The Court of Appeal has stopped the planned auction of a multi-billion property in Nairobi’s Riverside Drive where the famous Dusit D2 hotel stands.
The property had been advertised for sale early this month, over a debt of Sh5 billion.
A bench of three judges put on hold the sale of the building Wednesday following an application by I&M Bank and an administrator appointed by the lender, saying the owners of the building owe them $25 million (Sh2.82 billion).
The Court of Appeal has stopped the planned auction of a multi-billion-shilling property in Nairobi’s Riverside Drive where the Dusit D2 hotel stands.
Justices Daniel Musinga, Wanjiru Karanja and Agnes Murgor put on hold the auction pending a ruling on March 18.
The property had been advertised for sale early this month over a debt of Sh5 billion after the High Court dismissed a case blocking the intended sale and which was filed by I&M Bank and an administrator appointed by the lender.
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.
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).
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.
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 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.
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