Kenya's High Court has ruled that the planned auction of 14 Riverside Drive, linked to a Sh577 million dispute, was defective and therefore invalid. The court ordered that the sale documents be set aside and a new process be started in compliance with the law. This decision was made in favour of Cape Holdings Ltd, the registered owner of the property. Cape Holdings had challenged the auction organised by Synergy Credit and Moran Auctioneers.
The auction, originally slated for 26 May 2026, was halted on 23 May after Cape Holdings filed an urgent application on 22 May, alleging procedural irregularities. The presiding judge identified four specific defects in the execution documents dated 16 March 2026. These defects included the lack of a reserve price and failure to disclose existing encumbrances on the property.
The court set aside the warrants of sale, the notification of sale, the auctioneer's notice, and the public advertisement, rendering them null and void. This decision effectively stopped the auction process that was supposed to take place. The court's ruling was based on the need for auction processes to adhere strictly to legal requirements.
The judgment mandated that any future auction be preceded by an updated professional valuation. The Deputy Registrar must determine a reserve price after notifying both parties, ensuring the property cannot be sold below the court-approved minimum. Fresh sale documents must disclose the reserve price and all registered encumbrances.
The auctioneer must fully comply with the Auctioneers Rules. The court dismissed Synergy Credit's preliminary objection to its jurisdiction, citing Section 34 of the Civil Procedure Act. This act requires execution matters to be decided by the executing court.
Synergy Credit had made allegations of collusion between the court and Cape Holdings' lawyers, but these were rejected by the judge. The judge noted the absence of supporting affidavits and ordered the offending paragraphs removed from the record. Synergy Credit indicated it will appeal the decision, signalling that the dispute may continue through higher courts.
Cape Holdings welcomed the ruling, stating it reaffirmed the necessity for auction processes to adhere strictly to legal requirements. The company confirmed its commitment to defending its rights. The dispute over 14 Riverside Drive is valued at Sh577 million, and the court's decision has significant implications for the parties involved.
Key points
- The High Court of Kenya nullified the auction of 14 Riverside Drive due to procedural flaws.
- The court ordered a fresh sale process, citing the need for compliance with the law.
- The dispute over the property is valued at Sh577 million.
