The High Court has stopped the planned auction of a property at Nairobi’s 14 Riverside Drive complex after finding that the process used to organise the sale was defective.
Justice Moses Ado ruled in favour of Cape Holdings and set aside the warrants and auction notices that had paved the way for the property to be sold.
The judge also dismissed an objection by Synergy Industrial Credit Limited challenging the court’s jurisdiction. He further ordered that allegations made by Synergy against the court be removed from the record.
The ruling meant the property cannot be sold through the auction process that had already been initiated.
Any future attempts to dispose of it through an auction will have to begin afresh, with the reserve price determined by the court.
The case comes from a long-running commercial dispute between Cape Holdings and Synergy over a 2010 property transaction involving an office block at the Riverside development.
Synergy had paid about Sh577 million as a deposit towards the purchase and the transaction later collapsed, prompting Synergy to seek a refund of the money.
Synergy argued that delays in the development had frustrated the deal.
Cape Holdings disputed this by saying some of the delays were linked to design changes requested by the buyer.
The disagreement eventually ended up in court and later led to efforts to recover the disputed amount through the proposed sale of the property.
Cape Holdings challenged the auction, arguing that the process had not been carried out lawfully.
In his ruling, Justice Ado agreed that the process was defective and invalid. He consequently cancelled the warrants and notices that had been issued to facilitate the auction.
The decision gives Cape Holdings temporary relief from the planned sale, but does not settle the wider financial dispute between the two companies.
