14 Riverside Property Dispute Deepens as High Court Order Sparks Fresh Legal Battle

A High Court order issued last Saturday stopping the planned auction of the 14 Riverside complex in Nairobi’s Westlands has triggered a fresh legal battle. The parties are sharply divided over whether the weekend proceedings were lawful.

Synergy Industrial Credit Ltd through senior counsel Ahmednasir Abdullahi challenged the interim orders issued on May 23. He argued that it was wrong for the court to grant the order on a Saturday without evidence that the required authorisation had been obtained from Chief Justice Martha Koome.

The dispute stems from Synergy’s efforts to recover a debt that has grown from an arbitral award of Sh1.66 billion to about Sh10.7 billion after years of accumulated interest. The matter dates back to 2011 when Cape Holdings agreed to sell office space in the 14 Riverside development to Synergy for Sh703.2 million.

After the transaction collapsed an arbitrator in 2015 awarded Synergy Sh1.66 billion. Although the High Court initially set aside the award it was later reinstated on appeal setting the stage for years of enforcement proceedings.

Ahmednasir Abdullahi argued that the court should lift the suspension of the sale. He said the orders had already served their purpose because the scheduled May 26 auction did not take place.

Senior counsel Paul Muite for Cape Holdings defended the order insisting that judges retain jurisdiction regardless of the day of the week. He argued that the injunction became necessary because the auction process violated mandatory provisions of the Auctioneers Rules and the Civil Procedure Rules.

The auctioneers allegedly sought to proceed with the sale using stale execution documents instead of initiating fresh execution proceedings after recent court decisions. They also allegedly failed to issue a fresh notification of sale in the prescribed format.

Cape Holdings has remained willing to comply with previous court directions requiring the deposit of Sh577 million into a joint interest earning account. The company accused Synergy of refusing to cooperate.

The High Court will rule on the latest application on October 8. Interim orders stopping the auction will remain in force pending the determination of the case.

The 14 Riverside complex is a high profile property that hosts the Dusit D2 hotel and office blocks. The prolonged legal battle has kept the property in limbo despite its prime location in Westlands.

The case highlights the complex nature of high value property disputes in Kenya where accumulated interest and procedural technicalities can significantly escalate the amounts at stake.