Raphael Tuju Handed Fresh Blow In Tussle With Bank Over Sh1.2bn Loan

The Supreme Court has dismissed an application by former Cabinet Secretary Raphael Tuju seeking to give more evidence in a loan dispute with a regional bank.

Mr Tuju wanted to table evidence contained in a statement given by an official of the East African Development Bank (EADB) to the Directorate of Criminal Investigations (DCI) last year.

But a five-judge bench headed by Deputy Chief Justice Philomena Mwilu dismissed Mr Tujus application, saying, he had failed to explain the relevance of the statement in relation to the appeal.

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In conclusion, we inevitably find that grant of leave to adduce additional evidence has not been satisfied, Justices Mwilu, Mohammed Ibrahim, Smokin Wanjala, Njoki Ndung'u and William Ouko ruled.

The court had last year allowed Mr Tuju to pursue a second appeal in the dispute with the EADB over a loan borrowed by his company, Dari Limited, in April 2015.

The new evidence related to a witness statement recorded with the DCI by Mr David Washington Barnabas Ochieng on December 21, 2023. Mr Tuju told the court that, while he had been unable to obtain it in good time, the statement was relevant to the case.

If not responded to, the applicant further said, the bank's false and inaccurate claims would remain unchallenged. He claimed the statement supported his case on the nature of the loans as well as the history of the engagement between the parties.

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Mr Ochieng, the appellant had argued, had affirmed that the project comprised two phases; the acquisition of the Tree Lane property and construction and sale of about 20 villas. It further said that the development of the villas was a key component of the project and would have enabled Dari Limited to pay the loan.

Mr Tuju said the statement given to the DCI was completely at odds with an affidavit sworn by Mr Justa Kiragu on May 12, 2023 in response to his appeal at the Supreme Court.

Mr Kiragu stated in the affidavit that Mr Tuju did not complete the conditions attached to the $9.3 million loan and that Mr Tuju unilaterally abandoned development of the Mwitu Road property, among other issues.

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Mr Tuju termed the claims as false and misleading as the loan agreement only envisaged the purchase of the Tree Lane property. The bank opposed the application, arguing that Mr Ochiengs statement concerned the pre-contractual engagements, which were immaterial, and all the issues concerning the loan were fully resolved by the courts in the United Kingdom.

The bank added that Mr Ochiengs statement was personal and had not been made on behalf of the EADB.

In a second application, Mr Tuju wanted the court to strike out the bank's affidavit sworn on January 31, 2024 by Ms Carol Luwaga, a senior legal officer, arguing that it was filed out of time.

The judges also rejected this application, stating that it was not appropriate to strike out the affidavit for being filed four hours and 40 minutes late.

In the appeal, Mr Tuju had accused the lender of providing $9.1 million for the acquisition of the property but the balance, which was meant for the development of high-end residential units for sale, was never disbursed. The bank said the cash was not disbursed because Dari Ltd breached the agreement by failing to pay $11,462,757 as of November 10, 2017.

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The loans were for the construction of Sh100 million two-storey, flat-roofed bungalows sitting on a 20-acre forested land dubbed Entim Sidai and the purchase of a 94-year-old bungalow built by a Scottish missionary, Dr Albert Patterson, which currently hosts a high-end restaurant.

The UK judgment was adopted by the High Court in Kenya in February 2020 but Dari Ltd moved to the Court of Appeal and escalated it to the Supreme Court, as Mr Tuju questioned the adoption of the judgment.