Supreme Court Freezes Karen Land Auction Dispute

The Supreme Court of Kenya has halted all transactions and enforcement actions involving a high-value 25-acre land parcel in Nairobi's Karen estate, stepping into a decades-long legal battle over a bank auction.

The conservatory orders stay the execution of a Court of Appeal of Kenya judgment delivered on January 30, 2026. The apex court has explicitly barred the involved respondents, alongside their servants or agents, from possessing, occupying, or dealing with the prime parcel, which is registered as L.R. No. 7583/1.

This intervention stems from a protracted dispute between Nyanja Holdings Limited, a company associated with former Limuru Member of Parliament George Nyanja, and Kingdom Bank, an institution formerly known as City Finance Limited.

At the core of the litigation is a significant legal question for Kenya’s real estate and lending markets, specifically whether a borrower can reclaim land sold by a financial institution under a statutory power of sale, or if financial compensation serves as the exclusive remedy once a transaction closes.

The roots of the conflict trace back to lending facilities issued in the early 1990s, when an overdraft facility of approximately Ksh.8 million was secured using several properties, including the Karen estate.

Court filings indicate that the borrowers assert they paid more than Ksh.54 million over the years, yet faced persistent demands before the lender eventually sold the Karen land via private treaty to Redmars Holdings Limited for Ksh.60 million.

The borrowers claim the property was valued at Ksh.295 million at the time, arguing that the transaction proceeded unlawfully and lacked a valid forced-sale valuation.

In 2020, the High Court of Kenya ruled in favour of the borrowers, determining that illegal interest had been levied, the loan was overpaid, and the subsequent sale of the Karen asset was invalid. The High Court then nullified the transaction and ordered the property returned.

However, the Court of Appeal of Kenya reversed that finding in January this year, ruling that once a sale is concluded under a bank's statutory power, the borrower loses the right to recover the property, leaving damages as the sole remaining remedy unless fraud or buyer collusion is proven.

Fearing that the Karen land would be subdivided, sold, or charged before their final appeal could be heard, the applicants escalated the matter to the highest court.

Represented by their legal counsel, the applicants successfully argued that the case introduces issues of public importance that conflict with previous appellate decisions regarding illegal bank sales.

The case has now been directed to the Deputy Registrar of the Supreme Court for case management, ahead of the upcoming inter partes hearing where the conflicting arguments will be weighed.