German awarded Sh1m over Dubai Bank account freeze

Mr Justice David Majanja. Photo/File 

By GALGALLO FAYO

In Summary

• Justice David Majanja however declined to award Mr Manfred Schmitt Sh59 million he sought from government, on grounds that he failed to prove that he suffered the loss.
• Manfred moved to court in June last year arguing he had incurred heavy emotional and financial loss due to the fraud claims.
• The High Court in December cleared Mr Schmitt of fraud allegations and lifted orders that froze the businessman’s cash at the Diamond Trust Bank.

A German at the centre of a Dubai Bank fraud investigation has been awarded Sh1 million as general damages for unlawful freezing of Sh635 million in his bank accounts by Kenyan police.

Justice David Majanja however declined to award Mr Manfred Schmitt Sh59 million he sought from government, on grounds that he failed to prove that he suffered the loss.

Manfred moved to court in June last year arguing he had incurred heavy emotional and financial loss due to the fraud claims.

The High Court in December cleared Mr Schmitt of fraud allegations and lifted orders that froze the businessman’s cash at the Diamond Trust Bank.

“I do not think the action by the respondents (Police) was motivated by actual malice or bad faith. On the other hand, the 1st petitioner (Mr Schmitt) suffered the humiliation and indignity of his accounts being frozen without lawful cause,” observed justice Majanja.

“Taking these factors into account and the authorities I have cited above, a global sum of Sh500,000 for each of the petitioners (Mr Schmitt and his company)  would go some way in vindicating the petitioners’ rights,” he ruled.

READ: German seeks damages for Sh635m bank accounts freeze

The Judge further ordered the office of Attorney General and police to foot half of the cost incurred by Mr Schmitt in application for the claim.

But the businessman will bear the cost incurred by DTB in defending the case after the Judge found that its enjoinment as a defendant was an abuse of the court process.

The businessman moved Sh635 million to DTB in 2011 and transferred the cash to Dubai Bank after 10 months before wiring the money back to DTB, which alerted the Central Bank.

Mr Justice Majanja observed that the businessman’s right to privacy was infringed on when he was searched and his property seized.

The Judge declined to award the businessman compensation for the legal fees he had incurred defending the case.

The Judge said having directed all parties to bear its own cost in earlier ruling when he lifted the freeze, the same cannot be reopened since no appeal against the same has been filed.

He further dismissed Mr Schmitt’s compensation claims for interest and lost business opportunities noting that businessman failed to produce the evidence.

Banking Fraud Investigations Unit got an order from the magistrate’s court allowing it to freeze the cash.