The Court of Appeal has declined an application that sought to stop the auction of an edible oil processing factory owned by Convex Commercial Logistics Limited in a bid to recover a Sh2 billion debt to Stanbic Bank.
The Court on Tuesday dismissed a request by Convex Commercial Logistics Limited to suspend execution of a July 2025 High Court ruling that authorised the bank to recover its debt through sale of the Athi River-based facility, years after the owner ran into financial problems due to the Covid-19 outbreak.
The row stems from a Sh1.5 billion loan advanced in December 2020 for construction of the edible oil refinery within the Export Processing Zone (EPZ) in Machakos County.
Convex, previously deriving 30 percent of its revenue from edible oil trading, had sought to move into processing the commodity.
Company owner James Waithaka attributed the project's collapse to the Covid-19 pandemic-related disruptions that forced construction delays and financial strain.
Court documents reveal the firm diverted funds from its core trading operations to keep the project afloat after experiencing loan disbursement delays.
The bank initiated recovery measures in June 2023 through Garam Investments Auctioneers, citing outstanding debts totaling Sh2 billion and $15,795. Convex's attempts to secure a one-year moratorium have been rejected by both the High Court and the Court of Appeal.
Justice Francis Mabeya's July 2025 ruling found the company's application "lacked merit." The appellate judges yesterday dismissed a plea to suspend execution of the High Court ruling, noting Convex failed to seek proper injunctive relief or demonstrate the auctioneer's inability to compensate should their appeal succeed.
Justices Wanjiru Karanja, Kathurima M’Inoti, and Weldon Korir also noted that there was no dispute on the actual debt amount.
"The main contention regarding property valuation is properly a matter for damages, not stay of execution," the bench observed in its unanimous decision.
The manufacturer, and its affiliate Convex Commodity Merchant Ltd and Waithaka, wanted the Court of Appeal to suspend the auction pending the determination of an intended appeal against the High Court ruling.
However, the judges rejected the application, ruling that they could not grant a stay of a ruling where the High Court had dismissed a case.
This is because in such circumstances, there is nothing to stay in a negative order that does not direct the applicant to do or refrain from doing something.
The judges also observed that the company did not apply for an injunction against the sale but only sought a stay of the High Court ruling.
“Before we are called upon to consider whether the applicants’ intended appeal is arguable and risks being rendered nugatory if it were to succeed, we must first be satisfied that we have before us a competent application in which we can validly issue orders of stay of execution as prayed by the applicants. There is no such application before us,” said the judges.
The auction was announced on September 1, 2025, in the Daily Nation newspaper by Garam Investments Auctioneers, acting on behalf of the bank.
The bench stated that in the absence of a plea for an injunction, there was no basis on which the court could issue an order of stay of execution of the negative ruling.
“But even if we were minded to consider the merits of this application, we still would not grant it because the applicant does not allege that the first respondent (Garam Investments) is impecunious or incapable of compensating it should the intended appeal succeed,” said the judges.
“Also, as found by the High Court, the debt in issue is not disputed, the main issue raised by the applicants being the valuation of the suit properties, which is really an issue for damages should the appeal succeed”.
Garam Investments has scheduled the plant's auction as advertised in the Daily Nation on September 1, 2025. The modern facility includes specialized processing machinery and occupies prime EPZ land.
The case highlights ongoing financial fallout from pandemic-era projects and comes as Kenya seeks to reduce edible oil imports, currently satisfying only 35 percent of domestic demand through local production.
