Equity Bank has lost a bid for compensation of Sh23.4 million from security firm Wells Fargo, following the theft of Sh47 million during a cash-in-transit operation in Moyale five years ago.
Justice Fridah Mugambi said that the security and courier firm was not liable for the money heist that occurred on September 11, 2019, at Odda Airstrip in Moyale, Marsabit County.
This is because the bank failed to prove allegations of negligence against the company in the handling of the consignment. She said the theft was a case of robbery.
“The theft did not occur due to a failure by Wells Fargo to perform its contractual obligations, but rather due to a breakdown in coordination on the part of the bank. Specifically, the bank failed to deploy its security team to the airstrip in good time, contrary to the established operational procedure between the parties,” said the judge.
The bank had engaged the company to airlift Sh60 million from Nairobi to Odda Airstrip, where the consignment was expected to be picked up by the bank’s security team.
Upon arrival at the airstrip, Sh47 million was stolen from the aircraft by armed robbers, allegedly due to the negligent conduct of Wells Fargo’s agents or employees.
The bank claimed that the loss occurred while the money was in Wells Fargo’s custody. It claimed the company failed to exercise reasonable care and diligence, breached its duty to provide adequate security and failed to ensure proper delivery of the funds.
It sued seeking judgment against Wells Fargo for special damages amounting to Sh23.4 million, constituting a sum of Sh22.5 million being the amount the bank’s insurer, Britam General Insurance Company, had indemnified and an additional Sh900,000 being storage fees.
The court said the cause of loss was an armed robbery that occurred in the absence of the bank’s security.
However, Justice Mugambi found that it was the responsibility of the bank to ensure its personnel, together with armed security, were present at the airstrip 20 to 30 minutes before the aircraft’s arrival.
On this particular day, the court heard from witnesses that the cash consignment left Nairobi as scheduled but was stolen upon arrival in Moyale, while the aircraft remained on the tarmac awaiting reception.
“The evidence of three witnesses confirms that no reception team from the bank was present at the airstrip at the time of landing. A witness, who was aboard the aircraft, testified that he was unarmed and that it was not within his mandate to provide security for the consignment. He remained in the aircraft upon landing and attempted to contact the Bank’s security team, during which the armed robbery occurred,” said the judge.
She found that the bank failed to deploy its security team to the airstrip in good time, contrary to the established operational procedure between the parties.
The court heard that both the bank and the security firm had a written agreement and a standard procedure for cash movements to Moyale.
Upon arrival in Moyale, the cash officer and pilot used to be met by the bank’s security team before disembarking or handing over the consignment.
“This operational protocol clearly delineated responsibility: Wells Fargo's role ended with safe air delivery at the departure point, while the Bank assumed responsibility for reception at the destination airstrip,” said the judge.
Wells Fargo had no operational presence in Moyale and, therefore, could not provide on-ground security at the destination.
“The facts do not permit an inference of negligence against Wells Fargo. The burden lay on the bank to prove, on a balance of probabilities, that Wells Fargo was negligent. That burden was not discharged,” the court ruled.
