Arusha. The East African Court of Justice (EACJ) will decide on a case filed against Central Bank of Kenya over the collapsed Imperial Bank Limited.
The regulator has been sued at the regional Court over alleged losses incurred for taking over control of the bank in 2015.
The suit was filed by Pontrilas Investment Limited on behalf of the financial institution, claiming that the central bank had failed its duty before closing it.
These, according to the applicant, included failure by the bank to act against the alleged massive fraud by official of the collapsed bank.
The applicant further claimed that the illegal transactions, which came to their knowledge in August 2017, took place with connivance of either CBK officials or agents.
However, a legal counsel for the central bank James Ochieng contested the suit, arguing CBK was not an institution of the East African Community (EAC).
"It is not an institution of the Community established under the Treaty to be sued but rather a body under the government of Kenya", he said.
"It is only the Attorney General of Kenya who can appear before the Court for any wrong acts committed by CBK", he added.
Ochieng further submitted that the EACJ does not have the jurisdiction to entertain cases against CBK ‘since those matters can only be handled in the Judiciary of Kenya’.
He, therefore, asked the Court to allow the preliminary objection of the case with costs.
But Prof. Fredrick Ssempebwa on behalf of the applicants said under the EAC Monetary Union Protocol, CBK was ‘conceptually and functionally’ an institution of the Community.
He said the protocol gives a pivotal role to the partner states' central banks in the implementation of the said pact.
The Court will deliver the ruling on the preliminary objection before scheduling the hearing of the main case.