Anglo Leasing Contracts: Law Society’s Case Against the Office of the Attorney General of Kenya

gado cartoon amicus corruptiae mortician AG Githu

“The man you see before you is the mortician. The patient died on the operating table a long time ago.” – The Hon. Attorney General, Prof. Githu Muigai, SC, on Anglo-Leasing cases.

Earlier this month, the Law Society of Kenya (LSK) went to the High Court of Kenya in the case of Law Society of Kenya v Cabinet Secretary Treasury & The Attorney General [2014] eKLR seeking conservatory orders restraining the Government of Kenya from making payments to Universal Satspace (North America) LLC pending hearing and determination of the LSK’s case against the Executive Branch. Many will recall that Universal Satspace is one of the entities involved in the now infamous Anglo Leasing Contracts under investigation by the Ethics and Anti-Corruption Commission (EACC). However, Majanja, J sitting in the High Court declined to grant the interim orders sought by LSK. In this ruling, the court defers to the Legislative Branch’s oversight authority over national revenue and expenditure.

Folks, there you have it: separation of powers at work!

This past week, the Executive Branch defended its decision to pay KES 1.4 Billion in one single payment to one single bank account to settle debts with respect to “security contracts” with two entities, Universal Satspace and First Mercantile Securities Corporation. The President, the Treasury and the AG have maintained that paying the colossal sum all at once was the only way the country could secure an urgently needed Euro bond or otherwise risk cutting back on government expenditure, service delivery and programmes for Kenyans.

In between time, LSK decided that it would take action against its members: P.105/1421/85, P.105/2913/95 and P.105/1434/85, also known as Prof. Githu Muigai, SC., Mr. Njee Muturi, the Solictor General and Ms. Muthoni Kimani, the Deputy Senior Solicitor General respectively. According to LSK, there are reasonable grounds to believe that the Muigai, Muturi and Kimani have acted in an unconstitutional, illegal and unprofessional manner and have conspired with the Executive Branch in dealing with the Anglo Leasing type contracts and in particular in the case between Universal Satspace and the Government of Kenya.

The following documents have been made public by LSK in support its case against the Office of the Attorney General:-

1. In a letter dated August 11, 2008, the Deputy Solicitor General Muthoni Kimani advised the Government’s Advocates’ not to advance the defence of bribery and corruption. LSK argues that Kimani did this despite reports by Kenya Anti-Corruption Commission (KACC), the Cabinet, Pricewaterhouse Coopers, Public Accounts Committee and the Auditor General to the effect that the contractual documents in the transaction were procured through corrupt practices and that Universal Satspace and First Mercantile had no permanent address. A copy of the letter is available here.

2. In further support of the point above, LSK has made public the request for Mutual Legal Assistance by KACC to the Swiss Federal Office of Justice and Police. In the request, KACC names 20 persons and companies under investigation. The request appears to conclude that the contracts were signed by corrupt Kenyan officials named in return for financial or other inducements. Earlier this year, the EACC confirmed in a letter to the Treasury and the Attorney General that it was still investigating the Anglo Leasing contracts. A copy of the request is available here. A copy of the EACC letter is available here.

3. LSK accuses the Attorney General of entering into an illegal consent in a case filed in Switzerland by First Mercantile Security Corporation. A copy of the judgment in the court of first instance in Geneva is available here.

4. LSK alleges that the government directed the Attorney General (vide Cabinet memo dated 30th September 2010) to engage foreign competent advocates with complex commercial litigation experience to defend the Anglo Leasing type contracts. In this connnection, LSK argues that the Attorney General acted contrary to these directions by frustrating Government lawyers. LSK further argues that the Attorney General appears to have withdrawn instructions in December 2013 from the foreign advocates and that his office unprocedurally took over the conduct of the case. In this connection, the Solicitor General Njee Muturi represented the country before a London Court in December 2013 without a licence to practice law in England and Wales. Therefore LSK argues that the Kenya Government effectively did not have legal representation in the suit and the proceedings are a nullity. A copy of letters sent in vain from government lawyers Edwin Coe, LLP is available here. A copy of the proceedings in the London court are available here.

5. LSK accuses the Office of the Attorney General of scaring the Government into make the Anglo Leasing payments by sending a letter informing Treasury of a threat of attachment of the Kenyan Embassy in Switzerland and the intended Sovereign Bond. A copy of this letter is available here.

6. LSK contends that during the meetings held on 28th March and 1st April 2014, the Office of Attorney General failed to advise the Government which led to the latter’s agreement to settle claims by First Mercantile Securities Corporation and Universal Satspace in one single payment by the end of the Month of April 2014. A copy of the Minutes of the meetings is available here. A copy of the Letters of Agreement between the Government of Kenya (signed by the Attorney General) and First Mercantile Securities Corporation and Universal Satspace is available here.

7. LSK accuses the Attorney General of giving a misleading legal opinion that the Government had no other legal option but to pay the Anglo Leasing contracts while an appeal option was and is still available. LSK argues that this failure by the Attorney General to pursue an available appeal was a dereliction of the AG’s constitutional mandate under Article 156 to protect and uphold the rule of law and defend public interest. A copy of the legal opinion is available here.

8. LSK contends that, on the strength of the Attorney General’s misleading opinion, the National Security Council directed the Cabinet Secretary for the National Treasury, the Cabinet Secretary for Foreign Affairs, the Cabinet Secretary for Defence and the Attorney General to devise a communication strategy for the undelivered Anglo Leasing contracts and Cost/Benefit Analysis of Anglo Leasing payments. These directions were communicated through a letter from the Secretary to the Cabinet. A copy of the letter is available here.

9. LSK further contends that, on the strength of the Attorney General’s misleading opinion, the Treasury wrote to the Director of Budget requesting the latter to grant credit to make the Anglo Leasing payments. In her response, the Director of Budget accepted the advice of the Attorney General but rightly requested Treasury to furnish proof of parliamentary approval to release funds from the Consolidated Fund. A copy of the letter from the Treasury is available here. A copy of the response from the Director of Budget is available here.

In view of the above, LSK has publicly stated that it intends to take the following action against the Attorney General, the Solicitor General and Senior Deputy Solicitor General for professional misconduct:-

(a) Ask them to Show Cause why a Certificate of Dishonour by LSK should not be issued to them.
(b) File suit to declare them unsuitable to hold office and surcharge them for any monies paid in the case.
(c) Strike off the Attorney General from the Roll of Senior Counsel.
(d) Ask the Hon Attorney General to vacate office by resigning pending further investigation in the matter.

In sum, the ball lies squarely in the court of the Attorney General’s Office to rebut the weighty allegations made against them by LSK. In a previous post here, we discussed the important role to be played by the then Attorney General nominee, Prof. Githu Muigai.

In the meantime, the Law Society remains one of the most powerful professional bodies in Kenya with its members serving as Heads of two Branches of Government, namely the Judiciary and the Legislature. In an earlier post here, we highlighted how LSK ‘disciplined’ the Speaker of National Assembly for acting contrary to the law in the MPs’ salaries case. Now it appears that LSK has turned its attention to the Executive Branch and in particular, its legal advisor, the Attorney General.

4 thoughts on “Anglo Leasing Contracts: Law Society’s Case Against the Office of the Attorney General of Kenya

  1. Pingback: IP Kenya Weekly Review (18th-25th May, 2014) | IP Kenya

  2. Very Insightful! Such a shame that the same people entrusted with safeguarding Kenya’s interests are the same people leaving us to hang . But what’s worse is the denial and potential protection of these corrupt individuals to the effect of no justice being served.

  3. I really hope this case leads to some concrete action and is not spent in court for the next 5 years by which time we, the public, will have forgotten just how much we paid for Anglo-Leasing

  4. I hope all this things you have writen here is totally TRUE!… I wanna join this society, So many people they been calling them selfs Freemason leader’s and they been telling people how great freemason’s society is, and even advising and telling people how you can join freemason society but when you meet with them or call them online, they tell you fast to pay for registration fee or membership fee…!!! Tell me who will i believe?…..

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