1998 United States Embassy Bombing Qualified Settlement Fund v Muiruri & another [2023] KEHC 20014 (KLR)

1998 United States Embassy Bombing Qualified Settlement Fund v Muiruri & another (Commercial Case E048 of 2021) [2023] KEHC 20014 (KLR) (Commercial and Tax) (7 July 2023) (Ruling)

Neutral citation: [2023] KEHC 20014 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Commercial Case E048 of 2021

DAS Majanja, J

July 7, 2023

Between

1998 United States Embassy Bombing Qualified Settlement Fund

Plaintiff

and

Mary Ngunyi Muiruri alias Mary Wairimu Muiruri

1st Defendant

Diamond Trust Bank Limited

2nd Defendant

Ruling

Introduction and Background 1. On 25th January 2021, the Plaintiff filed suit by way of a Plaint dated 15th January 2021. It avers that it is a juridical person established in the United States of America (USA) under section 468B of the Internal Revenue Code for the purpose of administering and distributing the proceeds of recovery obtained on behalf of plaintiffs in various lawsuits holding final judgments against the Republic of Sudan and the Islamic Republic of Iran which cases were filed and adjudicated in the US. These lawsuits were filed and adjudicated on behalf of some of the victims of the 7th August 1998 terror attack and bombing of the USA Embassy in Nairobi. The proceeds and/or funds distributed by the Plaintiff are received from the United States Victims of State Sponsored Terrorism Fund (the “USVSST Fund”), which is a statutory fund established by the US government pursuant to the United States Victims of State Sponsors of Terrorism Act to provide interim recovery for “eligible applicants” holding final judgments against a State Sponsor of Terrorism from a United States Federal Court under 18 U.S.C. Section 1605A. That victims who do not hold such a final judgment are not eligible to receive any benefits from the USVSST Fund or from the Plaintiff.

2. The Plaintiff states that MM-Law LLC is a law firm established and operating in Chicago, Illinois, USA, with branch offices in Miama Florida, USA and Tel Aviv, Israel and acts on behalf of some of the judgement creditors as well as persons such as the 1st Defendant and other Kenyans who were victims of the terror attack but who were not plaintiffs in any of the lawsuits, and who have not been awarded any judgment. The Plaintiff states that on 4th April 2020, MM-LAW filed a lawsuit in the United States District Court for the District of Columbia against Islamic Republic of Iran on behalf of the 1st Defendant and other Kenyans; Katana et al. v The Islamic Republic of Iran et al., Civil Action No. 1:19-cv-02068. The Plaintiff contends that this lawsuit currently is still under litigation and no judgment or order for any relief has been obtained therein and that just as other judgement holders/creditors, if successful, the claim would lawfully entitle the 1st Defendant to receive distributions from the Plaintiff or from a new Qualified Settlement Fund, to be established for the benefit of future judgment holders.

3. The Plaintiff avers that the 1st Defendant’s claim is yet to be adjudicated thus the 1st Defendant is not eligible to receive any distributions from the USVSST Fund or the Plaintiff, a fact which the 1st Defendant is also aware of. That among the judgement creditors represented by MM-LAW is another Kenyan, Mary Njoki Muiruri and in accordance with its mandate, MM-LAW filed legal claim on behalf of the said Mary Njoki Muiruri against the Republic of Sudan or the Islamic Republic of Iran on or about 5th August 2008. Her claim was adjudicated and a final judgment for compensation was made in her favour on 25th July 2014 whereupon MM-LAW applied to the USVSST Fund on her behalf in 2015. The USVSST Fund determined that Mary Njoki Muiruri is an “Eligible Applicant” and is entitled to receive distributions from the USVSST Fund through the Plaintiff.

4. The Plaintiff states that on or about October 2020, the Plaintiff received USD 65,683. 50 from USVSST for the benefit of Mary Njoki Muiruri. That on or about 16th November 2020, the Plaintiff acting upon MM-Law’s erroneous instructions, inadvertently through its bank Citibank NA, remitted through electronic banking means USD 65,683. 50 to the 1st Defendant’s bank account number 001****001 held by the 2nd Defendant (“DTB”). That MM-Law’s error occurred as a result of the close similarity between the 1st Defendant’s name – Mary Ngunyi Muiruri and that of the intended lawful beneficiary, Mary Njoki Muiruri and that except for their middle names, the 1st Defendant and the intended lawful beneficiary have exactly similar names as they appear in MM-LAW’s database/records.

5. The Plaintiff claims that the 1st Defendant does not have any rightful or legal claim or title to the USD 65,683. 50 that was erroneously transferred to her bank account. That on or about 10th December 2020, following the realisation of the inadvertent error, the Plaintiff through its bank Citibank NA, issued a recall of the USD 65,683. 50 from DTB which recall DTB acknowledged. The Plaintiff further states that on 16th December 2020, after the Plaintiff and Citibank NA had issued a recall, the 1st Defendant wrote to MM-law requesting a letter normally provided to the recipient’s bank to enable the recipient to access the remitted funds. Therefore, that as at 16th December 2020, the 1st Defendant did not have access to the funds and DTB ought to and was legitimately expected to have frozen and/or blocked the said funds having been made aware prior thereto that there was a dispute over the funds.

6. The Plaintiff contends that MM-Law has never provided or issued the letter requested by the 1st Defendant and could not have done so in view of the error in transmission of the funds. That through general and established banking practices, norms, standards and/or regulations, DTB knew and/or ought to have ascertained and/or verified the source of the funds before allowing the said funds or any part thereof to be withdrawn and that before allowing the withdrawal of the said funds or any part thereof, DTB had a duty to exercise reasonable care and diligence to verify and/or ascertain the source of the said funds and the purpose for which they were remitted. The Plaintiff states that despite the recall and notification of the reason for the erroneous remittance of the said funds into the 1st Defendant’s bank account, the 1st Defendant is blocking and/or unlawfully preventing and refusing to allow the repatriation of the said funds back to the Plaintiff. That DTB has notified and/or informed the Plaintiff’s bank, Citibank NA, that it cannot reverse the transaction and repatriate the USD 65,683. 50 without the consent of the 1st Defendant, which consent the 1st Defendant has withheld unreasonably and/or is unlawfully refusing to give.

7. On the basis of the matters pleaded, the Plaintiff seeks the several reliefs including judgement against the Defendants jointly and severally for the USD 65,683. 50.

8. Based on the averments in the Plaint, the Plaintiff has now filed the Notice of Motion dated 10th December 2021 made, inter alia, under Order 13 Rule 2 and Order 36 Rule 1 and Rule 5 and Order 51 Rule 1 of the Civil Procedure Rules (‘’the Rules’’)seeking summary judgment against the Defendants for the said sum of US$ 65,683. 50 and an order compelling DTB to refund to the Plaintiff this sum.The application is supported by the grounds on its face and the supporting affidavit of Charles Marr, who is engaged as a Project Director of the Plaintiff, sworn on 10th December 2021. It is opposed by DTB through the Grounds of Opposition dated 25th February 2022 and the replying affidavit of DTB’s Legal Officer, Francis Kariuki sworn on 28th February 2022. Together with their pleadings, the parties have also filed written submissions.

The Application 9. In addition to the Plaintiff’s averments in the Plaint as I have set out above, it states that the 1st Defendant entered appearance on 10th February 2021 but has never filed a Defence or any response to the application. That DTB filed a Statement of Defence dated 1st March 2021. Thus, the Plaintiff states that since the 1st Defendant has failed to file her defence, it automatically follows that neither the 1st Defendant nor DTB have any right or lawful claim or title to continue withholding the sum of USD 65,683. 50 erroneously transferred to the 1st Defendant’s account.

10. It contends that without any defence or contest by the 1st Defendant, there is no triable issue or maintainable defence by DTB and there being no defence or contest against the suit by the 1st Defendant, summary judgement ought to be entered against the 1st Defendant and DTB. The Plaintiff avers that DTB has admitted receiving the subject funds and has also acknowledged that the Plaintiff issued a recall for the subject funds, which DTB received on 11th December 2020 and that on 2nd February 2021, the Court issued an order blocking and/or freezing the 1st Defendant’s bank account number 001****001 or any other account held with DTB for the purpose of blocking freezing and/or preserving the sum of USD 65,683. 50 or its equivalent in whatever currency held pending the hearing and determination of this suit. That this court order has neither been contested, set aside or varied.

11. The Plaintiff states that DTB’s only defence to its claim is that the 1st Defendant has refused to give her consent to the repatriation of the subject funds and there being no contest against the Plaintiff’s claim or defence to the suit by the 1st Defendant, there is no reason why DTB should not be compelled to refund the USD 65,683. 50.

DTB’s Reply 12. DTB opposes the application on the ground that it is an abuse of the court process. It states that the application is contrary to Order 36 Rule 1 of the Rules as it filed a statement of defence on 1st March 2021 before the application and the suit against it is not for liquidated damages or recovery of land.

13. DTB admits that USD 65,683. 50 was remitted on 17th November 2020 through electronic transfer to the 1st Defendant's account number 001****001 held by it and the said amount was credited on 17th November 2020. It also does not deny that the Plaintiff through its bank Citibank issued a recall of the USD 65,683. 50 on 11th December 2020. It avers that it immediately informed the 1st Defendant of the recall request for a debit authority in respect of the amounts received but the 1st Defendant declined to issue the debit authority. That without express instructions from the 1st Defendant, DTB has no duty to block, preserve and/or hold the money as this would be an adverse infringement of the customer-banker relationship between the 1st Defendant and DTB as it could not repatriate the funds to the Plaintiff as the 1st Defendant did not consent to the return of the funds.

14. DTB contends that from the e-mail correspondences exchanged between the Plaintiff and the 1st Defendant from 28th December 2020 and 10th January 2021 in the Plaintiff's bundle of documents, it is clear that there is a dispute between the Plaintiff and the 1st Defendant as to the identity and owner of the funds. That DTB is not a party to the proceedings in relation to the compensation for the United States Embassy bombing, therefore, it is not in a position to ascertain who has a better claim to the funds and the dispute can best be resolved between the Plaintiff and the 1st Defendant. DTB states that as at the time the Plaintiff obtained the court order of 2nd February 2021, the 1st Defendant had withdrawn majority of the funds leaving behind a sum of USD 5,553. 89 which is still frozen in the 1st Defendant’s bank account.

15. DTB maintains that the application lacks merit as it has a defence which raises triable issues and that there being no defence by the 1st Defendant does not ipso facto mean that there is no triable issue or that DTB lacks a defence and that accordingly, the mistake and/ or indolence of the 1st Defendant should not be visited upon DTB.

Analysis and Determination 16. It is common ground that summary Judgment is provided for under Order 36(1) of the Rules which states:36(1)In all suits where a plaintiff seeks judgment for—a.a liquidated demand with or without interest; orb.the recovery of land, with or without a claim for rent or mesne profits, by a landlord from a tenant whose term has expired or been determined by notice to quit or been forfeited for non-payment of rent or for breach of covenant, or against persons claiming under such tenant or against a trespasser,where the defendant has appeared but not filed a defence the plaintiff may apply for judgment for the amount claimed, or part thereof, and interest, or for recovery of the land and rent or mesne profits. [Emphasis mine]

17. That the 1st Defendant entered appearance but has not filed a defence is not contested. As to whether the claim against it is a liquidated demand, I can only borrow the definition of ‘a liquidated claim’ as defined in The Supreme Court Practice Volume 1 at page 33 which states that, “A liquidated demand is in the nature of a debt i.e a specific sum of money due and payable under or by virtue of contract. Its amount must either be already ascertained or capable of being ascertained as a mere matter of arithmetic. If the ascertainment of a sum, even though it be specific or named as a definite figure requires investigation beyond mere calculation, the sum is not a “debt or liquidated demand” but constitutes “damages.” (see also Vibhuti Hardware Limited v Mirage Supply & Contractors Ltd (Civil Suit E771 of 2021) [2022] KEHC 149 (KLR) (Commercial and Tax) (27 January 2022) (Ruling)].

18. The sum of USD 65,683. 50 being sought by the Plaintiff is a straight up sum borne out of an alleged erroneous payment to the 1st Defendant through her account held by DTB. The figure is definite and requires no investigation or complex arithmetic to ascertain it and thus, I have little difficulty concluding that this sum is a liquidated demand. Since the claim is liquidated and the 1st Defendant has entered an appearance but has not filed a defence or raised any defence by way of a replying affidavit or otherwise, it follows that the court may grant summary judgment against her.

19. On its part, DTB filed its statement of defence prior to the Plaintiff filing its application for summary judgment. Ordinarily, the court will not enter summary judgment against a party unless it is satisfied that it has not raised any triable issues either in its statement of defence or in the affidavit in opposition to the application for summary judgment or in any other manner. In Job Kilach v Nation Media Group Ltd, Salaba Agencies Ltd & Michael Rono NRB CA Civil Appeal No. 94 of 2006 [2015] eKLR, the Court of Appeal went on to state that a bona fide triable issue is any matter raised by the defendant that would require further interrogation by the court during a full trial and that the Black's Law Dictionary defines the term “triable” as, “subject or liable to judicial examination and trial” and it therefore does not need to be an issue that would succeed, but just one that warrants further examination by the court.

20. I agree with DTB that it has nothing to do with the dispute between the Plaintiff and the 1st Defendant hence the fact that judgment has been entered against the 1st Defendant does not ipso facto mean that judgment ought to be entered against DTB. DTB has its own defence which should be considered on its merits. I have gone through DTB’s statement of defence and its deposition in opposition to the application and I agree with the Plaintiff that the only reason it opposes the suit and application is because the 1st Defendant has not given it consent to debit its account. However, there is a question whether DTB ought to have acted on the Plaintiff’s recall by either freezing or stopping any transaction by the 1st Defendant in respect of the subject funds and whether acting on the recall without the 1st Defendant’s consent would have been a breach of the statutory and fiduciary duty of DTB to the 1st Defendant. These are, in my view, triable issues that ought to be determined before making DTB refund the US 65,683. 50 to the Plaintiff, if at all. I therefore dismiss the application as against DTB.

Disposition 21. For the reasons I have set out, I make the following orders in respect of the Plaintiff’s application dated 10th December 2021:a.That summary judgment be and is hereby entered for the Plaintiff against the 1st Defendant for USD 65,683,50 together with interest thereon at court rates from the date of filing suit until payment in full and costs of the application and the suit.b.The application against the 2nd Defendant is dismissed with costs.

SIGNED AT NAIROBID. S. MAJANJAJUDGEDATED AND DELIVERED AT NAIROBI THIS 7TH DAY OF JULY 2023. F. MUGAMBIJUDGECourt Assistant: Mr M. OnyangoMs Soweto instructed by Soweto and Company Advocates for the Plaintiff.Mr Airo instructed by Madhani Advocates LLP for the 2nd Respondent.