14 Riverside Drive/ Citizen Digital
NAIROBI, Kenya Jan 27-The Appellate Court has halted the planned auction of a multi-billion-shilling property in Nairobi’s Riverside Drive where the Dusit D2 hotel stands over a Sh5 billion debt.
Justices Daniel Musinga, Wanjiru Karanja and Agnes Murgor put on hold the auction pending a ruling on March 18.
The property was advertised for sale early this month after the High Court dismissed a case blocking the intended sale, which was filed by I&M Bank and an administrator appointed by the lender.
Moran Auctioneers put up the property for sale after Cape Holdings lost an 11-year-old court battle with Synergy Industrial Credit which is demanding Sh4.2 billion plus interest after a botched sale deal.
The bench of three judges has now put on hold the sale, pending a ruling on an application filed by the lender. I&M had argued that the owners of the building –Cape Holdings— owes it a debt of $25 million (Sh2.83 billion).
The bank challenged the sale saying it had appointed Vruti Shantilal Shah as the administrator of the property with a view to recovering its debt and the sale would jeopardise its plans to recover Sh2.83 billion.
In December, Justice Alfred Mabeya dismissed the bank’s application saying the lender would not suffer prejudice because it has other securities, whereas stopping the sale would subject Synergy to irreparable loss since its bid to recover the money would be delayed.
“The court has considered the foregoing and the fact that it has not been shown that the amount to be realized from the sale of the suit property would not be enough to offset both the decretal amount and a substantial amount part thereof remain for the bank,” Justice Mabeya said.
The lender and the administrator then moved to the Court of Appeal and convinced the court to stop the auction, pending the hearing of its appeal.
According to the lender, the court should determine who between a debenture holder (I&M) and a decree holder (Synergy) has the first priority over the attached property.
The property known as 14 Riverside Drive near University of Nairobi’s Chiromo Campus sits on a 5.2-acre land and comprises five office blocks, a five-star hotel (Dusit D2) with a swimming pool, a parking silo, food court and cafeteria.
Nairobi’s 14 Riverside Drive has been embroiled in a dispute with Synergy since 2010 over a botched sale deal.