This archive report was first published on 24 October 2019.
Published on October 24, 2019, the East African Development Bank (EADB) has taken legal action against Dari restaurant, affiliated with Jubilee secretary-general Raphael Tuju, over a Sh1.4 billion ($13.6 million) loan.
The loan was issued in July 2015 at Sh951 million ($9.19 million) and has since accrued principal and loan interest. Dari restaurant has failed to repay the loan, despite the agreed repayment period of 20 installments.
According to court documents, Dari restaurant signed an agreement on April 10, 2015, to borrow a Sh962 million ($9.3 million) loan with Mr. Tuju and S.A.M Company Ltd as guarantors. However, the restaurant has yet to clear the loan, two years after the agreed grace period.
Despite Dari restaurant's claims that the interest rate charged was not unenforceable, a judge at the High Court of Justice of England and Wales disagreed, ruling that it was a standard clause in loan agreements of the type advanced to the hotel.
“The court is in a position [to conclude] that the rate of default interest is not penal and that the proposed defence does not have a real prospect of success,” the judge ruled.
