Cape Holdings Ltd, the company owning the prestigious 14 Riverside property in Westland and home to the Dusit Hotel faces the auctioneer’s hammer following another failed attempt to block the sale of the premises. 

The sale, pursued by Synergy Industrial Credit, aims to recover a debt amounting to Sh5.5 billion, stemming from a long-standing dispute dating back to 2010.

The conflict originated when Cape Holdings developed the 14 Riverside complex and entered into an agreement with Synergy Industrial Credit to sell some blocks and parking spaces for Sh750 million. 

However, Cape Holdings failed to transfer the property as stipulated in the agreement, prompting the dispute to be referred to arbitration. In 2015, the arbitrator ruled in favour of Synergy Industrial Credit, ordering Cape Holdings to refund the principal amount along with interest and other costs, totaling Sh1.66 billion. 

Legal battles

Despite this ruling, Cape Holdings has engaged in prolonged legal battles to overturn the payment order, a journey that has seen the dispute escalate to the Supreme Court.

The Supreme Court, having dealt with the matter, referred it back to the Court of Appeal for a conclusive determination. In the latest ruling, the Court of Appeal noted suspicious timing surrounding the company’s placement under administration by I&M Bank. 

The court observed that this administrative action coincided with the dismissal of yet another appeal by the Supreme Court, effectively marking the end of Cape Holdings’ legal maneuvers.

The Court of Appeal’s decision paves the way for Synergy Industrial Credit to proceed with the sale of 14 Riverside. The proceeds from the sale are intended to settle the outstanding debt owed by Cape Holdings. 

This development marks a significant turn in a dispute that has lingered for over a decade, underscoring the complexities and challenges involved in property transactions and debt recovery in Kenya’s legal landscape.

Early this year, the Court of Appeal dismissed a request by an administrator seeking to be allowed to continue managing multi-billion shillings assets belonging to Cape Holdings Limited, including where Dusit D2 sits. Appellate Judges Asike-Makhandia, Sankale Ole Kantai and Mwaniki Gachoka dismissed the application stating that the court had no jurisdiction to give such orders after the expiration of a term.

“From the foregoing, it must be clear to all and sundry that this court has no jurisdiction to extend or re-appoint an administrator whose term has expired, accordingly the prayer of status quo ante sought in the application cannot be granted for to do so will be tantamount to reinstating or re-appointing an administrator whose term has expired by operation of law which is not permissible. This conclusion suffices to dispose of the entire application,” the judges ruled.