Standard Investment Bank Limited v Bomas of Kenya

5. The grounds are: 1. On 22.11.2022, the court entered judgment in favour of the decree holder in terms of the arbitral award dated 4.5.2020 for Kshs. 81,335,280.40/- plus arbitration costs of Kshs. 570,000/- exclusive of VAT and interest of 13% on both the principal and costs until payment in full. 2. The decree was issued on 11.7.2023. 3. Despite being served with the decree, the judgment debtor made no effort to settle the decretal sum. 4. The decree holder filed an application dated 1.8.2023 to attach monies held in the judgment debtor’s bank accounts with the 1st garnishee. 5. Through a ruling dated 30.11.2023, the court allowed the application and Kshs. 7,702,934.05 was recovered. However, the amount was not enough to satisfy the decretal sum in full. 6. The parties thereafter made an agreement on 30.12.2023 to settle the decretal sum in full by 30.06.2024. In good faith, the decree holder accommodated the judgment debtor’s request for staggered payments. 7. The judgment debtor failed to comply fully with the settlement plan, and failed to settle the outstanding decretal sum by 30.6.2024. 8. The judgment debtor owes Kshs. 87,205,500.49 as of 23.4.2025 and the debt continues to accrue. 9. The decree holder has established that the judgment debtor holds accounts numbers 1108986668 and 1108985580 and account number 0102489053700 with the 2nd garnishee, and there is no reason why the balances should not be used to satisfy the decree of this court. 10. It is in the interest of justice that the orders sought are granted as the judgment debtor is truly indebted and has not made efforts to settle the decretal sum. Judgment debtor’s application 6. The judgment debtor’s application is brought under Order 40 Rule 7 of the Civil Procedure Rules. It is supported by the affidavit sworn by its acting Chief Executive Officer, Jimmy Okidiang’i and written submissions dated 14.11.2025. It is premised on the grounds that: 1. The monies held in the subject account belong to the State Department for Culture, the Arts and Heritage and the Tourism Promotion Fund. 2. The judgment debtor is holding the monies in trust to finance a project currently being implemented through it. 3. The funds have been committed to settlement of invoices for ongoing projects, some of which are already due and have been prejudiced by the garnishee order nisi. 4. Unless the garnishee order nisi is discharged, the projects will stall and delayed payments may lead to unwarranted costs of interests, penalties and litigation. 5. It would be unjust for the garnishee order nisi to be made absolute where it has been proven that the monies garnished do not belong to the judgment debtor and are not for its benefit. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19239/eng@2025-12-18 2

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6. The respondent would not suffer any prejudice if the garnishee order nisi is discharged, as monies for settlement of the decretal sum have already been provided for in the supplementary budget, due to be disbursed in June 2025. Response 7. In response, the decree holder filed grounds of opposition dated 30.6.2025 and a replying affidavit sworn by Job Kuhumba on 27.6.2025. 8. The decree holder contended that no provisions in the Public Finance Management Act (PFMA) and Tourism Promotion Fund (TPF) Regulations expressly prohibit the garnishment of the subject funds. The Act and Regulations do not override the Civil Procedure Act’s provisions regarding garnishment of decretal debt and do not limit this court’s jurisdiction to enforce a lawful judgment. The decree holder asserted that public law protections do not bar private law enforcement. 9. The decree holder faulted the judgment debtor for not producing any documentation or other evidence of the intention to create a trust in respect of the funds held by the 2nd garnishee. It asserted that constructive or implied trusts are equitable creations which the court may only in exceptional circumstances and absolute necessity, impute to prevent an injustice. That settlement of a lawful debt is not an injustice requiring such intervention. The IFRS rules require trust funds to be clearly and expressly marked in financial statements. The statements produced by the judgment debtor clearly reflect the funds held by the 2nd garnishee as ordinary cash balances. Submissions 10. The DH submitted that no sufficient grounds have been established by the judgment debtor to bar the garnishee nisi orders being made absolute. It also submitted that the unsigned letters produced by the judgment debtor in purported proof of its intention to pay the decretal debt it owes lack ownership and authenticity and have no probative value. 11. The DH relied on: - 12. 1. African Commuter Services Ltd v Kenya Civil Aviation Authority & 2 others [2014] KEHC 8482 (KLR) 2. G4S Kenya Limited v Busuru [2025] KEELRC 958 (KLR) 3. Diamond Trust Bank Kenya Limited v Invesco Assurance Company Limited & another [2020] KEHC 2149 (KLR) 4. Otieno Ragot & Co. Advocates v City Council of Nairobi (2015) eKLR 5. In Re Estate of Chadrakant Devchand Meghji Shah (Deceased) 2017 KEHC 8812 (KLR) 6. Peter Ndungu Njenga vs. Sophia Watiri Ndungu [2000] eKLR 7. African Commuter Services Ltd v Kenya Civil Aviation Authority & 2 others [2014] KEHC 8482 (KLR) 8. A A Bayusuf Sons Ltd v Northern Water Services Board 2019 KEHC 2488 (KLR) 9. G4S Kenya Limited v Busuru [2025] KEELRC 958 (KLR) The JD submitted that it has the locus standi to participate in these proceedings. It also submitted that the funds held in the account operated by the 2nd garnishee are held by it in trust and that the https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19239/eng@2025-12-18 3

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account should be discharged from the garnishee order nisi. The JD urged the court to dismiss the DH’s application and to award it the costs. 13. The JD relied on: 1. Ngaywa Ngigi & Kibet Advocates v Invesco Assurance Co. Ltd; Diamond Trust Bank (Garnishee) [supra] 2. Peter Ndungu Njenga v Sophia Watiri Ndungu [2000] eKLR (NAIROBI CIVIL APPEAL NO. 2 OF 2000) 3. Re Estate of Chadrakant Devchand Meghji Shah (Deceased) 2017 KEHC 8812 (KLR) (Mombasa High Court Family Division Civil Case No. 37 of 2013 (O.S)) 4. Tom Ojienda and Associates v National Land Commission; National Bank of Kenya (Garnishee) [2019] KEHC 6210 (KLR) 5. Five Star Agencies Limited v National Land Commission; Kenya National Highways Authority (Intended Respondent); National Bank of Kenya (Garnishee) [2023] KEELC 16631 (KLR) Analysis and Determination 14. The issues before the court are: 1. Whether the JD has locus standi in the garnishee proceedings. 2. Whether the funds held in the JD’s account operated by the 2nd garnishee should be discharged from the garnishee order nisi and the 2nd garnishee should be discharged from the proceedings. 3. Whether the garnishee order nisi should be made absolute. 4. Whether the 1st and 2nd garnishees should be directed to furnish a full account of all other bank accounts (including any fixed special deposits) they hold on behalf of the JD. Locus standi 15. The DH submitted that the JD’s grounds of opposition and discharge application are misplaced. It stated that the garnishee proceedings are sui generis proceedings that do not involve the JD nor is there room for the JD to apply for setting aside of the garnishee orders. 16. On the other hand, the JD argued that it has complied with the governing principle for challenging a garnishee order nisi by filing an independent discharge application as required. 17. The DH submitted that the JD has not provided any proof of the alleged trust arrangement. It cited the requirements for establishing a valid trust, that is, a trust deed or similar instrument setting out the trustee, identifiable beneficiaries, the subject matter of the trust and the objects of the trust. 18. In Ngaywa Ngigi & Kibet Advocates v Invesco Assurance Company Limited; Diamond Trust Bank [supra] the court considered whether the respondent (the JD) had the locus standi to challenge an application seeking a garnishee order absolute through a replying affidavit. The court found that: - “the procedure for them (JD) if they were aggrieved was to file an application to set aside the same and not leverage in the instant proceedings to air their concerns.” 19. Therefore, the court rejects the DH’s contention that the JD has no locus standi to challenge the garnishee order nisi through its discharge application. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19239/eng@2025-12-18 4

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Discharge of funds held in the account operated by the 2nd garnishee 20. The burden is on the JD to prove that the attached funds are not legally attachable. Orders 23 Rule 1 of the Civil Procedure Rules. 21. In Precast Portal Structures v Kenya Pencil Company Ltd & 2 others [1993] eKLR, Rtd. Justice Kuloba held that: “ The burden is on the objector to prove and establish his right to have the attached property released from the attachment. On the evidential material before the Court, a release from attachment may be made if the Court is satisfied. (1) that the property was not, when attached, held by the judgment-debtor for himself, or by some other person in trust for the judgment-debtor; or (2) that the objector holds that property on his own account. But where the Court is satisfied that the property was, at the time of attachment, held by the judgment – debtor as his own and not on account of any other person, or that it was held by some other person in trust for the judgment-debtor, or that ownership has changed whereby the judgment – debtor has been divested of the property in order to evade execution or the change is tainted with fraud, the Court shall dismiss the objection.” 22. The DH argued that the funds in the subject account should not be discharged as there is no proof of a trust relationship. 23. According to the DH, the JD did not produce any documentary evidence to show the existence of a trust on the funds in question 24. The JD asserted that the funds currently held in the subject account are not available for use at its own liberty and can only be applied upon the instructions of the State Department for Culture, the Arts and Heritage, and the Tourism Promotion Fund. It also asserted that the order of garnishee nisi has restricted the project funds for currently ongoing projects causing unnecessary and unwarranted crisis in the implementation of the said projects. It therefore contended that the requirements for establishment of a trust and the necessity for imputation of a trust have been met. 25. I have scrutinized the affidavit in support of the JD’s application and accompanying exhibits. The JD exhibited correspondence dated 7.2.2024 from the Office of the Principal Secretary, State Department for Culture, the Arts and Heritage indicating that the department had received funding from the Tourism Promotion Fund to develop Sanaa Mobile APP and nominating Bomas of Kenya as the implementing agency for the Sanaa e-commerce platform. 26. The JD also exhibited correspondence dated 7.2.2024 indicating that the department had received funds from the Tourism Promotion Fund to undertake a presidential directive on construction of Loiyangalani Cultural Centre – Marsabit County. The department nominated Bomas of Kenya as the implementing agency. 27. The JD also exhibited minutes of its board meeting held on 6.12.2023 approving the opening of the project bank account and letters dated 13 and 14.3.2024 giving authority to open the subject account from the Ministry of Gender. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19239/eng@2025-12-18 5

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28. Except, from the submissions by the JD, the funds for payment of this debt was included in the supplementary approrpiateion and were to be released to them in June, 2025. Nothing was said about payment of the debt as alluded to. 29. There is also no evidence that the accounts in question are designated trust accounts for the funds from the Ministry. These loopholes open public funds to waste and plunder. 30. Accordingly, the court is not satisfied that the JD has proven that the funds in the subject account are held by it in trust for the State Department for Culture, the Arts and Heritage. 31. Therefore, the court finds that there is no sufficient reason to review the garnishee order nisi to discharge funds held in the subject account. 32. Having found so, the prayer seeking discharge of the 2nd garnishee, is found not to be merited. Notably, however, upon satisfaction of the garnishee order absolute, there will be no legal basis to keep the bank in the proceedings regarding the account. Whether the garnishee order nisi should be made absolute. 33. Order 23 Rule 4 of the Civil Procedure Rules provides: “ If the garnishee does not dispute the debt due or claimed to be due from him to the judgment debtor, or, if he does not appear upon the day of hearing named in an order nisi, then the court may order execution against the person and goods of the garnishee to levy the amount due from him, or so much thereof as may be sufficient to satisfy the decree, together with costs of the garnishee proceedings; and the order absolute shall be in Form 17 or 18 of Appendix A, as the case may require.” 34. The JD exhibited e-statements for its bank accounts operated by the 1st garnishee showing a total balance of Kshs. 273,676.44/- as of 21.5.2025. 35. The 1st garnishee filed a replying affidavit sworn by its manager, Joan Diffu on 27.6.2025 in response to a notice to produce by the DH seeking production of a time-stamped account statement for account no. 1108985580 showing exact times when the transactions were processed on 25.4.2025, when the garnishee order was issued. 36. On 11.6.2025, the court directed the 1st garnishee to comply with the notice to produce. 37. The deponent stated that the bank’s Lang’ata Branch received the court’s direction on the said date at 2.28 PM from the DH’s advocates through its legal department and upon receipt, commenced compliance procedures and placed a hold on all accounts held by the JD effected at the close of business. 38. The deponent highlighted four transactions that were done on 25.4.2025. Cheque payment of Kshs. 220,400 to Timothy Munywo was processed at 2.24 PM. Payment of Kshs. 647,600/- to Joseph Kamau, Kshs. 5,003,883.00 made to 93 staff members of the JD and Kshs. 131,400/- to Leah Kemunto Kamau. 39. The deponent stated that the transactions were salary payments initiated by the JD on the morning of 25.4.2025 and once initiated the instructions were logged to the system for processing. They were initiated and effected prior to the system-wide hold effected on the JD’s accounts at close of business. 40. The JD stated that it does not deny its indebtedness to the DH. It highlighted that it has paid over 37 million towards settlement of the decretal sum. It faulted the DH for claiming that it had not made any efforts to settle the decretal sum. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19239/eng@2025-12-18 6

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41. The JD pointed out that in a letter dated 28.2.2025, the Principal Secretary for the National Treasury intended to include the debt owed to the DH in the next supplementary budget, for settlement. 42. On its part, the DH contended that the JD has no intention of paying this decretal debt — the Government’s financial year ended on 30th June 2025 without provision being made for settlement of this decretal debt. 43. From the pleadings and the evidence on the record, there has been no challenge by either the 1st garnishee or the JD as to the garnishment of the funds held in the two accounts operated by the 1st garnishee. 44. In Cooperative Bank of Kenya Limited v Makiya & another [2025] KEHC 10995 (KLR) the court observed that: “ ..in garnishee proceedings such as the present one, it is the duty of the garnishee to prove whether or not the garnishee is indebted to the judgment-debtor. To discharge this burden, the garnishee has to produce sufficient evidence in that regard and whether or not the funds in its hands are sufficient to satisfy the decree.” 45. Therefore, the court is satisfied that the garnishee order nisi in respect of the two accounts held by the 1st garnishee ought to be made absolute. Accounts of all other bank accounts held 46. The DH urged that the 1st and 2nd garnishees should be directed to furnish a full account of all other bank accounts (including any fixed special deposits) they hold on behalf of the JD. 47. However, the DH ought to but has not laid a basis for such orders. Disposal 48. In conclusion, the court makes the following orders: 1. The JD’s application dated 5.5.2025 is dismissed. Each party to bear its own costs. 2. The DH’s application dated 23.4.2025 is allowed in the following terms: a. A garnishee order absolute be issued directing the 1st garnishee, Kenya Commercial Bank to release or remit to the Decree Holder such sums as are held in account numbers 1108986668 and 1108985580 in favour of the Judgment Debtor to satisfy the Decree given on 11.7.2023. b. The sums held by the 1st garnishee be remitted to the Decree Holder through the following bank account within 7 days of the date of this Ruling: Account name: KN Law LLP Account Number: 0100003012535 Bank: Stanbic Bank (Kenya) Limited Swift Code: SBICKENX Bank Code: 31010 Branch: Upper Hill Medical Centre https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19239/eng@2025-12-18 7

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c. The sums held by the 2nd garnishee upon J/D’s accounts be remitted to the Decree Holder through the following bank account within 7 days of the date of this Ruling: Account name: KN Law LLP Account Number: 0100003012535 Bank: Stanbic Bank (Kenya) Limited Swift Code: SBICKENX Bank Code: 31010 Branch: Upper Hill Medical Centre 3. Costs of this application are awarded to the 1st garnishee and the DH. To be borne by the JD. DATED, SIGNED AND DELIVERED AT NAIROBI THROUGH MICROSOFT TEAMS ONLINE APPLICATION THIS 18TH DAY OF DECEMBER, 2025 ---------------F. Gikonyo M Judge In the presence of: Mueke for Decree Holder Maina for Judgment debtor Muriithi for Ondieki for Standard Bank CA - Kinyua https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19239/eng@2025-12-18 8

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