City Lawyer Sued Over Sh1M Debt

SBM Bank has sued Nairobi based lawyer seeking close to Sh1 million.

The lender wants the court to enter the judgement of Sh900,000 against lawyer James Gitau Singh with interest at commercial rates until payment in full.

The Bank argued that in a gazette notice number 6833 of 6th July 2018, the bank took business from receivership of Chase bank Kenya and certain assets and liabilities right and obligations including rights and obligations request to lawyer Singh accounts were validly transferred to the bank.

By the agreement in writing into Chase Bank on 31st November in 2005, the lender agreed to provide banking services to the lawyer both I shilling and Euro accounts which were all material times held and operated by lawyer Singh or his authorized agents.

According to the lender, it was a term of the said Agreement Chase Bank (Kenya) Limited would honour all cheques drawn by the lawyer and carry out any such instructions he may give in connection with the subject account.

This was notwithstanding that such action would cause the subject account to be overdrawn or cause an overdraft to be increased.

“In compliance with the terms of the agreement the Chase Bank (Kenya) Limited honoured all Cheques drawn by the lawyer and presented for payment and on various occasions made payments when the subject accounts were underfunded leaving the account in an overdrawn position, ” says SBM Bank.

The Bank add that upon demand being made to Singh with regard to the overdrawn amounts, about May, 2011 he opted to sell his 757, 656 shares in Kenya Commercial Bank to offset part of the outstanding arrears.

The afore-stated sale realized Sh. 19,397,492.01 which amount was credited into his Kenya Shillings account to offset part of the outstanding arrears.

Subsequently, on 26th May, 2011, the proceeds of the sale of Signh’s KCB shares were converted into Euros and a sum of 158,605.00 Euros credited into the Signh’s Euro account to offset part of the outstanding arrears thereby leaving the sum of Euros 304, 020.56 outstanding and Sh. 2, 823.98 as at 30th June, 2011.

The lawyer failed or neglected to settle the afore-stated outstanding amount of Euros 304, 020.56 and Sh. 2,823.98 which ums continued to accrue interest at the contract rates.

The Bank  and Chase Bank (Kenya) Limited engaged in negotiations with a view to amicably resolving the issue of the outstanding arrears. At the negotiations, Signh requested and Chase Bank (Kenya) Limited agreed to waive all the interests accrued on the outstanding arrears and he pay an all-inclusive figure of Euros 299,576.00 and Sh. 192,312.00 in full and final settlement.

“As a pre-condition of the afore-stated agreement, Chase Bank (Kenya) Limited was to prepare and forward a letter of offer setting out the terms of the agreement to the Defendant and the Defendant was to confirm his acceptance to the terms therein by executing the said letter of offer, ” says the lender.

Pursuant to the foregoing the Chase Bank (Kenya) Limited prepared and forwarded to the Defendant a letter of offer dated 4th August, 2015. The Defendant ever since has failed to forward a response despite several reminders.

Bank adds that despite numerous demands and reminders, the lawyer has failed, refused or neglected to execute the letter of offer or settle the outstanding arrears of Euros 299,576.00 and Sh. 192,312.00 as agreed by the parties during the aforestated negotiations.

The Bank avers that contractual and fiduciary relationship between the lender and Signh exists by virtue of the operation of the Kenya Shillings Account and a Euro Account  which accounts are still active, operational and running to date.

Bank further avers that Signh’s subject accounts continues to be in debt and currently he owes the Bank the sum of Euros 530,692.81 and Sh. 367, 688 as at 17th September 2020.

Singh has opposed the bank application.