Kenyan court issues injunction preventing transactions in South Sudan bank accounts

A Kenyan high court has issued a 14-day injunction stopping any form of transactions in two bank accounts held by South Sudan in Nairobi.

Justice Joseph Sergon said in his ruling dated March 3, 2021, that the injunction would allow for the hearing and determination of counter appeals filed by various parties to the case.

The ruling partly stated: ‘‘An injunction is issued to last for 14 days to restrain the respondents from disposing of, dissipating, removing from the jurisdiction of this court the sum of USD49, 398, 473.9 being the sum as per the consent decree issued to the applicant in the East African Court of Justice vide application no: 15.07.2019 in Reference No 21 of 2019 on 26/11/2020.’’

The battle pits South Sudan and Yu Sung Construction Limited—a company affiliated to Kenyan former minister Cyrus Jirongo—who claims US$ 49 million from the government.

The injunction follows a February 26 ruling by Justice Said Chitembwe, who cleared the Bank of South Sudan to operate freely its accounts in NCBA and Stanbic banks. High Court judge Jaden Thuranira had stayed the December 20, 2020 orders freezing the country’s accounts due to the payment disputes.

Justice Chitembwe highlighted in the ruling on February 10 that the orders freezing the accounts did no longer exist. The court further cleared the firm to move to Kenya’s appellate court to challenge the order issued by Justice Chitembwe.

The dispute

The company was contracted through the Ministry of Defence and Veteran Affairs to build Dr John Garang Memorial Military Academy, four warehouses and fuel depots. According to the Kenyan media, the project which was to run from 2007 to 2011 during independence, attracted a debt of US$18 million, which translated into US$49 million due to interest which piled at US$2.7 million per month over the years.

South Sudan paid US$24 million deposit for the project, which the firm claims to have been exhausted after which it ran into debts after the government refused to pay the remainder. 

On the other hand, Juba administration said in an affidavit filed by Ministry of Finance and Planning First Undersecretary Garang Majak Bol—through Macharia-Mwangi & Njeru Advocates—that the firm did nothing on the site despite pocketing the down payment.

 On February 25, when the court extended the orders freezing the accounts, South Sudan launched a protest in the affidavit saying that Kenyan courts had no jurisdiction to handle the issue.

‘‘Kenyan courts, including High Court of Kenya, have no power to oversee the affairs of South Sudan, including issuing orders against assets of the Republic of South Sudan,’’ the document reads in part.

‘‘It is entirely unfair and oppressive of the court to permit the accounts of a sovereign state to be frozen without hearing. The manner in which the orders were issued is evidence of a violation of the sovereignty of the people of the Republic of South Sudan.’’

The state also lashed at the East African Court of Justice saying the regional court lacked the jurisprudence to prosecute the dispute even as it maintained that it would not pay the amount in question.