The High Court has stopped the planned auction of a property at Nairobi’s iconic 14 Riverside Drive complex after ruling that the process leading to the proposed sale was defective and invalid.
Justice Moses Ado ruled in favour of Cape Holdings, setting aside the warrants and auction notices that had paved the way for the property to be sold. The court also dismissed an objection by Synergy Industrial Credit Limited challenging its jurisdiction and ordered allegations made by Synergy against the court to be expunged from the record.
The decision means that any future attempt to dispose of the property through an auction will have to begin afresh and comply with directions issued by the court. The reserve price for any new sale will also have to be determined by the court.
The ruling is the latest development in a long-running commercial dispute between Synergy Industrial Credit and Cape Holdings stemming from a property transaction dating back to 2010.
At the centre of the dispute is a deposit of approximately Sh577 million paid towards the purchase of an office block within the Riverside development. The transaction later collapsed, with Synergy seeking a refund of the money and alleging that delays in the development had frustrated the deal.
Cape Holdings disputed the allegations, arguing that some of the delays were attributable to design changes requested by the buyer. The disagreement subsequently escalated into court proceedings, eventually leading to efforts to realise the property through an auction. Cape Holdings challenged the proposed auction, arguing that the process had not been conducted in accordance with the law.
In his ruling, Justice Ado found the process defective and invalid and consequently set aside the warrants and auction notices. The decision effectively blocks the planned auction under the notices that had already been issued, giving Cape Holdings temporary relief from the attempted sale.
