National Bank of Kenya (NBK) branch. FILE PHOTO | NMG National Bank of Kenya (NBK) has been ordered to pay Ecobank over half-a billion shillings for a botched financing deals linked to the supply of digital driving licences.
Justice Grace Nzioka ruled that NBK had to pay Sh549.3 million based on an agreement signed three years ago, which compelled the lender to pay Ecobank on account of a firm that had been subcontracted to supply the digital driving licences.
Under the deal, NBK had committed to pay Ecobank within 150 days after inking the licence deal for a loan the lender had offered Pesa Print, to kick-start production of the second generation smart card driving licenses.
NBK has secured the Sh2.3 billion deal from National Transport and Safety Authority (NTSA) for the smart card driving licences, but the lender subcontracted Pesa Print for the job.
Justice Nzioka found NBK had breached terms of the financing deal after it failed to wire payments due to Pesa Print directly to Ecobank to settle a $3.5 million loan offered to the subcontractor.
NBK said payment to Ecobank was based on it receiving payment from NTSA for the contract, arguing that the transport regulator had delayed settling the bill.
“It is crystal clear that, the payment to the Plaintiff (Ecobank) by the Defendant (NBK) was based on ‘receipt and stamping of tax invoice number 00229’ and not on receipt of payment from NTSA. The period of payment is clear,” the Judge said.
NBK maintained that it could only pay the money after receiving funds from NTSA.
Court documents showed that Pesa Print assigned all dues under the contract to Ecobank and in November 2017, the sub-contractor notified the lender that it had to pay all proceeds under invoice 00229 to Ecobank. The letter was acknowledged on November 27, 2017 and the lender undertook to settle the amount within 150 days.
After the lapse of the 150 days, Ecobank demanded payment twice in April and June 2018 but NBK requested for an extension by another 150 days. The requested was allowed but after the lapse, NBK said it was yet to get funds from NTSA.
The parties later entered into negotiations but Ecobank moved to court accusing NBK of trying to vary the terms of the assignment, by alleging that payment was subject to receipt of funds from NTSA.NBK remained categorical that payment was subject to receipt of the funds. The parties held meetings […]
