The High Court has cleared the way for the East African Development Bank (EADB) to auction three properties in Karen linked to former Cabinet Secretary Raphael Tuju, to recover a Sh1.9 billion loan advanced to his company Dari Limited a decade ago.
The court dismissed a suit filed by Dari and Mr Tuju alleging that the auction was unlawful because it was carried out in violation of interim court orders and while they were contesting the legality and enforcement of the loan facility agreement used to secure the debt.
They wanted the court to halt the sale and transfer of the properties to the purchaser, but the court rejected the application, struck out the case and lifted interim orders that had temporarily blocked the auction.
In their application filed on October 25, 2024, Dari and Mr Tuju sought injunctions to stop the auction or transfer of two Karen properties —Entim Sidai Wellness Sanctuary (L.R. No. 11320/3) and Tamarind Karen and Dari Business Park (L.R. No. 1055/165) — which were used as collateral for the loan.
Entim Sidai, a recreational resort owned by Mr Tuju.
Photo credit: Pool
They also requested the revocation of any transfer already registered over Tamarind Karen and Dari Business Park and punitive action against bank officials, valuers, and auctioneers for alleged contempt of earlier court orders.
Additionally, they sought to join the Chief Land Registrar in the case to prevent ownership changes pending the dispute.
However, the court ruled the suit an abuse of process, stating it revisited issues already settled by multiple courts.
"The plaintiffs are essentially asking the court to re-hear an injunction already denied, re-open a debt adjudicated internationally and recognised domestically, and re-litigate the enforceability of security over properties subject to multiple court orders," the court said.
It upheld the bank’s application to strike out the case, finding the claims previously adjudicated.
The dispute stems from a multimillion-dollar loan advanced to Dari Limited under a facility agreement signed on April 10, 2015.
In 2019, a United Kingdom commercial court issued a summary judgment ordering repayment of $15,162,320.95 (Sh1.95 billion at the current exchange), later recognised by Kenyan courts, enabling the bank to pursue recovery.
Subsequent appeals at Kenya’s Court of Appeal and Supreme Court failed, solidifying the lender’s right to enforce the security.
The court noted that an identical injunction request had already been dismissed, with prior rulings finding no strong case and favouring the lender’s position.
Delay tactics
Re-filing the same request, it said, amounted to re-litigation. The court also dismissed constitutional challenges as delay tactics, refusing to revisit issues settled in Kenya and the UK.
Consequently, the amended plaint and injunction application were struck out with costs, and interim orders blocking the sale were lifted, freeing the bank to proceed with recovery.
The case is part of a protracted dispute between EADB and Tuju-linked companies over the loan repayment.
Court records show the properties were pledged as security and later became enforcement targets, with prior proceedings involving receivership disputes and alleged violations of court orders granting access.
