Imperial Bank Kenya Limited v Janco Investments Limited & 10 others [2022] KEHC 13076 (KLR)

Imperial Bank Kenya Limited v Janco Investments Limited & 10 others (Cause 523 of 2015) [2022] KEHC 13076 (KLR) (Commercial and Tax) (16 September 2022) (Ruling)

Neutral citation: [2022] KEHC 13076 (KLR)

Republic of Kenya

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

Commercial and Tax

Cause 523 of 2015

A Mabeya, J

September 16, 2022

Between

Imperial Bank Kenya Limited ( Under Receivership)

Plaintiff

and

Janco Investments Limited & 10 others

Defendant

Ruling

1. This is a ruling on an application dated December 8, 2021. It was brought under orders 16 rule 1, 5 and 8, order 51 rule 1 of the Civil Procedure Rules, and section 1A, 1B, and 3A of the Civil Procedure Act.

2. The application sought orders that witness summons be issued and order the attendance of Mr Mohamed Nyaoga SC, Chairman, Central Bank of Kenya, Dr Patrick Njoroge, Governor, Central Bank of Kenya and board member, and Ms Sheila M’Mbijjewe, Deputy Governor, Central Bank of Kenya (“CBK officials”).

3. The grounds thereof were set out on the face of the motion and on the supporting affidavit of Salim Janmohamed sworn on December 8, 2021. It was the applicant’s case that the abovenamed CBK officials were crucial in the trial so as to be questioned on the process leading to the placement of the respondent bank under statutory management.

4. That the applicants needed to examine the CBK officials on whether the CBK Board was properly constituted at the time the resolution to place the respondent under statutory management was passed, as the applicants alleged that the CBK Governor was out of the country at that time.

5. They also wanted to question the officials on whether the CBK Chairman called a Board meeting wherein the issue was discussed and resolution for placement passed, and whether the Treasury Secretary, Dr Rotich, called the CBK Governor and advised him not to place the respondent under receivership. That the plaintiff/respondent’s witnesses could not shed light on these issues, thus it was necessary for this court to summon the CBK Officials as they were indispensable to the just and effectual determination of the trial.

6. The respondent opposed the application vide grounds of opposition dated February 8, 2022. The grounds were that the three CBK officials were not compellable under sections 17 and 31(2) of the CBK Act which prohibits potential witnesses from disclosing any information acquired in the performance of their duties. That under article 231(3) of the Constitution provides for the independence of the CBK.

7. It was further contended that the applicants right to access information is limited by section 6(1) (g) and (h) of the Access to Information Act, as the information sought would prejudice the trial wherein the respondent sought to recover fraudulently obtained money.

8. The other ground was that the applicants had no cause of action against the intended witnesses. That the evidence sought from them was not related to the matters in issue in this suit. That only the respondent could summon potential witnesses as it had instituted the suit.

9. The intended witnesses similarly filed grounds of opposition dated January 24, 2022. The grounds were that the intended witnesses were not compellable by virtue of section 17 of the CBK Act, that article 35 of the Constitution did not take away CBK’s powers under article 231 of the Constitution. That the intended witnesses were not parties to the suit, that the issue of CBK’s board constitution was not a matter of law or fact and that section 132 of the Evidence Act protected the persons sought to be compelled as witnesses.

10. The applicants filed submissions dated March 2, 2022 while those of the respondents were dated March 30, 2022. The intended witnesses’ submissions were dated March 29, 2022. The court has considered those submissions and the record.

11. Order 16 rule 1 provides: -“At any time before the trial conference under order 11, the parties may obtain an application to the court or to such officer as it appoints in this behalf summonses to persons whose attendance is required either to give evidence or produce documents.”

12. In Dahir Sadik Ausaad vs Modogashe Construction Ltd & 3 Others [2016]eKLR, the court stated: -“This court has powers to issue summons to witnesses to attend a trial. That is done on the application of any party. It is also done after the case has been certified as ready for hearing.”

13. The respondent and intended witnesses also submitted that the intended witnesses were not compellable. Article 231 (3) of the Constitution protects the independence of the CBK and directly forbids any other person or authority from directing or controlling the CBK. Further, section 17(1) of the CBK Act prohibits the Governor, the Deputy Governor and any other officer or employee of the CBK from disclosing any information acquired in the line of duty.

14. In my view, the independence of CBK as set out in the Constitution does not bar this court from making orders such as the ones sought in the application. Further, the caveat under section 17 of the CBK Act is not a bar to this court from summoning the CBK officials in a proper case to shed light on a matter properly before it. The court holds that the prohibition is in respect of CBK’s internal affairs but not where the process of justice is in course. I reject the respondent’s and intended witnesses’ contention on that issue.

15. The issue for consideration is whether the intended witnesses are relevant to the suit. Differently put, whether the intended evidence or testimony is relevant to the suit. The nature of the suit herein is illegal and fraudulent transactions in a bank. The plaintiff/respondent commenced this suit on the claim that the defendants/applicants had breached their fiduciary duties owed to the plaintiff/respondent. That they had fraudulently obtained money from the plaintiff/respondent and therefore unjustly enriched themselves. That is the money the respondent seeks to recover in this suit.

16. The applicants seek to examine the intended witnesses on issues relating to the process undertaken by CBK to place the respondent under receivership. Unfortunately, the issue of the process of the respondent’s placement under receivership is not an issue before this court. The Central Bank of Kenya is not a party in this suit and examination along those lines is not relevant to this case such as to compel the CBK officials to attend court during the hearing.

17. Further, the intended witnesses submitted that this court had already made a finding on the issue of the placement of the bank under receivership. This was in HCCC J R No 43 of 2016 Imaran Limited & 5 others vs Central Bank of Kenya & 5 others(2016) Eklr. In that case, the petition to seek a declaration that the decision by CBK to place the respondent under receivership was unlawful was dismissed.

18. The respondent’s receivership is not an issue before this court. In that regard, the process of its placement under receivership has already been dealt with in the foretasted case. The finding thus is that the evidence to be tendered by the intended witnesses in not relevant in this suit to warrant the issuance of witness summons as prayed for.

19. This court has seen the 1st applicant’s amended defence dated February 17, 2020. In that amended defence, it was denied that the respondent was properly placed under receivership, and specific allegations were made against CBK, similar to those made in the instant application. However, CBK was never joined as a party.

20. Since there are no specific claims/prayers sought against CBK, my view is that to summon the intended witnesses will not further the cause of justice. It will not assist the court in arriving at a just decision.

21. The upshot is that the application is found to lack merit and is dismissed with costs.It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 16TH DAY OF SEPTEMBER, 2022. A MABEYA, FCIArbJUDGE