- EDITOR’S BRIEF: Tuju’s troubles underscore the legal risks involved in commercial disputes, which can quickly escalate and result in substantial costs, even when cases are dismissed. Companies and individuals should seek legal advice to avoid legal pitfalls that could result in expensive lawsuits and damage to their reputation.
Former Cabinet Secretary Raphael Tuju is facing new legal challenges, with two prominent lawyers seeking a total of Sh134 million in costs incurred during a commercial dispute. Attorney-General Githu Muigai, through his law firm Mohammed Muigai LLP, and Dr. Fred Ojiambo of Kaplan & Straton Advocates are demanding Sh75.8 million and Sh58.7 million, respectively.
At the same time, the East African Development Bank (EADB) has sued Bank of Africa Kenya Ltd for permitting Tuju to withdraw Sh37.7 million from an escrow account established to manage a property loan given to his company, Dari Ltd, in 2015.
The two lawyers’ demand for fees is separate from another suit filed by EADB, which is pursuing Tuju over an outstanding debt of Sh2.2 billion. In addition, the bank has sued Bank of Africa for the alleged unauthorized withdrawal of Sh37.7 million by Tuju from an escrow account opened by Dari Restaurant and EADB following the disbursement of the $9.3 million loan in April 2015.
The escrow account contained funds that were meant to go toward loan repayments. According to court documents, Sh37,707,275 was withdrawn and transferred from the account between January 2015 and August 2016.
EADB claims that Bank of Africa acted in contravention of the escrow agreement by allowing unauthorized withdrawals and transfers from the account without EADB’s consent or knowledge. The bank is seeking Sh37,707,275 plus interest from Bank of Africa, saying that the money in the escrow account was held as a trust balance in its favor.
Tuju and Dari Ltd filed a suit in 2021 against EADB, Vivienne Yeda Apopo, David Ochieng Odongo, and Jotham Mutoka, claiming they were advanced a $9.3 million loan without full disclosure. The case was dismissed, with the court ordering Tuju and Dari Ltd to pay costs. Bills of costs for the legal fees dispute with Muigai and Ojiambo are scheduled for assessment on May 15, 2023, by the court deputy registrar.
Tuju is facing multiple legal battles, including the EADB debt and disputes with other parties. In 2020, he sought to have a judge presiding over one of his cases sacked. The judge ruled against Tuju and his company, dismissing their claims and ordering them to pay costs.
