Wednesday, June 7, 2023

Auction date set for multi-billion Dusit D2 hotel building

Dusit D2 Hotel Auction: The High Court has allowed the auctioning of property belonging to Cape Holdings Limited to go on. This followed a petition by Synergy Industrial Credit Limited. The properties set to be auctioned include the Dusit D2 Hotel. The auction will take place on February 22, 2022.

The planned auctioning of the property was leaked by prominent lawyer Senior Counsel Ahmednasir Abdullahi. “Do you want to own one of the most prestigious Real Estate address in Nairobi? Do you have real money? Get ready, prepare yourself…look for me or my client…the Supreme Court removed the last hurdle to auction the entire property on Riverside that houses the former Dusit 2,” he said. “

In a court ruling at Milimani, the High Court’s commercial and tax division judge Alfred Mabeya declared that Synergy Industrial Credit Limited had satisfied the court in their request for the auctioning. “In view of the foregoing, I am satisfied that the applicant has made a strong case for the grant of the leave sought. Accordingly, I find the application dated 22/ 10/2021 to be merited and the same is hereby allowed,” the court ruled. The auctioning of the hotel and the entire office and parking block will be for a debt of Sh. 5 billion.

The ruling in favour of n auction brings to an end to the ten-year tussle between Cape Holdings Limited and their creditor Synergy Industrial Credit Limited.

The dispute dates back to 2011 when Synergy Industrial Credit Ltd entered into an agreement with Cape Holdings Ltd to purchase 14 blocks of apartments which the developer was constructing at 14 Riverside Drive.

The company claimed that they paid an upfront of Sh750 million for the blocks which were still under construction but when the property was completed, Cape Holdings refused to transfer their units.

In 2015, lawyer Ochieng Oduol, the sole arbitrator found that the developer had breached the terms of the contract by failing to hand over the blocks paid for and ordered Cape Holdings to refund the principal amount and compound interest totalling Sh1.7 billion. The arbitrator had ruled that the compensation would cover a refund of advance payments, loss of interest costs, opportunity cost and loss of exchange fluctuation for monies paid in dollars as well as loss of goodwill.

Cape Holdings moved to the High Court to challenge the arbitration award and in March 2016, the court set aside the award on grounds that the arbitrator acted beyond his jurisdiction.

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Synergy Industrial Credit again moved to the Court of Appeal and in 2019, the court overturned the High Court decision and reinstated the arbitration award, and also ordered the developer to pay all accrued interests.

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