BY SAM ALFAN.
Troubled Charterhouse Bank has applied for the disqualification of top law firm, Oraro and Company advocates, as it contests liquidation.
The controversial financial institution claims it has no liquidity problems to justify intervention by the Central Bank of Kenya (CBK).
The beleaguered lender has protested it stands to suffer prejudice and irreparable damage in case Oraro and Company Advocates continues representing CBK in the liquidation dispute.
Senior Counsel Paul Muite and lawyer Martin Gitonga told a three-Judge High Court bench there existed an Advocate-Client relationship between Charterhouse Bank and Oraro and Company Advocates between 2007 and 2012.
They asserted that the law firm was privy to confidential and privileged information relating to the bank’s operations that are subject of the liquidation dispute.
The court heard that Senior Counsel George Oraro represented CBK in all matters touching on the statutory management and purported liquidation of Charterhouse Bank.
On instructions from CBK, Oraro reportedly drafted a restructuring agreement dated August 31, 2009 between CBK and Charterhouse Bank.
Muite and Gitonga said the circumstances and implementation of the contentious agreement is at the core of the dispute that is pending adjudication.
One of the bank’s directors, Manoj Shah, said there was real and imminent conflict of interest for Oraro to act for CBK when it is accused of failure to discharge it’s obligations under the restructuring agreement. The main prayer by Charterhouse Bank seeks an order for specific performance to compel CBK to facilitate the restructuring.
Muite and Gitonga said Oraro was a key player in the negotiations between the two parties and was likely to use the dossier to the detriment of Charterhouse Bank.
“It is unconscionable for the firm of Oraro and Company Advocates to purport to act for CBK in the present suit in which Charterhouse Bank and it’s directors challenge the exercise of statutory power by the CBK while there was a clear Advocate -Client relationship between Charterhouse Bank and Oraro during the statutory management of Charterhouse Bank,” Muite said.
Justices Chacha Mwita, Hedwig Ong’udi and Lawrence Mugambi reserved their ruling until September 24.
