Court Gives Credit Bank Green Light to Sell Prime Nairobi Plot Over Sh1.2bn Debt

Credit Bank has secured approval to auction a prime parcel of land in Nairobi’s Upper Hill after the Court of Appeal rejected a bid by the property owner to halt the sale in a long-running dispute over a multibillion-shilling debt.

The appellate judges dismissed an application by One Upper Hill Towers Ltd, clearing the lender to proceed with selling the land that once hosted the foundation for a proposed skyscraper touted as Africa’s tallest building.

The court found that the company and its affiliates had fallen into deep loan default and offered no evidence that the outstanding amounts were being serviced. 

The dispute centres on loans totalling Sh1.2 billion advanced to two sister firms, Jabavu Village Ltd and Hasson Pharmaceuticals Ltd, which were secured using the Upper Hill property.

Court filings showed the debt had ballooned to more than Sh2 billion by the time the matter reached the High Court, with dollar-denominated facilities continuing to accrue interest. 

One Upper Hill Towers Ltd insisted that it had been regularly servicing the facilities and accused the bank of acting maliciously by initiating the forced sale without following legal procedures under the Land Act.

The firm argued its right to redeem the land was being violated and sought to suspend the auction.

But Credit Bank told the court it had issued all mandatory notices after persistent default.

It said a 90-day statutory notice was sent in September 2022, followed by a 40-day notice under Section 96 of the Land Act, valuation of the property and a notification of sale.

When the arrears were not cleared, the bank moved to recover the debt through auction. 

The Court of Appeal agreed with the lender, noting that an injunction is an equitable remedy granted only where circumstances justify it.

The judges said the evidence clearly showed the borrower was in default and that once a charged property is used as security, it becomes a commodity for sale if repayment terms are breached.

The bench also held that if it is later found that any notices were irregular, the property’s value can be compensated, adding that the bank’s right to realise its security was already established.

It concluded that the application lacked merit and dismissed it with costs. 

The ruling ends months of legal battles that had frozen Credit Bank’s efforts to recover the debt through the high-value plot located in one of Nairobi’s most sought-after commercial districts.

The decision now paves the way for the lender to proceed with the auction, marking another high-profile property sale tied to rising loan defaults across Kenya’s real estate sector.