Nairobi Tycoon’s Upperhill Hotel Auction Halted by Appeals Court
The Nairobi Upperhill Hotel’s auction has been halted by the Court of Appeal after a challenge by the hotel’s reclusive billionaire proprietor to the proposed sale’s purpose of recovering a Ksh281 million loan.
The order prolongs the protracted legal dispute in which the tycoon petitioned the court for an extension of time to find a purchaser for the premier property while challenging the procedure.
He has presented evidence in court that the bank’s advertising of the auction in local periodicals thwarted his initial efforts to secure a buyer and undervalued the property.
“The ruling in this application shall be delivered on 26th January 2024. Until then, there shall be a stay of execution of the ruling and order of the High Court,” a three-judge bench ruled.
The lender was initially granted auction orders by the High Court, but the Court of Appeal has since halted the proceedings.
“I agree with the counsel for the bank that the UpperHill hotel does not have any standing to agitate this suit in respect of a property in which it lacks a proprietary interest,” Justice David Majanja ruled.
The application submitted by the magnate aimed to compel the bank to abstain from proceeding with the sale. He also requested an extension on the loan repayment schedule to pursue a committed buyer.
The proprietor stated on the application that he was committed to repaying the loan, but that the process had been delayed by several obstacles, including a difficult economy and a disability-causing accident.
He noted that his company experienced a temporary setback when the entrance to the hotel was closed due to government road construction and improvement activities in Nairobi’s Upper Hill neighborhood.
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Additionally, he was involved in a traffic collision in 2022, which necessitated medical treatment abroad, according to the magnate.
Notwithstanding the obstacles encountered, the proprietor reported having secured a buyer for the prime property. However, upon further examination, he discovered that the bank had advertised the property on an online platform before the transaction was finalized, thereby discouraging the buyer.
“He contends that the Bank has acted in an unconscionable manner as it had led him to believe that it would not advertise the property for sale while the negotiations were ongoing. The plaintiff (owner) also complains that he is apprehensive that the Bank will sell the suit property at an undervalue as the value advertised is based on the valuation conducted in 2017 contrary to section 97(D of the Land Act,2012,” court documents show.
The lengthy dispute commenced in 2015 when the proprietor submitted a petition to the court requesting that the auction be halted.
The entrepreneur requested an extension on the loan repayment, attributing the delay to the inadequate structuring of the financing systems.
Furthermore, he maintained that his endeavors to secure the loan from an alternative financial institution were impeded once the initial bank placed him on its Credit Reference Bureau (CBK) list.
Nairobi Tycoon’s Upperhill Hotel Auction Halted by Appeals Court
