Justice Dora Chepkwony directed EcoBank to transfer the money to the law firm of Rene & Hans Advocates LLP, as legal fees and costs the firm is to be paid in a case filed against Kiwipay PTE Ltd.
“”The 2nd respondent(Ecobank) limited is hereby directed to transfer a sum of USD 2,502,675,.00 to the applicant (Rene & Hans Advocates LLP) the same being agreed legal fees and costs on account of legal representation,” directed Judge Chepkwony.
The judge found the application by the law firm was merited and allowed it while dismissing an application filed by Kiwipay (Kenya) ltd.
It was Judge Chepkwony view that an advocate who has been instructed to act for a client has a legitimate expectation that his or her legal fees will be paid by the client whether or not the Advocate or client relationship is severed.
“The applicant ((Rene & Hans Advocates LLP) herein having clarified that he was instructed vide a resolution dated 16th September, 2022 and indeed obtained favourable orders for agreed legal fees of USD2,502,675, it would be unfair and unjust to deny the law firm it’s right to it’s legal fees for work done,” ruled the Judge.
The judge further said that should it come out that the resolution dated 16th September, 2022 was arrived at without authority, then Kiwipay (Kenya) ltd has an avenue to seek redress for breach of fiduciary duties against the directors for passing the resolution in a different forum.
That, however, cannot be the basis for denying the advocate legal fees for work already done.
The law firm had filed an application to block EcoBank from releasing millions to the payment solutions firm, which had initially been frozen on claims of money laundering.
Assets Recovery Agency, which had obtained orders blocking the billions later withdrew the case but directors of Kiwipay fell out before the money were released.
Lawyer Isaac Rene said Maina Njenga and Solomon Maina were bonafide directors and shareholders of Kiwipay Kenya ltd.
The lawyer said the Kenyan directors made a resolution on 15th September, 2022, instructing his law firm to act for them in securing the shareholding and directorship structure of the Kiwipay Kenya ltd, after they had been irregularly removed.
He filed the case and court ordered status quo with respect shareholding and operation of Bank mandates of Kiwipay Kenya ltd confirming Njenga as a signatory.
The law firm was able to secure Sh.19,400,000 held in EcoBank from pilferage and misuse by Kiwipay PTE ltd. However, the Law firm legal fees as agreed on was USD2,502,675 and was to be borne by Kiwipay Kenya ltd.
The law firm argued that upon learning that Kiwipay Kenya ltd had cancelled the instructions to be paid the legal fees which had issued to the Bank and was in the course of moving the funds in its Bank accounts to other different accounts, which is likely to defeat the firm’s claim for legal fees and costs.
The law firm argued that the company does not have other known assets or properties in Kenya and would be urgent that agreed legal fees are released and paid to the law firm.
However, Gregory Schmidt a director of Kiwipay PTE ltd in a replying affidavit claimed he was a majority shareholder of the Kiwipay Kenya ltd together with Njenga and Maina.
He said Kiwipay Kenya ltd financial status has been crippled by numerous court orders made specifically the interim orders issued in the instant case which were obtained on concealment and non-disclosure of material facts.
He claimed Kiwipay Kenya ltd has never engaged Rene & Hans Advocates LLP for any legal services and this is because there was no resolution by the Kiwipay Kenya ltd or its Board of directors
Schmidt claimed that at the time the purported instructions were issued Njenga, Lekishe and Maina were not directors nor officials of the Kiwipay Kenya ltd and not capable of making any agreements on behalf of the company hence the process is illegal.
He added the law firm did not enumerate how it arrived at the inordinately high and unconstitutionable legal fees it is claiming.
The documents filed by Schmidt were, however, expunged from the court record because they were filed without the leave of the court.