Economy
City law firm in Sh2 billion dirty cash case wins Sh337m legal fees
Tuesday April 18 2023
A law firm that represented three Kenyans in the fight for more than Sh2 billion which had been frozen last year over claims of money laundering has won legal fees amounting to Sh337 million.
The High Court judge ruled last month that Rene & Hans Advocates LLP should be paid $2,502,675 despite protestations from a Frenchman who claims the money belongs to him and never instructed the lawyers to file the case.
Mr Gregory Schmidt opposed the payment arguing that Stephen Maina Njenga, Solomon Joseph Maina and Felix Rantuu Lekishe were not directors and shareholders of KiwiPay Kenya Ltd when they instructed the law firm to file the case.
“It would be unfair and unjust to deny the applicant its right to its legal fees for work done,” Justice Dorah Chepkwony ruled.
The judge said an advocate who has been instructed to act for a client has a legitimate expectation that his or her fees will be paid by the client, whether or not the relationship is severed.
“Having been instructed in the said resolutions, it is my view that the applicant (the law firm) had no obligation to meticulously examine the 1st respondent’s (KiwiPay Kenya) internal structure to ascertain that the instructing directors had the capacity to do so,” the judge ruled.
Mr Schmidt, Ms Monthida Rashi from Laos and the three Kenyans have been fighting over the money since it was unfrozen by the High Court last September. The $19.4 million (about Sh2.6 billion) are being held at Ecobank.
Read: Fight for Sh2 billion haul at Ecobank intensifies
Lawyer Isaac Rene said he was instructed by the Kenyans to defend their shareholding and directorship in the company.
He said the Kenyans passed a resolution on December 15 instructing the law firm to move to court, after they were allegedly ousted as directors and shareholders of KiwiPay Kenya Ltd.
Mr Rene said the parties agreed on the fees and he was able to secure the billions from being carted away through a court order.
Mr Schmidt, who says he has a controlling stake in the company, opposed the case.
He said the financial status of KiwiPay Kenya Ltd had been crippled by the numerous court cases and interim orders issued blocking the release of the funds.
Mr Schmidt said the court order was obtained without disclosing all facts to the court, including the fact that the Kenyans relinquished their shareholding in the company and were paid.
Read: Frenchman blocks Kenyans from unfrozen Sh2.3bn at Ecobank
The Frenchman denied engaging the law firm for any legal services as there was no resolution by the company, or its board of directors, approving the filing of the case.
Mr Schmidt said the instructions were, therefore, issued by persons who are not officials or directors of the company.
He further protested that the amount was ‘inordinately high and unconscionable legal fees’.
According to the Frenchman, KiwiPay PTE initially held 51 percent of the Kenyan company, Ms Rashi 20 percent, while the Kenyans held 7.5 percent each. But they later resigned as directors leaving him and KiwiPay PTE ltd as the only shareholders.
Justice Chepkwony rejected affidavits filed by Mr Schmidt saying they were not accompanied by a certificate of notorisation, as required by law. The Frenchman swore the documents before a lawyer in Laos.
The judge said without such proof, the documents remain unauthenticated.
