The High Court has paved the way for the East African Development Bank (EADB) to auction three Karen properties associated with former Cabinet Secretary Raphael Tuju in a bid to recover a Sh1.9 billion loan extended to his firm, Dari Limited, about a decade ago.
The court dismissed a case filed by Dari Limited and Mr Tuju, who had argued that the planned auction was unlawful because it allegedly breached interim court orders and was being pursued while they were challenging the validity and enforcement of the loan agreement that secured the debt.
They had asked the court to block the sale and transfer of the properties to any buyer. However, the judge rejected the request, struck out the suit, and lifted temporary orders that had earlier halted the auction process.
In their application dated October 25, 2024, the two sought injunctions to stop the auction or transfer of two Karen properties used as collateral for the loan. These included Entim Sidai Wellness Sanctuary (L.R. No. 11320/3) and Tamarind Karen and Dari Business Park (L.R. No. 1055/165).
They also asked the court to cancel any transfer already registered over Tamarind Karen and Dari Business Park and sought punitive action against bank officials, valuers, and auctioneers for allegedly disobeying earlier court directives. In addition, they attempted to bring the Chief Land Registrar into the case to block any change of ownership while the dispute was ongoing.
The court, however, ruled that the case amounted to an abuse of the judicial process because it sought to revisit matters that had already been decided by several courts.
According to the ruling, the applicants were effectively asking the court to reconsider an injunction that had previously been denied, reopen a debt that had already been determined through international proceedings and recognised locally, and re-argue the enforceability of securities over properties that had been the subject of multiple court decisions.
The judge therefore upheld the bank’s request to strike out the case, noting that the issues raised had already been conclusively determined.
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The dispute traces back to a multimillion-dollar loan granted to Dari Limited under a facility agreement signed on April 10, 2015. In 2019, a commercial court in the United Kingdom issued a summary judgment ordering the company to repay $15,162,320.95, equivalent to about Sh1.95 billion at the current exchange rate. Kenyan courts later recognised the judgment, allowing the lender to pursue recovery locally.
Subsequent appeals lodged in Kenya’s Court of Appeal and the Supreme Court were unsuccessful, reinforcing the bank’s right to enforce the securities tied to the loan. The court noted that a similar application for an injunction had already been rejected, with earlier rulings finding no strong case against the lender.
It concluded that filing the same request again amounted to re-litigation. The judge also dismissed constitutional arguments raised by the applicants, describing them as attempts to delay the process and declining to revisit issues that had already been resolved in both Kenyan and UK courts.
As a result, the amended suit and the application for an injunction were struck out with costs, and the temporary orders blocking the sale were lifted, allowing the bank to proceed with recovery measures.
