Court Declines to Stop Auction of Iconic 14 Riverside Property Over Sh10.7 Billion Debt

The Court of Appeal has declined to issue interim orders stopping the planned auction of Nairobi’s landmark 14 Riverside development, paving the way for the sale of the property later this month over a Sh10.7 billion dispute.

In a ruling delivered on Monday, a three-judge bench comprising Justices Kimaru, Munyao and Okello rejected an application by Cape Holdings Limited seeking to temporarily halt the auction pending the determination of its appeal.

The property, which includes the site of the 2019 DusitD2 terror attack, is scheduled to be auctioned on May 26, 2026.

Cape Holdings had asked the appellate court to suspend the sale until November 27, 2026, when the court is expected to deliver a ruling on its main application.

However, the judges said they were not convinced that the company had met the threshold for grant of interim relief.

“This application was strenuously opposed by the 2nd respondent,” the judges stated in the order, referring to I&M Bank Limited.

“For reasons to be given in the Ruling, we decline to grant the interim order of injunction sought by the applicant.”

The dispute dates back to 2010 when Synergy Industrial Credit Limited agreed to purchase one block within the 14 Riverside complex for Sh703.2 million.

Court documents indicate that Synergy paid Sh577 million before withdrawing from the transaction in 2011, citing delays and alleged breach of contract.

The matter was later referred to arbitration, where an arbitrator appointed by the Chartered Institute of Arbitrators awarded Synergy Sh1.66 billion in 2015 together with 18 per cent compound interest.

Although the High Court initially set aside the award in 2016, the Court of Appeal reinstated it in 2020.

With interest accumulating over more than a decade, the amount claimed has reportedly risen to approximately Sh10.7 billion.

Cape Holdings argues that the prolonged application of 18 per cent compound interest is excessive and unconscionable, saying the amount now claimed is grossly disproportionate to the original deposit paid by Synergy.

The company also challenged the planned auction, claiming the process was defective and failed to comply with legal notification and public advertisement requirements.

According to a 2025 valuation by Knight Frank filed in court, the entire 14 Riverside property is valued at Sh7.5 billion, with a forced-sale value of Sh5.4 billion, significantly lower than the amount being claimed by Synergy.

The single block that formed the subject of the original transaction is valued at slightly above Sh1 billion.

I&M Bank, which financed the development, placed the property under administration in October 2020 in a bid to safeguard its financial interests and opposed Cape Holdings’ application for interim orders.

In a separate development, the Chartered Institute of Arbitrators sought to join the proceedings as a friend of the court in 2024, arguing that the case could have far-reaching implications on arbitration practice in Kenya.

However, the Court of Appeal dismissed the application with costs.

The dispute has further extended to the company’s directors, who are facing prohibitory orders over several residential properties in Kajiado.

Synergy alleges the assets were acquired using company funds diverted to frustrate enforcement of the arbitral award, claims Cape Holdings has denied, insisting the properties were financed through lawful dividends.