Kenya: Banks, Saccos Ordered to Unfreeze Dairy Farmers Accounts

30 October 2021

Six financial institutions were yesterday ordered by the High Court to unfreeze bank accounts belonging to 130, 000 Murang'a dairy farmers that had been frozen on the advice of the Cooperatives Commissioner.

According to court submissions, by the time KCB, Equity and Cooperative banks as well as Amica, Unaitas and Mentor Saccos simultaneously took the action, the accounts had Sh148,823,809.89.

Senator Irungu Kang'ata, who was the lawyer for the farmers, said the amount should be treated as credit arbitrarily procured from them by the six institutions hence attracting damages and interest that the court should determine.

In his ruling, Justice Kanyi Kimondo said the act of freezing the accounts has negatively impacted the operations of the farmers in the past two months.

"To fully appreciate the matter, none of the financial institutions has disclosed a dispute between it and the plaintiffs... if the conduct of the commissioner is finally impeached, there will be no contractual or legal foundation for the freeze orders," Justice Kimondo noted in his ruling.

This was after the farmers who belong to five dairy societies - Kiarutara, Kangari, New Nginda, Kigoro and Kahuro - got into a contractual tiff with Murang'a County Creameries (MCC) that ended in court with the financial institutions being listed among the defendants.

In their suit, the five dairy societies blamed the financial institutions for breach of their fiduciary duties and bank-customer relationships and acting as if they were subsidiaries of the county government, MCC and Commissioner of Cooperatives.

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