The High Court has temporarily stopped sale of the 14 Riverside Complex, where the Dusit 2 hotel stands.
The auction was slated for Friday, April 11, 2025, and was to be conducted by Phillips International Auctioneers to recover a debt of Sh9 billion owed to Synergy Industrial Credit Ltd.
Justice Josephine Mong’are froze the auction after Cape Holdings Ltd, the owner of the building, complained that the forced sale would happen without a fresh valuation of the property.
The judge directed the parties to appear before her on May 9 for a hearing. In a newspaper ad on March 20, invited buyers in a third attempt to auction the property, which has been in court corridors for over a decade.
“All interested bidders are requested to view the property and verify the details independently to their satisfaction as these are not warranted by the auctioneer or any other party,” the notice stated.
But Cape Holdings went to court through senior counsel Allen Gichuhi arguing that the notice for sale had not been issued as required by law.
Mr Gichuhi added that the sale period has been illegally reduced from 59 days to 21 days in contravention of Rule 15 of the Auctioneer’s Rules.
The lawyer said that there wasn't a 45-day redemption notice as mandatorily required by the Auctioneers Rules upon receipt of the letters of instruction issued by the auctioneer.
“An advertisement can only take place 14 days after issuance of a 45-day redemption notice. Rule 15(e) of the Auctioneers Rules has been breached. No consent has been obtained from the judgment debtor to a reduction of the sale period from 59 days to 21 days in accordance with Order 22 Rule 58 of the civil procedure rules,” Mr Gichuhi submitted.
He further argued that there was no current valuation report showing the value of the property or any lots situated on the building.
According to Mr Gichuhi, the only valuation report on record was the instance of the judgment creditor dated November 24, 2020, from Knight Frank, which expired on November 24, 2021.
He further pointed out that the notification of sale did not set out the reserve price of each of the five office blocks and the hotel- Dusit 2.
“The court should not sanitise a miscarriage of justice at the hand of an overzealous judgment creditor who has unlawfully caused the illegal sale of the suit property in contravention of all known legal principles of law pertaining to computation of interest, failure to correctly submit to the court an updated and accurate valuation report and shorting the redemption process allowed by law,” Mr Gichuhi submitted.
The two companies fell out in a deal where Synergy Industrial Credit was to purchase two blocks, comprising 14 units and parking lots, for a price of Sh710 million.
