The Environment and Land Court has cleared the National Bank of Kenya (NBK) to auction the Nairobi Upper Hill Hotel, rejecting a plea to halt the sale.
The hotel owner, Geoffrey Wahome Muotia, sought to stop the auction until his application’s resolution, following the NBK’s notice of intent to auction the property due to a Sh447 million debt.
Justice Jacqueline Mogeni, however, dismissed Mr Wahome’s plea saying that the court does not have powers to determine the case that should have been filed before the High Court.
“I find that this Court, based on the reliefs sought and a red flag having been raised at the earliest opportunity, lacks jurisdiction to proceed further to consider the claim as raised in the plaint, and… I down tools,” Justice Mogeni said.
In September 2014, Mr Wahome received Sh10 million as an overdraft, Sh236 million as a commercial mortgage, and Sh35 million as a term loan from NBK, totalling Sh281 million before adding interest and bank charges.
However, after 10 years, he reportedly failed to make payments, resulting in an outstanding balance of Sh447 million, forcing NBK to issue an auction notice.
Mr Wahome has since been attempting for years to stop the auction, and the case has been heard up to the Court of Appeal.
According to Justice Jacqueline Mogeni, it is undisputed that the property was mortgaged to the bank to secure an overdraft, commercial mortgage, and a term loan, and the owner has long defaulted on the loan repayment.
“We are primarily dealing with a legal charge here and the subsequent statutory notice of sale, which is what the applicant intends to stop and which cannot be separated from the applicant’s intended action for redevelopment of the suit property,” the judge said.
This can only be challenged in the High Court, the judge said, by opposing the sale, as Mr Wahome alleged that the lender had failed to provide an opportunity for proposing repayment through redevelopment.
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