Tuju back in court in fresh attempt to salvage properties

Former Rarieda Member of Parliament Raphael Tuju has lodged a fresh attempt to salvage prime properties in Karen, Nairobi, in a Sh1.9 billion loan row with East Africa Development Bank (EADB).

In his case, filed before the Constitutional Court in Nairobi, Tuju now claims that the law that establishes the regional bank was declared unconstitutional last year, and the government has failed to change or amend it.

His lawyer Gregory Ndege argued that the bank cannot pursue anyone in Kenya, as its powers were anchored on two sections of law that were declared unconstitutional in a case filed by Paul Lihanda Nusu against the National Assembly and Senate in Machakos.

“It is the petitioners’ case that the respondent’s authority to advance credit, to hold and enforce security, and to enforce any judgment or obligation against persons and property within Kenya is wholly derived from and dependent upon Section 2(1) and (2) of the EADB Act which provisions which have been declared unconstitutional and are now void ab initio,” argued Ndege.

He said that on March 20, 2025, Justice Francis Rayola Olel declared Section 2(1) and (2) of the EADB Act to be unconstitutional for allowing the Treasury Cabinet Secretary to commit taxpayers’ money to the bank without Parliament’s oversight.

At the same time, the lawyer said that the judge also found that the amendments to the EADB Act, done in the Finance Bill 2013, were illegal for lack of public participation.

However, he stated that the court gave Parliament until March 20, 2026, to regularise the Act, something which it allegedly did not do.

Ndege asserted that it should not be treated as if the law never existed in the first place.

According to him, the net effect of the judgment is that the enforcement of the judgment against Tuju from the United Kingdom could not have taken effect in Kenya, owing to the finding of the court.

Tuju’s company, Dari Limited, entered into an agreement with the bank on April 10, 2015, under which it agreed to give Dari a Sh943.9million ($9.3 million) loan. The loan was for the acquisition of a 22-acre forested land dubbed Entim Sidai in Karen and the purchase of a 94-year-old bungalow built by a Scottish missionary, Dr Albert Patterson, which operated a high-end restaurant and 14 rooms.

Part of the loan was meant to help in the construction of 12 luxury two-storey bungalow homes at Sh100 million each, worth Sh1.2 billion, sitting on part of the sprawling, serene land in Karen. It would have made him richer by Sh2.4 billion.

Tuju claimed that he was approached by the bank’s Chief Executive Officer, Vivian Apopo, who said they were willing to support him in buying the prime 23-acre land in Karen.

This was when things were still good.

When the battle started, they went before the UK High Court Judge Daniel Toledano.

Tuju accused the EADB of reneging on the release of Sh294 million to build the luxury homes for sale, which he said was meant to help repay the money.

However, the development of the 12 luxury homes worth Sh1.2 billion fell behind schedule, and Tuju’s company defaulted on repayments, setting the stage for asset seizures.

Toledano dismissed Tuju’s case and found he had no arguable defence. He further said the bank was under no obligation to lend the additional Sh294 million.“A further facility was indeed proposed and discussed, but it never reached the stage of being agreed and implemented. No facility agreement was concluded and no other contractual obligation to lend this amount was agreed upon, according to the material before the court,” he said.

He appealed in the UK again, and this was also dismissed. EADB then moved to have the judgment recognised in Kenya.

Tuju, in all courts in Kenya and also raised in the East African Court of Justice, claimed that EADB was fully aware that in the absence of the development of the housing units for sale as envisaged in the project proposal, Dari would not be able to service the loan facility.

He also accused the EADB of stopping KCB Group from taking over the loan and derailing equity investments in the deal by Dubai investors. 

“The investor was ready to pay EADB sh1billion as part of the money they had given him and inject a further billion into the two projects at Dari and Entim Sidai, but the EADB refused,” he argued.

He argued that EADB was holding Sh 4.2 billion worth of security.

However, EADB, in its response, said it does not need the court’s intervention or mediation for payment, as the borrowers are already in default.

It asserted that to date, it has not gained access to the charged property and cannot ascertain how much it is worth.

The lender accused Dari, the former minister and his children of barring receiver managers from accessing the property.

The regional lender also argued that it has yet to receive any offer from any firm or bank willing to take over the loan.

“It must be with ‘tongue in the cheek’ when the applicant on one hand clearly admits having taken monies from the first respondent, not having paid the respondent any monies since 2016, and now seeks, on the other hand, albeit belatedly, the court’s intervention to purportedly engage in determining the amount payable to the facility agreement,” argued EADB.

Tuju also questioned the UK Judge and EADB’s lawyers’ conduct.

The politician claimed he was not given a chance to argue his case and was not allowed to question witnesses who had been fronted by the lender.

He equated the judgment delivered on June 19, 2019, to re- colonizing the country, adding that Justice Toledano and EADB’s lawyer in the UK, Michael Sullivan, shared chambers, hence there was outright bias.

While denying the allegations, EADB lawyers Githu Muigai, Sullivan and former Uganda solicitor General Peter Kabatsi argued that the politician had lost the battle in the UK, first before the High Court and on appeal.

 According to them, Tuju ought to have sought a recourse in the UK and not a Kenyan Court. EADB lawyers said he had not made any payments or shown commitment to offset the loan.

According to Githu, the UK court judgment meets the Constitutional threshold for it to be enforced in Kenya, as Tuju participated in the UK case, and was allowed to even fight on appeal.

The former Attorney General also argued that Tuju was trying to reopen the case afresh in Kenya, in a bid to deny his client an opportunity to recover its money.

“ Those provisions being void ab initio, giving effect to a judgment premised upon void legal authority would require Kenyan courts to recognise, validate, and enforce rights and obligations that the supreme law of Kenya has extinguished,” he continued.

Tuju wants the court to declare that the agreement between him and EADB, and the guarantees he issued in 2015 for the loan, are null and void.

At the same time, he wants the court to find that EADB lacks legal authority to pursue him for the loan.

Tuju has been fighting over the years to salvage Etrim Sidai and Dari from the auction. However, the Dari property has allegedly been sold off and changed ownership.