Politics and policy
g 
Lamin Manjang, Standard Chartered Bank CEO (left); Kenya Bankers
Association chief executive Habil Olaka and Central Bank of Kenya
governor Njuguna Ndung'u (right). StanChart is one of the defendants in
the interest rates suit along with KBA and the CBK. Photos/FILE
By GALGALLO FAYO
In Summary
- Court further granted interested bank clients 45 days to apply for enjoinment from the day that the notice will be published in the media, noting that these will allow expeditious determination of the dispute.
- Justice Gikonyo ruled that the notice shall disclose the nature of the suit and the relief sought, full name of the petitioner and her advocate Samuel Gichuki.
Kenyan banks were Wednesday thrown into a
free-for-all legal battle after the High Court opened the door for
millions of past loan borrowers to join a potentially ruinous
nine-year-old suit on interest rates.
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Justice Francis Gikonyo allowed Rose Florence Wanjiru’s
application seeking the court’s leave to invite, through newspaper
advertisements, willing bank customers to join a suit she has filed
challenging the legality of interest rates charged since the enactment
of the Banking Act of November 1989.
The judge agreed with Ms Wanjiru that it was
important for all persons interested in the matter to be enjoined to
avoid the challenge of dealing with multiple suits of similar nature and
in the interest of quick delivery of justice.
Justice Gikonyo subsequently directed Ms Wanjiru’s
lawyer Samuel Gichuki to file in court a copy of the proposed notice of
invitation within seven days for approval.
“The plaintiff shall, within seven days, submit to
the court for approval a notice by public advertisement which is drawn
in accordance with this ruling and order I rule 8 (2) of civil procedure
rules,” said the judge.
Public advertisement of the suit, he said, is an
“enabler of access to justice and getting them impleaded in the suit,
either to support the case or to oppose it”.
The court further granted interested bank clients
45 days to apply for enjoinment from the day that the notice will be
published in the media, noting that these will allow expeditious
determination of the dispute.
Protracted litigation
Justice Gikonyo said that the time limit was
necessary in order to avoid the protracted litigation that may delay
determination of the suit.
Ms Wanjiru had in a petition filed in 2003 sought orders compelling Standard Chartered Bank
and other lenders to return all money they have levied their customers
without the approval of the Finance minister as required by the Banking
Act of 1989.
The law provides that “no institution shall
increase its rate of banking or other charges except with the prior
approval of the minister”.
The petition, which was earlier dismissed on a
technicality, got a new lease of life last October when the appeals
court ruled that the High Court erred in its decision to dismiss it.
The suit was dismissed on grounds that the
petitioner had failed to seek the court’s permission to sue on behalf of
other customers.
Ms Wanjiru in April succeeded in reinstating the
precedent-setting case that among other things requires banks to produce
evidence that they actually sought and obtained the minister’s
permission to levy the charges
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