Co-op Bank sues Mtwapa landlord to stop eviction

Co-op Bank banking hall
A Co-op Bank banking hall: The lender is seeking orders restraining the landlord from evicting it until end of year. FILE PHOTO | NMG 

Co-operative Bank of Kenya has gone to court seeking an injunction restraining its landlord, a wealthy Mombasa-based family, from evicting the lender from its Mtwapa branch.

In a suit filed at the Environment and Land Court in Mombasa, the bank says from November 2007 it has been a tenant of Mombasa Maize Millers Ltd, which is associated with the family of Mombasa millionaire Mohammed Islam Ali.

It argues that upon expiry of the lease, parties negotiated a new contract covering five years and three months effective November 2013, with an option of renewal.

Co-op Bank claims that at some point when the lease was in progress, Mombasa Maize Millers began exerting pressure on it to move out of the premises, citing the company’s expansion plans as the reason.

According to the bank, they were searching for alternative premises. “Unfortunately, the plaintiff (bank) states that despite their effort it became clear by around July 2018 that an alternative location was not available,” the bank argues in its suit papers.

Co-op Bank further argues it entered into negotiations to secure extension of the lease to December 2019.

Six-month notice

The bank says the Central Bank of Kenya requires that before a lender’s branch business is closed there should be a written consent of the regulator following a six-month notice.

Co-op says the landlord has declined to extend the lease, but threatened to evict it by January 31. Co-op Bank is seeking to stay until December 31 this year.

“The bank is one of the leading commercial banks in the country and East Africa; a sudden decision by the defendant (landlord) to terminate its lease and evict them from the suit premises located in a strategic port town will affect its banking services,” says Co-op Bank.

Mombasa Maize Millers argues that the bank in 2016 expressed desire to move its Mwapa branch. In its counter-claim, it says that the bank is a trespasser and has no right to continue occupying the premises.

“The defendant states that it is entitled to vacant possession of the premises as of January 31 when the lease term expired,” the counter claim states.

There are interim orders restraining the landlord from evicting the lender.

The case has been fixed for hearing on May 6.