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Passenger and cargo carrier Air Afrik has gotten a reprieve after the High court allowed its request to amend a case where it is seeking over Sh 1.74 billion compensation from the Stanbic bank. In a ruling delivered by Justice David Majanja (pictured) the court granted the carrier more time to amend its suit papers seeking damages over alleged breach of banking regulations by the lender. 

Air Afrik is seeking to substitute the claims from the initial $14.4 million (Sh1.74 billion) for losses suffered after the South Sudan government terminated a $20 million (Sh2.41 billion) plane leasing contract due to cash hitch.

In his decision Justice Majanja said the bank would not suffer any prejudice if the carrier were allowed to amend the compensation claim.

Air Afrik sued Stanbic in 2018 over an alleged breach of banking regulations after crediting $7.2 million into its accounts before freezing and reversing the money without a valid court order or a directive from the Central Bank of Kenya (CBK).

Froze the money

But in its response to the suit the lender said that it froze the money and reversed the transactions after realising that the credit note from the South Sudan government did not have funds and the bank could not use its own funds.

Stanbic and the South Sudan government are pursuing an out-of-court settlement in a suit that exposes the Nairobi bourse-listed lender to a multi-billion shilling compensation.

“While I agree with the 1st defendant that there has been a delay in seeking the amendment given the information was in the plaintiff’s possession, I think the proposed amendment, in substance, does not change the cause of action but expands the scope of damages pleaded,” ruled justice Majanja.

The bank opposed the upward review of the compensation, saying it was brought in bad faith with the intention of muddling up the issues before court. Stanbic said the amendment introduces a new dimension to the case and is at risk of delaying the conclusion of the suit.

Air Afrik, which has offices in Kenya and South Sudan, claims that Stanbic, which also has operations in the two countries, breached banking regulations by failing to act diligently before crediting funds, freezing its accounts.