This archive report was first published on 20 June 2020.
Published on June 20, 2020, the Court of Appeal has granted Raphael Tuju a temporary reprieve in his fight to save his company, Dari Ltd, from being liquidated over a Sh1.6 billion loan dispute.
However, Tuju will be required to deposit Sh50 million in a bank account held jointly by his lawyers and those representing the East African Development Bank within the next 30 days, failure of which, the stay orders shall lapse and the application (for appeal) shall stand dismissed.
The dispute between Tuju and the East African Development Bank has been full of intrigues, with two judges separately recusing themselves from hearing the insolvency and receivership matters.
One of the judges hinted at being threatened with removal from office if she did not recuse herself. Justice Francis Tuiyott recused himself from the proceedings for undisclosed personal reasons on June 9.
The bank wants Dari Ltd declared bankrupt for failing to repay the loan advanced to it in April 2015.
Following Justice Tuiyott's recusal, the file has now been taken back to the Presiding Judge of the Commercial Court, Mary Kasango, and will come up on July 2.
In another matter regarding receivership, the bank had filed contempt proceedings against Dari Ltd and its directors for preventing the appointed receiver managers from accessing the company premises.
However, before the hearing of the application, Tuju objected to the matter being heard by Justice Grace Nzioka.
In her recusal, she said Tuju's application for her to recuse herself was strongly-worded and 'at times the court has been treated with little respect.'
The East African Development Bank had appointed George Weru and Muniu Thoithi, both of PWC, as the joint receiver managers.
In an affidavit dated June 5, Mr Weru states that Tuju and his co-directors denied the receiver managers access and refused to provide information as ordered by the court.
Justice Kasango directed the directors of Dari Ltd to 'immediately grant the receivers full, complete and effective access' to its premises in March.
The directors were also to give the company's statement of affairs, financial returns, company records, and cash book.
However, none of these had been complied with, and instead, armed police officers had been deployed to guard the premises and block the receivers.
'The plaintiffs' actions bear the hallmark of impunity, disdain, and wilful disobedience of court orders,' said Mr Weru.
In the Court of Appeal ruling on Friday, the judges granted Tuju the orders on the basis that proceeding with the insolvency and receivership would subject him and his co-directors to suffer substantial loss.
However, the judges took note of the bank's concerns over the disobedience of court orders.
