Legal battles as South Sudan deals go sour

Kenya has become a battleground for firms reeling from business deals gone bad with South Sudan.

Increasing court cases involving the South Sudan government have exposed difficulties in doing business with Juba as several firms keep claiming losses stemming from valid contracts.

Stanbic Bank is currently fighting a Sh1.4 billion claim from Nairobi-registered Air Afrik Aviation Limited, which has accused the lender of dishonest banking.

This spat is also under probe by the Central Bank of Kenya, following a complaint by Air Afrik Aviation Limited.

In its suit, Air Afrik claims Stanbic has given two contradicting stories to justify an allegedly illegal reversal of Sh720 million that the flight operator received from South Sudan as payment for a tender.

Air Afrik has now accused Stanbic of producing fraudulent entries in its bank statements. The two entries on May 30, 2016 were made to show that Air Afrik wired the Sh720 million in dispute back to South Sudan.

The flight operator expected the money as payment from South Sudan for charter services to Juba’s Defence and Veteran Affairs ministry.

The flight operator says Stanbic first blamed the reversal on an attachment order against South Sudan’s bank accounts in Kenya, before arguing that the Sh720 million had been remitted in error.

Air Afrik holds that Stanbic’s story changed after a threat to sue, which the flight operator now insists is evidence of dishonest banking.