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February 19, 2020 - 20:44
Cyprian Is Nyakundi
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Barclays Bank Sued

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A bitter dispute over alleged breach
of banker-customer relationship between a transport company and Barclays Bank
of Kenya Ltd has now spilled into the courts.

AO Bayusuf & Sons Ltd is seeking
to be paid Sh25.9 million by the lender, claiming the money was unlawfully
debited from its account.

According to the firm, the bank in
March 2015 offered a convectional asset facility to it but later the company
indicated that it would prefer to have the loan converted to meet Islamic
finance principles.

AO Bayusuf & Sons further says
that Barclays offered to convert the Sh300 million loan into Murabaha facility
as part of their Islamic La Riba Asset finance product for financing a fleet of
trailers and prime movers.

“The said purported Murabaha
facility did not meet the requirement of a Murabaha lending structure as
defined by the Islamic Finance principles,” say suit documents. It also argues
that the purported Murabaha facility was not disbursed as agreed but was made
available over a period of one year and that it was given Sh240 million instead
of Sh300 million.

In March 2018, the transport company
says that after opting to move its business to another bank, the amount
outstanding on its loans with the bank were settled except for the purported
‘La Riba’ loan which the bank had charged and debited its account with an extra
Sh25 million over and above the outstanding facility.

Through relationship manager Simeon
Mzugha, Barclays says that it had contractual and legal justification to debit.

The case has been fixed for hearing
on February 27.


Mahakamani News is Kenya’s top court reporting and crime coverage website. If you have a case that needs coverage, or if you are facing injustice from powerful forces, fired unfairly or reporting any corruption or relevant news pertaining judiciary etc please contact us via cases@mahakamani.news


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