Tuju challenges EA bank’s immunity in regional court

Raphael Tuju, General Secretary of the Jubilee Party, at a press conference. [Jenipher Wachie, Standard]

Jubilee Party Secretary General Raphael Tuju has taken the East African Court of Justice to challenge the regional bank’s decision to claim immunity from a ruling by Kenya’s High Court.

Tuju had taken the High Court of Kenya to seek 3.1 billion shillings for damages and breach of a loan agreement from the East African Development Bank (EADB).

He claimed the lender killed his dream of acquiring and developing a multibillion shillings estate.

The bank filed a response claiming it enjoyed immunity from prosecution in Kenya, Uganda, Tanzania, Rwanda and Burundi.

He also asked the court to close the case. Mr. Tuju says the bank was seeking “immunity for impunity.”

Battles between the politician and the EADB began in 2015 when his company, Dari Restaurant, took out a loan of 1.2 billion shillings from the bank. Tuju and SAM Company Ltd had signed an agreement for the acquisition and development of prime land in Karen.

In the loan agreement, EADB would finance the purchase of a 22-acre woodland called Entim Sidai and a 94-year-old bungalow owned by a Scottish missionary, who operated an upscale restaurant and 14 guest rooms. ‘accommodation.

Tuju said the EADB then advanced its business, Restaurant Dari Sh 951.6 million on July 31, 2015. The additional Sh 294 million was to help build 12 luxury two-story single-story houses. which will be sold for 100 million Sh each worth 1.2 billion Sh. on earth.

But, Tuju in a case before the High Court of Kenya, which begins hearing next month, accused the EADB of reneging on the contract to finance the second part of the loan (Sh 294 million) for the development of a housing project to refinance the repayment.

The EADB then filed its response claiming immunity.

In court documents filed with the Arusha-based East African Court of Justice, Tuju argues that a business entity cannot claim immunity when dealing with customers, and wonders how their customers can obtain an appeal if they are prejudiced by the decision of the financial authority. institution.

He cites the U.S. Supreme Court ruling on March 7, 2019, which said the World Bank does not have immunity and could be sued when its overseas investments go wrong.

Tuju noted that the United States Supreme Court issued a 7-1 decision in Jam v International Finance Corporation, ruling that international financial institutions, including various branches of the bank, may be subject to lawsuits in cases where their investments in foreign projects cause damage.

The Supreme Court ruling overturned a decades-old presumption dating from the founding of the World Bank in 1945 that organizations affiliated with the bank are completely immune from such lawsuits.

In court documents, Tuju also claimed that the EADB was not legislated in the East African Legislature and therefore lacked regulations to grant diplomatic immunity to the lender.

He said the regional bank was overseen by the council of finance ministers of the five countries with a council headed by permanent secretaries. The presidency rotates.

Tuju argues that while the bank’s rules require board members to serve for six years, some would sit for more than ten years, adding that its board members give themselves free loans – embezzling taxpayers’ money.

Elna M. Lemons