The High Court has granted Cape Holdings Limited leave to amend its constitutional petition challenging the enforcement of a Sh10.68 billion decretal sum and include the National Assembly as the third respondent in proceedings.
When the matter came up for mention on Monday, Justice Patricia Mande Nyaundi, directed Cape Holdings to file and serve the amended petition within seven days, on or before July 7, 2026.
“Cape is granted leave to amend and include the National Assembly (Parliament) as the 3rd respondent, as the petition challenges the constitutional validity of section 44(A) of the Banking Act, and serve the Petition within 7 days, being on or before 7 July 2026,” ruled the court.
The court further ordered Synergy Industrial Credit Limited, the Attorney General and the National Assembly to file and serve their responses within 14 days, by July 21.
Cape Holdings was directed to file its submissions within seven days of being served with the responses, by July 29, 2026, after which the respondents will have 14 days to file their submissions.
The petitioner was also granted leave to file supplementary submissions within seven days of service of the respondents’ submissions, with the deadline set for August 21, 2026.
Justice Nyaundi fixed the petition for hearing on September 16, in open court, with the parties expected to appear at 8:30 a.m. for directions on the allocation of time for the hearing.
The constitutional petition was filed by Cape Holdings Limited and its directors, Vinay Bipinchandra Sanghrajka and Bipinchandra Bhaichang Sanghrajka, against Synergy Industrial Credit Limited and the Attorney General.
The petition challenges the enforcement of a Sh10.68 billion decretal sum, which the petitioners say includes Sh9.01 billion in compounded interest that accrued while the underlying arbitral award had been set aside by the High Court.
According to court documents, the dispute stems from an arbitral award issued on January 30, 2015, directing Cape Holdings to pay Sh1.66 billion together with compound interest at 18 per cent per annum until payment in full.
The award was set aside by the High Court in March 2016 before being reinstated by the Court of Appeal in November 2020.
The petitioners argued that interest should not have accrued during the period when the arbitral award had been nullified, contending that the continued accumulation of interest violates their constitutional rights under Articles 24, 27 and 40 of the Constitution.
They asked the court to determine whether interest can lawfully accrue during a period when the underlying obligation had been annulled by a court of competent jurisdiction.
They also challenged the constitutionality of Section 44A(4) of the Banking Act, arguing that it excludes court decrees and judgment debtors from the protection of the in duplum principle.
The petition further contended that enforcement of the decretal sum in its current form amounts to a disproportionate limitation of property rights.
In a Certificate of Urgency filed through Anjarwalla & Khanna LLP, the petitioners argue that the decretal amount continues to increase daily because of the 18 per cent compound interest.
“Every passing day increases the disputed figure, deepens the constitutional injury, and further entrenches the unconstitutionality of the present and untamed escalation,” the application states.
The petition also stated that enforcement measures have extended beyond the company’s assets to property jointly owned by the second and third petitioners together with interested party Jaysukhal Bhaichand Sanghrajka, including Land Reference No. Nairobi/Block 92/259 on Bendera Lane in Spring Valley.
According to an affidavit sworn by Bipinchandra Sanghrajka, the interested party is neither a judgment debtor, director nor shareholder of Cape Holdings and should not be affected by the execution process.
“The 2nd Petitioner and I are directors of the 1st Petitioner. We have separate and distinct corporate personality from the 1st Petitioner and we do not attract any personal liability for the 1st Petitioner’s debts and legal obligations,” the affidavit stated.
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