The Supreme Court has started hearing a petition on whether the owners of the six luxury office blocks should pay Sh1.6 billion to its former partner, Synergy Industrial Credit Limited, for breach of contract and lost business after the collapse of the joint venture.
Synergy had paid Sh577 million for a stake in 14 Riverside before terminating the partnership, accusing the owners under a vehicle known as Cape Holdings of diverting the funds and slowing construction.
It successfully petitioned the High Court to pursue fraud allegations against the owners and won Sh1.6 billion compensation that Cape Holdings blocked at the Appeals Court.
A Sh577 million fraud suit linked to the development of the multibillion-shilling exclusive office block, 14 Riverside, has moved to the Supreme Court, adding a new twist to the eight-year row.
The top court has started hearing a petition on whether the owners of the six luxury office blocks should pay Sh1.6 billion to its former partner, Synergy Industrial Credit Limited, for breach of contract and lost business after the collapse of the joint venture.
Synergy had paid Sh577 million for a stake in 14 Riverside before terminating the partnership, accusing the owners under a vehicle known as Cape Holdings of diverting the funds and slowing construction.
It successfully petitioned the High Court to pursue fraud allegations against the owners and won Sh1.6 billion compensation that Cape Holdings blocked at the Appeals Court.
Now, Synergy has moved to the Supreme Court to overturn the Appeals Court ruling and push for a refund of the Sh577million, interest and lost business for nine years.
The commercial complex, opened in 2012 and owned by the Sanghrajka family, proprietors of Tile & Carpet Centre, comprises office blocks with retail spaces on the ground floor, a parking silo and a 100-room hotel on the ground floor.
The family through property management Knight Frank has in recent weeks defended 14 Riverside against accusation that it was built on riparian land and that sections of it are due for demolitions.
A multi-agency team carrying out the demolitions of structures on riparian land in Nairobi said a section of the property was built on land adjacent to a river.
Before the Supreme Court action, Synergy had won a High Court fight seeking investigation of Cape Holdings for obtaining money through false pretense.
Cape Holdings wanted the court to dismiss the complaints raised by Synergy claiming the money it purportedly obtained by false pretenses was paid under an agreement, and maintained the row was civil.
The Sanghrajka family in 2011 entered a Sh700m deal with Synergy for development 14 Riverside.
Synergy paid Sh577 million in exchange for one of the office blocks, but later walked out of the deal six months later citing breach of contracts and diversion of funds, prompting the dispute to be referred for arbitration.
The arbitration was led by commercial lawyer Ochieng Oduol who found Cape Holdings at fault, and awarded Synergy Sh1.6 billion.
Cape Holdings has opposed refunding the Sh570 million and arbiter compensation, prompting Supreme Court suit.
The office of the DPP and Synergy got High Court order asking police to investigate Cape Holdings accounts at I&M bank.
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