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Linturi, Kitany property dispute far from over

Meru Senator Mithika Linturi

Meru Senator Mithika Linturi at the Milimani Law Courts on October 9, 2019.

Photo credit: File | Nation Media Group

A property dispute between two companies associated with Meru Senator Mithika Linturi and his estranged wife Marianne Kitany is far from over.

This is after the latter lost an attempt to sell three pieces of land whose titles were used to secure a Sh530 million loan.

The parcels are owned by Barons Estate Ltd, whose director is Mr Collins Ng'etich, Ms Kitany's son, while the loan was advanced by Family Bank to Atticon Ltd, which is associated with Senator Linturi.

Mr Ng'etich wanted the court to allow Barons Estate Ltd to sell the pieces of land, which it charged at the bank as guarantee for the loan given to Mr Linturi’s trading company five years ago.

In the application, Mr Ng'etich also wanted the court to order that after disposal of the properties to an identified buyer, a sum of Sh326 million be deposited in a joint interest-earning account in the name of the advocates for the buyer and bank— H& K Law Advocates and PW Wena & Company Advocates.

After the sale, he wanted the bank to release the titles for the suit properties.

Barons' arguments

In the court papers, Barons Estate Ltd is not disputing being a guarantor for a sum of Sh326,250,000 but disputes guaranteeing the extra amounts.

Mr Linturi is accused of increasing the loan secured using the Barons' property to Sh530 million without the directors' consent.

Barons argued that it had obtained a suitable buyer for the parcels of land at the price of Sh400 million.

At the centre of the dispute are claims of fraud and forgery against Atticon Ltd, Mr Linturi, Emily Nkirote Buantai and Litany Investments Limited.

Barons is also questioning validity and enforceability of the legal charge instruments (collaterals) and entries in the encumbrance land register.

However, High Court judge Wilfrida Okwany dealt a blow to Barons after ruling that allowing sale of the land is tantamount to rewriting the contract between the parties (the two companies).

Voluntary agreement

The judge found that the parties had voluntarily entered into an agreement to charge the suit properties to the bank as security for advances made to the Atticon Ltd.

"The court cannot interfere with the terms of the said agreement except where it has been established that there was coercion, fraud or undue influence. In the present case, the applicant concedes that the issue of whether there was forgery or fraud by the respondents in executing the charges is an issue that can only be determined after the hearing of the main suit," said Justice Okwany.

She said Barons had not made out a case for the granting of orders sought in the application.

In opposition to the application, Atticon together with Mr Linturi, Ms Nkirote and Litany Investments Ltd told court that the sale of the suit properties will not only amount to breach of contract but also be highly prejudicial to them.

This is because Atticon already gave sufficient and adequate consideration in exchange for Barons offering the suit properties as securities to the bank.

State of securities

Further, that the securities offered by Barons to the bank were intended to act as continuing securities for the payment of the credit facilities advanced to Atticon Ltd.

The court heard that sale of the securities will prejudice the further advancement of credit facilities to Atticon Ltd as contemplated under the charge instruments and the Deed of Guarantee.

Mr Linturi and Ms Kitany had accumulated vast properties before their acrimonious break-up that has been playing out at the family and commercial courts.

Among the properties is a house in Runda, Nairobi, which is at centre of a court dispute.