The Court of Appeal has declined to review a decision blocking the sale of the property where DusitD2 Hotel stands over a debt of Sh5.5 billion.
A bench of five judges of the Appellate Court declined to reverse the orders granted by a different bench of the court in April last year, blocking the planned auction pending the determination of an appeal filed by I&M Bank.
Synergy Industrial Credit Ltd, which is seeking Sh5.5 billion from the owners of property on Nairobi’s Riverside Drive, had protested the suspension of the planned auction, arguing it was discriminated against by the Court of Appeal when it granted the order.
The company through senior counsel Ahmednasir Abdullahi argued that the lender was not a party to the insolvency petition before the High Court, which sanctioned the auction.
Justices Hellen Omondi, Mumbi Ngugi, Imaana Laibuta, John Mativo and George Odunga said the mere fact that other parties stand to benefit from the stay is not necessarily a ground for declining a merited application.
“It is not contended that the 1st Respondent (I&M Bank), had no benefit to reap from the stay. It cannot be gainsaid that a debenture holder has an interest in a property at the risk of being sold in execution of a decree,” the judges said.
Mr Abdullahi had argued that the court gave the lender preferential treatment and by not adhering to precedents, the court would end up creating disorder and uncertainty.
I&M Bank through lawyer William Kabaiku argued that the property is charged to the bank over a loan of Sh2.82 billion. According to the bank, the court should determine who should be given priority over the property, as both are owned by Cape Holdings, the owner of the property.
