The High Court has been asked to lift an injunction blocking the auction of 14 Riverside building, where Nairobi’s Dusit D2 Hotel sits, to allow a creditor to auction the property and bring to an end a decade-long dispute.
Synergy Industrial Credit Ltd, which has been seeking to auction the property to recover more than Sh5.5 billion debt arising from a botched deal, accused Cape Holdings Ltd and I&M bank of filing endless applications in a bid to frustrate it from recovering the debt.
Through Senior Counsel Ahmednasir Abdullahi, Synergy Credit submitted that Cape Holdings had exhausted all available court forums in an effort to defeat the execution of a decree it obtained against it (Cape Holdings).
“The court must discharge that administration. All the issues the respondents (bank and Cape Holdings) are raising were determined by the court of appeal. This court must bring to an end the dispute once and for all,” Mr Abdullahi submitted before Justice Josephine Mong’are.
The lawyer said it was the second time the bank was appointing an administrator, and if not stopped, would continue with an “endless process”.
He submitted that the property had already been attached and an order prohibiting interference with the title of the property was registered on January 14, 2022.
Mr Abdullahi said the Court of Appeal considered the debenture being claimed by the lender and ruled that it was null and void and incapable of creating any priority rights in favour of I&M Bank.
“This court does not have jurisdiction to overturn the findings of the Court of Appeal and litigate over debentures which the appellate court already declared a sham,” he submitted.
In reply, the lender asked the court to review a judgement made in July, dismissing the appointment of an administrator, arguing that there are issues that were not litigated in the earlier case.
Through lawyer William Kabaiku, the lender said it has the right to claim over a portion of the property that was not encumbered.
The bank’s application was supported by Cape Holdings and the administrator appointed by the bank to manage the property.
According to Cape Holdings, Synergy Industrial Credit had an interest in “Wing A” on the ground floor, first, second, third, fourth, fifth, and sixth floors and on “Wing B” on the ground floor, first, second, third, fourth, fifth and sixth floors.
At the same time, Cape Holdings asked the court to direct the administrator to appoint real estate firm, Knight Frank to value the property and sell it by public auction or private treaty, and the proceeds be deposited in an escrow account, pending resolution of the dispute.
The dispute arose when Cape Holdings developed the property and, in an agreement, Synergy Industrial Credit Ltd sought to purchase some blocks in the complex.
Synergy Industrial Credit then paid Sh750 million, but the parties fell out and the matter was referred to an arbitrator who directed Cape Holdings to pay Sh1.6 billion plus interest in 2015, an amount that has been rising and now stands at more than Sh5.5 billion.
