Sh39,000 claim against StanChart balloons into billions for bankers

Standard Chartered Bank has merged eight of its regional business units into four in a bid to cut costs and improve decision making. PHOTO | FILE |  NATION MEDIA GROUP

In Summary

• The case was filed by Ms Rose Florence Wanjiru against Standard Chartered Bank in 2003.
• Ms Wanjiru asked StanChart to refund her Sh38,960, which she said was levied by the bank without approval from the minister of Finance as required by the Banking Act.
• In June last year, the court also let Ms Wanjiru’s invite, through newspaper advertisements, willing bank customers who were affected in a similar way to join her suit.

By ABIUD OCHIENG
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Banks on Thursday lost another round in the fight to stop a case that could see them pay customers billions of shillings in refund for account charges levied since 1989.

High Court Judge, Mr Justice Francis Gikonyo, on Thursday allowed several clients to be enjoined in the suit and directed their lawyers to file documents to support their case.

Lenders through their umbrella body Kenya Bankers Association had strongly opposed the blanket joinder of all interested parties and wanted the matter to be restricted to parties as contained in the original suit.

The case was filed by Ms Rose Florence Wanjiru against Standard Chartered Bank in 2003. Ms Wanjiru asked StanChart to refund her Sh38,960, which she said was illegally levied by the bank as there was no approval for the charges from the minister of Finance as required by the Banking Act.

JOIN SUIT

The banking law forbids an institution from increasing its rate of banking or other charges with the approval of the minister. In the course of her application hearing, Ms Wanjiru requested the High Court to allow other aggrieved customers to join her in pursuing the claim.

In June last year, the court also let Ms Wanjiru’s invite, through newspaper advertisements, willing bank customers who were affected in a similar way to join her suit.

About 185 people and institutions sought to be enjoined. KBA, which was also sued as representative of the banks, opposed this saying the court ruling would violate those customers’ constitutional rights which state that “a person shall not be compelled to join an association of any kind. Every person joined in the case as a party would become personally liable to an order for costs against him or her. No one should be placed in such a position without a decision made with full knowledge of the facts and consequences and as a result of his or her own free will,” KBA argued.

VIOLATION OF LAW

In his ruling, Mr Justice Gikonyo said the court had allowed most of the requests, because despite the fact that each party had a separate contract with a particular bank, the question that has arisen relates to alleged violation of the banking law.

“Therefore, bank customers who have the same interest may apply to be enjoined. Similarly, banks which have the same interest in the outcome of this case are also eligible for joinder,” Judge Gikonyo said.

The banks had a few reprieves though. Mr Justice Gikonyo declined to enjoin those whose cases had been determined by other courts. Also denied opportunity to participate are customers of banks which have closed.

The judge also declined to allow the case to apply to all bank customers who had allegedly been affected by the violation of the law.