A Ksh. 220 million case against influential businessman Julius Mwale was dismissed in a New York federal court on May 23, 2025. The voluntary dismissal by the plaintiffs, Mathew Shaw and Brooke Shaw, came 11 days after another United States District Court in Utah closed the same case and transferred it to the US federal court in the Southern District of New York.

“Accordingly, the motion to dismiss for Lack of personal jurisdiction, or in the Alternative to Transfer Venue to the Southern District of New York is Granted in Part,” Ruled the United States District Judge Ann Marie McIff Allen on May 12, 2025.

The plaintiffs had initially filed the case in July 2024 in the US District Court in Utah against Julius Mwale and his wife Kaila Mwale, alleging that they lent Mr. Mwale money in 2022 as a loan towards his projects in the Democratic Republic of Congo. They also claimed misrepresentations about some aspects of the US $2 billion Mwale Medical and Technology City (MMTC) project in Kenya during the loan presentation.

However, in a spirited defense by Mwale’s lawyers, Jennifer Tomchak and Nicole Skolout, he successfully argued to have the case transferred from Utah to the Southern District of New York. “As to transferring the venue, Defendants (Mwales) claim this case involves an operative agreement with plaintiffs that mandates the Southern District of New York as the ‘exclusive venue’ for litigation,” Judge Allen stated in the May 12, 2025 ruling. “The defendants ask the Court to transfer the case pursuant to 28 U.S.C. 1404 (a),” she said.

In a reply to Mwale’s motion, the plaintiffs Mathew and Brooke Shaw, agreed with Mwale’s filing that a contract existed in support of his pleadings that New York was the exclusive venue for contract disputes. The court accordingly closed the case and transferred it to the Southern District of New York.

“In Plaintiffs ‘ Memorandum in opposition they indicate they ‘consent to transferring venue for this case to Southern district of New York’,” the Judge wrote. The ruling indicated that the plaintiffs had consented to the transfer, acknowledging that the Southern District of New York was the appropriate venue. Eleven days after the judge closed the case in Utah and moved it to New York, the plaintiffs then voluntarily moved to dismiss the case from the Southern District of New York.

Reached for comment about the swift turn of events, Mr. Mwale’s representative said that “Mwale is glad that Justice has been rendered and served, as they knew the case was frivolous and malicious from the beginning, because claims in the case had been fully settled by both parties with independent counsel more than a year prior to malicious court filing and publication by the plaintiffs.” He added that the lawyers are studying the court events for the next cause of action.

This assertion was supported by court documents in Federal court in Utah where Mwale’s lawyers filed the contract and settlement agreements, which were negotiated by experienced counsel on both sides.

The court documents show that the plaintiffs had initially shared a draft lawsuit with the Mwales on April 10, 2023, threatening to file the suit that Mr. Mwale called frivolous. “Subsequently on April 27th and 28th, 2023, the Shaws and the Mwales resolved their disputes by entering the loan modification agreement and Release agreement, which was negotiated by experienced counsel on both sides,” wrote Nicole Skolout, Mr. Mwale’s attorney, in the court filing in Utah.

“The release agreement provides that ‘the Shaws release and forever discharge the Mwales, individually and collectively, from any and all claims as defined in this agreement’,” Nicole Skolout wrote in response to Shaws’ claims in Utah court in November 2024. “The release agreement further states that the parties agree that they will not ‘file any future charge or complaint nor institute any legal action or proceedings at law or in equity related to claims released in this release agreement, and that if any such charge or complaint is filed by a party, ‘that party hereby waives any right to any monies herein or damages from such action or proceeding’,” Nicole Skolout wrote.

Notable Connections:

The case also gave insight into Mr. Mwale’s extensive business dealings and associations in the USA. It highlighted his connections with prominent American business figures and politicians. The declarations filed in court show that Elon Musk’s Tesla partnered for the multi-million dollar MMTC solar power plant in Butere, which runs on Tesla batteries. Documents also indicated that Mr. Mwale had connections with former US Ambassador to Kenya Meg Whitman, former US Senator and presidential candidate Mitt Romney, musician Akon, and many US corporate CEOs.

As the lawsuit continued in the US since July 2024, MMTC continued to host hundreds of investors in Kenya who committed to billions in deals at the FESTAC business conference held in September 2024 at MMTC in Butere.

The city held the second MMTC Marathon event in January 2025 which attracted thousands of athletes and participants. The event also raised money for SHA healthcare premiums for low income households in Kenya to be treated at Hamptons Hospital. In March, the city held the second MMTC health walk and launched the expansion of Hamptons Hospital to Suriname, South America. In early May, the MMTC team was part of the Milken conference in Los Angeles, USA, where they struck deals with investors and partners in the Smart Cities expansion.

MMTC is a US $2 billion community-owned sustainable metropolis, anchored by Hamptons Hospital in Butere Sub County, Kakamega County. The city in Kenya is operational and complete and has a vision to expand in 12 countries and build 18 smart cities by 2050.

The lawsuit’s voluntary dismissal is seen as further evidence of MMTC’s success in expanding its vision despite challenges.

“Pursuant to Rule 41 (a)(1)(A ) of the Federal Rules of Civil procedure, Plaintiffs Mathew Shaw and Brooke Shaw, by their undersigned attorneys, hereby give notice that the above captioned action is voluntarily dismissed without prejudice against defendants Julius Mwale and Kaila Mwale,” read the notice of voluntary dismissal at the United States District Court in the Southern District of New York on May 23, 2025.