The Environment and Land court in Nairobi was Monday asked to set aside orders stopping Mahadi Energy Limited from occupying several prime properties in Nairobi and Mombasa that were allegedly sold in invalid auctions.
In an application filed under a certificate of urgency, Mahadi Energy Limited and its director Ibrahim Hussein Mahadi through their lawyer Danstan Omari, told the Environment and Land Court at Milimani that the ex parte orders issued on October 23, were obtained through material non-disclosure and have caused them immense loss.
The disputed properties include parcels located along Mtelo Road in South C, Juja Road in Pangani, and in Mainland North, Mombasa, registered as L.R. Nos. 209/5082, 209/2389/95, 4689/VI/MN, and 2428/VI/MN.
The orders were granted in favour of Shabeel Project Services Limited, which claims to have purchased the properties during auctions conducted on August 14 and September 4, 2024.
However, Mahadi Energy argues that the auctions were illegal and fraudulent, saying no statutory notices were issued as required under the Land Act, and that some of the properties sold were never charged to the bank that purported to auction them.
Mahadi, in his affidavit, told the court that the properties were secured for Islamic financing facilities advanced by Premier Bank Limited (formerly First Community Bank) between 2011 and 2017, amounting to Sh631 million.
He said the loans were structured under Islamic finance principles, which prohibit interest (riba) and require transparent profit-sharing, but the bank inflated repayment demands through unjustified profits not compliant with Sharia law.
Mahadi Energy claims to have repaid over Sh530 million through various channels, including direct payments, rent proceeds, and compensation from the National Land Commission, but the bank allegedly failed to reflect the payments, exaggerating the debt to justify the auction.
The company further told the court that it had already filed a constitutional petition in Mombasa Petition No. E066 of 2024, Mahadi Energy Limited & Another v. Premier Bank Limited & Others challenging the legality of the auctions.
The Mombasa High Court, presided over by Justice Gregory Mutai, issued conservatory orders on October 7, 2025 restraining any interference with the properties pending determination of that petition.
Mahadi argues that Shabeel Project Services Limited concealed the existence of those Mombasa court orders when it obtained the ex parte orders in Nairobi, amounting to abuse of court process and forum shopping.
“The ex parte orders were obtained without full and frank disclosure to this court of the pending constitutional petition and valid conservatory orders, causing irreparable harm to the applicants,” Mahadi stated in his affidavit.
He added that the company’s operations have been paralyzed since the properties are central to its business in petroleum importation, storage, and distribution.
“Mahadi Energy Limited, is a duly incorporated company under the laws of Kenya, engaged in the energy sector, particularly in the importation, storage, and distribution of petroleum products, and owns several valuable properties that form the backbone of its operations and financial stability,” read the court documents.
The firm now wants the court to lift or suspend the restraining orders and preserve the status quo pending the hearing of the Mombasa constitutional petition.
“It is in the interests of justice that this application be heard urgently to preserve the status quo pending determination of the constitutional petition,” said Omari.
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