Ethics & Anti-Corruption Commission v Stephen Sanga Barrawah & 20 others [2020] eKLR Case Summary

Court
High Court of Kenya at Nairobi, Anti-Corruption & Economic Crimes Division
Category
Civil
Judge(s)
J. N. Onyiego
Judgment Date
September 30, 2020
Country
Kenya
Document Type
PDF
Number of Pages
2
Explore the Ethics & Anti-Corruption Commission v Stephen Sanga Barrawah & 20 others [2020] eKLR case summary. Delve into the key findings and legal implications of this significant judgment.

Case Brief: Ethics & Anti-Corruption Commission v Stephen Sanga Barrawah & 20 others [2020] eKLR

1. Case Information:
- Name of the Case: Ethics and Anti-Corruption Commission v. Stephen Sanga Barrawah T/A Mediscope Agencies & Others
- Case Number: ACEC NO. 7 OF 2018
- Court: High Court of Kenya at Nairobi, Anti-Corruption & Economic Crimes Division
- Date Delivered: September 30, 2020
- Category of Law: Civil
- Judge(s): J. N. Onyiego
- Country: Kenya

2. Questions Presented:
- The central legal issue is whether there is a cause of action against Barclays Bank of Kenya (20th Defendant) for its involvement in a suit regarding funds allegedly obtained through fraudulent means by the 11th Defendant.

3. Facts of the Case:
- The Ethics and Anti-Corruption Commission (EACC) initiated a suit against 21 defendants, including Barclays Bank of Kenya, seeking reliefs related to the recovery of public funds. The EACC alleged that the County Government of Kilifi had made irregular payments totaling Kshs. 26,460,000 to Mediscope Agencies for the procurement of insecticide-treated nets. The 11th Defendant, David Kiso Ndunda, received Kshs. 2,805,603 from these funds, which he deposited into his account at Barclays Bank.

4. Procedural History:
- The EACC filed a plaint on April 15, 2018, and the case progressed through various stages, culminating in the 20th Defendant's application on November 29, 2019, to strike out the suit against it. The bank argued that it was merely providing banking services and had no cause of action against it. The EACC opposed the application, asserting that the bank needed to be included to enforce the court's orders regarding the funds.

5. Analysis:
- Rules: The court considered the EACC's mandate under Section 11(j) of the EACC Act, which empowers it to institute proceedings for the recovery of public property and compensation.
- Case Law: The court referenced *Langat v Co-operative Bank of Kenya Ltd (2017)*, which defined a cause of action as a factual situation that entitles one person to seek a remedy against another, and *Time Magazine International Ltd and Another v. Michael Rotich and Another (2000)*, which discussed reasonable cause of action.
- Application: The court reasoned that the bank had not committed any wrongdoing and was simply providing banking services. It concluded that there was no cause of action against Barclays Bank, as the EACC's claims were exclusively against the 11th Defendant, and the bank's involvement was unnecessary.

6. Conclusion:
- The court struck out the suit against Barclays Bank, determining that there was no cause of action. This decision underscored the principle that banks should not be liable for funds deposited by clients without knowledge of their origin. It emphasized the need for judicial efficiency and the avoidance of unnecessary litigation involving financial institutions.

7. Dissent:
- There were no dissenting opinions noted in the ruling.

8. Summary:
- The High Court of Kenya ruled in favor of Barclays Bank, striking out the suit against it due to the lack of a cause of action. The case highlights the legal principle that banks, as custodians of client funds, should not be drawn into litigation related to the source of those funds unless they have committed wrongdoing. This ruling has implications for how financial institutions are treated in cases involving fraud and the protection of their operational integrity.

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