Court dismisses Tuju bid to block auction of prime Karen properties in Sh1.9bn debt row

The High Court has cleared the path for the East African Development Bank (EADB) to proceed with the auction of three prime properties in Karen linked to former Cabinet Secretary Raphael Tuju. The ruling, delivered on March 9, 2026, aims to recover a Sh1.9 billion loan advanced to Mr. Tuju's company, Dari Limited, more than a decade ago.

Justice Josephine Mongare struck out the application by Dari Limited and Mr. Tuju, noting that the plaintiffs were essentially asking the court to re-litigate matters that had already been determined. The court observed that the attempt to stop the auction was a vexatious use of judicial time, given that previous injunctions had been denied and the debt already recognized by both international and domestic courts.

The properties at the center of the dispute include the Entim Sidai Wellness Sanctuary, a boutique retreat located on Tree Lane, and the Dari Business Park situated along Ngong Road. These assets were used as security for a $9.3 million loan facility provided in 2015 to fund the acquisition and development of commercial units.

This long-running legal battle has spanned several years, with the lender and appointed auctioneers previously facing multiple hurdles. The bank, represented by Garam Investment Auctioneers and Knight Frank, can now move forward with the recovery process after the court vacated the interim orders that had temporarily shielded the assets from sale.

The dispute stems from allegations by the former minister that the lender did not honor the full disbursement of the agreed funds, specifically claiming a balance of Sh294 million was withheld. However, the courts have consistently found that the borrower failed to fulfill the necessary protocols for additional drawdowns, leading to the eventual default.

With the lifting of the stay orders, the commercial real estate sector in Nairobi's affluent Karen suburb is preparing for a significant transition. The auction of the 20-acre parcel and its associated hospitality infrastructure represents one of the largest debt recovery actions involving private commercial developments in the region.

The court's decision emphasizes the finality of debt adjudication, particularly regarding foreign-based lenders operating under international agreements. The ruling noted that the matter is now res judicata, meaning the issues have been conclusively judged and cannot be raised again by the same parties in the court system.

Observers in the construction and property development sectors noted that the resolution of this case provides clarity for lenders regarding the enforceability of securities. The auction process is expected to draw interest from high-net-worth investors and hospitality groups looking to acquire established assets in prime locations.