and asserted that EADB was experiencing financial distress. However, these arguments failed to sway the court. Githu Muigai, representing EADB, argued that the new application failed to introduce any new elements of public interest.
At the heart of this legal dispute is the question of whether a United Kingdom judgment favoring EADB can be acknowledged and enforced in Kenya. Tuju is striving to prevent receiver managers from taking control of his Dari Coffee Garden and Restaurant, which secured the loan, and to fend off a bankruptcy suit against him and his children, who serve as directors of Dari.
Tuju contends that EADB did not fully fulfill the agreement to provide KES 1.2 billion for the expansion of his hospitality business in Karen Estate, Nairobi. He alleges that the bank disbursed only around KES 800.0 million and reneged on further funding commitments. Conversely, EADB asserts that Tuju received a loan and must meet his debt obligations.
This case underscores the intricate legal challenges involving prominent individuals and international financial institutions in Kenya. The Supreme Court’s decision not only affects Tuju and his business interests but also establishes a precedent regarding the enforceability of foreign judgments and the sanctity of loan agreements in Kenya.
