The High Court in Nairobi has ruled that Ecobank Kenya must pay Sh284 million to the estate of the late Mbiyu Koinange. The court found that the bank allowed illegal withdrawals from a court-protected account without authorization.
Justice Eric Ogolla delivered the judgment on July 1, 2025. He ruled that Ecobank acted negligently and violated a standing court order from 2011.
A 42-Year Succession Battle
Mbiyu Koinange, once a powerful Cabinet minister, died in 1981. His estate, now valued at over Sh30 billion, has faced decades of legal disputes.
In 2011, Justice David Maraga (later Chief Justice) ordered Ecobank to hold Sh284 million in trust. The money came from the sale of Closeburn Estate in Runda, which fetched Sh1.16 billion. The order barred the bank from releasing funds without court approval.
Despite the order, the money vanished in June 2014. The bank allowed its withdrawal without informing the court or the estate administrators.
Court Holds Ecobank Responsible
The bank claimed it had not been served with the court order. But Justice Ogolla dismissed that defense. He said the bank had constructive knowledge of the estate’s legal status. The account was labeled as belonging to a deceased person’s estate.
“A transaction of Sh284 million is not ordinary,” the judge said. “Such a withdrawal should have triggered red flags internally.”
He added that Ecobank failed in its fiduciary duty. The bank did not seek court directions before releasing the funds. The withdrawals violated both the court order and basic banking safeguards.
Family Fights for Justice
Koinange’s widow, Eddah Wanjiru Mbiyu, led the legal challenge. Her lawyers, led by Senior Counsel Paul Muite, argued that the bank enabled unauthorized access to estate funds.
She said the family only discovered the money was missing in 2020. That was after the court finally approved distribution of the estate to 12 beneficiaries. By then, the account was empty.
The court sided with the widow and her co-administrators. Justice Ogolla ruled that Ecobank must refund the full amount plus interest.
Ecobank’s Explanation Rejected
The bank defended itself by pointing to instructions from account signatories. Its manager, Violet Monari, told the court that the last withdrawal was Sh540,000 on June 11, 2014.
However, the court noted that the account belonged to a court-supervised estate. This meant any withdrawal needed court approval—regardless of who signed the form.
Justice Ogolla said the bank should have alerted the court or refused the transaction altogether. He added that allowing the withdrawal without checks amounted to negligence.
What This Means for Banks and Estates
The ruling sets a strong precedent. Kenyan banks must now handle estate accounts with greater caution. If a court order protects funds, banks must comply fully—even without formal notice.
It also reinforces fiduciary responsibility. A bank managing funds for a deceased person must act with care, especially when court orders are involved.
Lawyers say the case may spark better compliance. Financial institutions will likely tighten their estate-account policies to avoid similar lawsuits.
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End of a Painful Chapter
The Koinange estate has faced legal battles for more than four decades. The succession dispute has involved multiple courts, judges, and heirs.
This ruling brings some relief to the family. For Eddah Wanjiru and her co-beneficiaries, the verdict closes a painful gap left by the missing Sh284 million.
For Ecobank, it’s a costly lesson. The bank now has to refund the full amount, with interest, to the rightful heirs.
Looking Ahead
The court’s decision shows that no one is above the law. It also confirms that financial institutions must follow due process—especially in matters involving deceased estates.
Legal experts believe this case could shape future banking standards in Kenya. Estate administrators now have a clear precedent to rely on when banks fail to protect estate funds.
As more families face succession issues, this ruling may offer hope and guidance. The law, though slow, has once again upheld justice.
