Absa bank loses bid to overturn injunction on property auction in Sh1.5 billion case

Absa Bank Kenya has been dealt a major blow after the Court of Appeal refused to set up a three judge bench to hear an application seeking to overturn an injunction stopping it from auctioning property belonging to New Mega Africa.  

The bank failed to stay orders by Justice Mongare preventing the transfer of the title of the property in Kitusuru in Nairobi,to a third party pending active litigation of the case

This means that the civil case in which the bank was ordered to pay the transport firm Sh1.5 billion as compensation over data breach.

The bank has been desperate to overturn a court injunction stopping it from advertising the piece of land as well as overturning the court decision to award the firm Sh1.5 billion as compensation.

Justice Josephine Mongare in June 2023 issued the directive saving New Mega Africa from being auctioned over a more than Sh 80 million debt.

The directive  stopped the bank from advertising for sale, attempting to sell, by private treaty of public auction land known as Title Number 17/267 original number 17/36/10 situated in Kitusuru within Nairobi.

Justice Mongare further issued an order preventing the transfer of the title of the property in Kitusuru in Nairobi, to a third party pending active litigation of the case.

The Kitusuru property as per separate media reports, has been on the target list of top management at the bank-who want to buy it through proxies by way of auction.

The court of appeal decision is a major blow to the bank that has been struggling to save face from numerous court battles with its clients.

The bank made an application dated November 6, 2024, seeking stay orders and the matter certified as urgent on November 15, 2024.

However, the firm in its response argued that allowing proceedings before the trial court to proceed does not in any way negate the issues raised in the Appeal and or suit.

The firm further argued that the trial court is able to determine all issues raised by the parties on merits.

The decision by the court of appeal means proceedings on the Sh 1.5 billion case will proceed as scheduled for December 17, 2024.

The Nairobi court on November 9, 2022 issued a decree, ordering the bank to pay the transport firm billions for allegedly leaking confidential information to third parties, causing the company’s credit ratings to suffer.

The case is expected to take a new twist after the court agreed to admit an application by a former employee to be incorporated as an interested party.

The employee, identified as Evans Murumba according to the court documents, served as the coast region head of commercial affairs for Absa bank before resigning.

He claimed to have been adversely mentioned in the suit and that his image would be damaged by virtue of the court proceedings.

In the suit, the firm is accusing the bank of sharing its account details to third parties against its wishes and the banking regulations.

It blamed Corporate Credit Manager Supporting Business Banking Wycliffe Makori for working with other employees to share its details with a Kenya National Highways Authority officer identified as Jared Makori.

Mr. Jared Makori had before the filing of the suit shown interest in working with New Mega Africa Limited. He is however appearing as a witness for the bank and even issued affidavits in efforts to delink himself from accusations against him.