Auction of 14 Riverside property that hosts Dusit D2 to proceed next week

Cape Holdings Ltd had urged the court to grant an interim order, stopping the intended public auction scheduled for May 26, pending the delivery of the ruling.

“For reasons to be given in the ruling, we decline to grant the interim order of injunction sought by the applicant,” the court said. The ruling will be given on November 27.

The sale would be another attempt by Synergy Industrial Credit to auction the property, after previous attempts were stopped as Cape Holdings rushed to court.

The property sits on approximately 5-acre parcel of land and has mixed development office blocks, a five-star hotel with swimming pool, a parking silo, food court and a cafeteria with a garden, among other amenities.

Documents tabled in court by Cape Holdings showed that valuations by Knight Frank in 2025 put the entire property at Sh7.5 billion, with a forced sale market value of Sh5.4 billion.

The amount to be recovered is well below the Sh10.7 billion being pursued by Synergy Industrial Credit Ltd.

In March, Cape Holdings lost another blow after the Court of Appeal rejected an application to stop the auction.

The court also rejected a proposal for the property to be sold by private treaty and the proceeds to be deposited in an interest earning account, pending the taking of accounts and debts owed to Synergy Industrial Credit ltd, I&M Bank and other creditors. 

While rejecting the application, the court said the issues the company was raising had been litigated all the way to the Supreme Court and there was no basis upon which the court can be invited to revisit what has already been decided.

Also read: How Sh710 million dispute ballooned to Sh10.7 billion, threatens auction of Dusit Complex

The court noted that the decree issued in March 2021 in favour of Synergy Industrial Credit was issued in line with an 'arbitral award that has survived challenge at every judicial level'. 

Further, the court said questions of interest, limitation and computation were either expressly determined or were matters that ought to have been raised at the appropriate stage of challenge to the award. 

The dispute started in 2011 when Cape Holdings and Synergy Industrial Credit Ltd entered into agreements for the purchase of two blocks in the under-construction building.

Initially, Synergy planned to buy both blocks but later scaled back to one. The agreed price was Sh703.2 million.

Cape Holdings claims Synergy made part of the payment and requested changes to be made to the building, but a dispute arose when Synergy allegedly terminated the agreement later in 2011, citing project delays, and demanded a refund.

What began as a single-block payment has since ballooned to a claim that threatens the entire six-block complex, including the parking silo.

When the dispute went to arbitration in 2015, the arbitrator ordered Cape Holdings to refund Sh1.66 billion, almost three times the price of the block in question, covering the principal, interest, opportunity cost, and foreign exchange losses, with a compound interest of 18 percent per annum.

Unhappy with the ruling, Cape Holdings challenged it in the High Court, which quashed the award in 2016, stating that the arbitrator had overstepped his mandate, including that foreign exchange loss should not have been considered for a Kenya shilling deal.

The award was later reinstated as Synergy escalated the dispute to the Supreme Court and the parties have been entangled in court battle over the years.

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