High Court Justice Wilfrida Okwany on Thursday upheld a U.K court ruling that allowed East African Development Bank (EADB) to recover a Sh1.5 billion loan facility from Raphel Tuju’s real estate company – Dari Limited, dealing yet another blow to Mr. Tuju’s already fragile state.
The Jubilee Secretary-General who is currently laid up at the Karen Hospital following a grisly road accident in the wee hours of Wednesday morning en route to the burial of President Moi, obtained the loan on April 10, 2015, with the intention of constructing 12 – Sh100 million two-storey, flat-roofed bungalows sitting on 20 acres, and the purchase of a 94-year-old bungalow built by a Scottish missionary, Dr. Albert Patterson.
According to Justice Okwany, EADB had satisfied all conditions for the U.K ruling to be enforced in Kenya. She subsequently dismissed an appeal filed by Mr. Tuju’s legal team which had moved to court seeking suspension of the U.K verdict on grounds that it was unenforceable in Kenya and that Mr. Tuju was the subject of an unfair hearing.
EADB says that as from November 10th, 2017, it became clear to the bank that they were dealing with a willful defaulter. The bank thus moved in to seize collateral assets – pursuant to a signed contract by both parties, where there was mutual agreement on how the servicing and recovery of the loan would be handled in the instance of a possible default.
While accusing the bank of predatory lending practices, Mr. Tuju through his lawyers Senior Counsels Paul Nyamondi and Paul Muite, claimed that the development of 12 luxury bungalows fell behind schedule and as such, Dari Ltd defaulted on repayments.
He accused the bank of disbursing Sh932.7 million instead of the agreed Sh943.9 million. Tuju claimed that the bank also denied his company a second loan amount of Ksh 294 Million which would have been utilized for Phase 2 construction of housing units meant for sale and therefore servicing the initial loan would not be a problem.
Furthermore, the two properties which the bank was holding as collateral exceeded the loan amount as they were collectively valued at more than Sh 1.8 Billion. The loan was therefore still secure, Tuju argued.
In its defense, EADB accused Mr. Tuju of being economical with the truth. The bank said that Tuju’s company had in fact written to them on September 13th, 2016 stating that it did not need the Ksh 294 Million second loan facility because Phase one of the project was becoming quite attractive to potential buyers.
Dari Ltd said that if it ever needed the second loan facility of Ksh 294 Million, Tuju would source it elsewhere.
According to court documents seen by Maudhui House, Daniel Toledano ( QC), the Deputy Judge of the UK High Court, ruled that Dari Ltd lacked an arguable defense.
“No facility agreement was concluded and no other contractual obligation to lend this amount was agreed according to the material before the court,” he ruled.
EADB stated that it was a regional lender owned by member states and that the bank sources capital from international markets. Therefore, U.K law being applied to this matter was not unusual.