A commercial court has ordered a fresh valuation of a prime property at the centre of an Sh826 million loan battle between NCBA Bank and a construction company, signalling a new phase in the prolonged dispute.
Justice Alfred Mabeya directed that an independent, court-approved valuer reassess the current market value of the Karen-based property used as collateral for the loan issued to Tatu Construction Limited.
The judge ruled that a new valuation was necessary before any decision could be made on whether NCBA could proceed with its intended auction to recover the outstanding debt.
The contractor claims the property is worth over Sh1.2 billion and that NCBA’s previous valuation of Ksh780 million was aimed at disposing of the asset at a gross undervalue.
NCBA maintains that the borrower defaulted on repayments and that the bank is legally entitled to exercise its statutory power of sale after the loan fell into arrears. The contractor disputes the amount claimed, alleging that the bank imposed illegal penalties and interest, causing the liability to balloon from an initial Sh600 million facility to Ksh826 million.
Justice Mabeya said the dispute over figures required clarity to ensure fairness before any drastic recovery action is undertaken. The fresh valuation is expected to determine whether the bank’s auction notice reflects the true market price and if the borrower is entitled to relief on the interest charges.
Analysts say the ruling reflects a growing trend of courts demanding transparency and independent verification in loan recovery disputes involving large assets.
The case is set to return to court once the new valuation report is filed, with both parties hoping to use the fresh assessment to strengthen their arguments. For now, NCBA’s planned auction remains suspended while Tatu Construction gets a temporary reprieve in its fight to retain the property.
Written By Ian Maleve
