Former Cabinet Secretary Raphael Tuju has returned to court seeking to stop the auction and transfer of his three Karen properties after the High Court allowed lenders to enforce recovery of a Sh1.9 billion debt.
Through a fresh application, Mr Tuju and his company Dari Limited want the High Court to suspend enforcement of the ruling delivered on March 9, as they escalate the dispute to the Court of Appeal.
The contested ruling struck out their amended suit and lifted interim orders that had temporarily barred the East African Development Bank and auctioneers from selling the disputed properties. The properties include Entim Sidai Wellness Sanctuary, Tamarind Karen and Dari Business Park, assets used as collateral for a multimillion-dollar facility advanced to Dari Limited in 2015.
In court papers filed in Nairobi on Thursday, Mr Tuju says he is dissatisfied with the High Court ruling and argues the intended appeal raises substantial legal questions over how the trial judge handled the pleadings and competing applications before the court.
“It would be prejudicial to the applicants in the event the defendant proceeds to sell, auction, transfer, and alienate the suit properties on the basis of impugned and irregular valuations,” his advocate argues in the pleadings.
He says that unless the court intervenes urgently, the lenders will proceed with auctioning, transferring, and alienating the Karen properties despite an intended appeal, now pending before the court.
The application follows a ruling that dismissed the suit as an abuse of court process and cleared the regional lender to enforce its securities against the borrowers involved.
The court found the dispute had already been litigated in several courts, including proceedings recognising a United Kingdom commercial court judgment against Dari Limited.
That judgment ordered repayment of more than $15 million owed to the East African Development Bank under a facility agreement signed in April 2015 by the borrower.
The High Court in Kenya later recognised the foreign judgment, allowing the regional lender to pursue enforcement against properties pledged as security for the debt owed by Dari Limited and associates.
But Mr Tuju insists the latest ruling overlooked issues raised in the amended pleadings, particularly questions surrounding property valuations prepared by the lenders' valuers and related transactions contested.
He argues the court should grant leave to appeal and issue an order suspending execution to preserve the properties pending the determination of the intended appeal.
In the filing, Mr Tuju warns that failure to halt the sale could render the appeal pointless, because the properties might change hands before the Court of Appeal bench considers the dispute fully.
“The applicants are dissatisfied with the decision of the learned judge and intend to file a notice of appeal,” his advocate states.
He also warns that respondents are already free to proceed with auction, transfer and alienation of the Karen properties, unless the court urgently intervenes to stop enforcement actions.
Court records show the case has generated multiple suits and appeals, as the bank moves to recover the long-outstanding loan from Tuju-linked companies and guarantors.
Earlier proceedings also involved disputes over receivership and alleged contempt of court orders related to access and management of the Karen properties owned by Dari Limited previously.
If the stay request fails, the lender could remain free to complete the auction and transfers as it pursues recovery of the debt through secured assets pledged. The application is pending determination.
