By Andrew Kariuki

A decades-long legal fight over a prime 100-acre Karen property is now headed to the Supreme Court after Nyanja Holdings Limited successfully obtained certification to challenge a Court of Appeal decision that upheld the controversial transfer of the land.

The dispute traces back to a loan facility advanced by City Finance Limited, now Kingdom Bank, to Nyanja Holdings, using L.R No. 7583/1 Karen as security. Over the years, disagreements emerged over interest rates, loan calculations and the legality of the bank’s actions concerning the charged property.

Senior Counsel Cecil Miller, appearing for Nyanja Holdings, argued before the Court of Appeal that the matter raises weighty constitutional and public interest issues touching on land ownership, fraudulent statutory sales and remedies available to borrowers.

Miller maintained that the case goes beyond a private commercial disagreement and could significantly affect how courts handle disputes involving statutory power of sale in Kenya.

At the heart of the dispute is the sale of the Karen property to Redmars Holdings Limited through a private treaty in 2011 while litigation concerning the debt and sale process was still ongoing.

Nyanja Holdings challenged the transaction, arguing that the property was sold at a gross undervalue and through an unlawful process.

In 2020, the High Court ruled in favour of Nyanja Holdings, finding that the loan had allegedly been overpaid and nullifying the transfer of the land.

However, the Court of Appeal later overturned that judgment and held that once a statutory sale is completed, the borrower’s equity of redemption is extinguished and remedies become limited mainly to damages.

Miller strongly opposed that position during the certification proceedings, arguing that the appellate decision effectively allows illegally acquired titles to remain protected even where fraud or irregularities are established.

According to court documents, one of the questions framed for determination before the Supreme Court is:

“Whether an illegal exercise of the statutory power of sale can confer a good title to the purchaser and confine the chargor’s remedy to damages only.”

Nyanja Holdings further questioned whether courts should remain restricted to damages even where transactions are allegedly tainted by “fraud, collusion, illegality, or irregularity.”

Miller told the court that conflicting legal interpretations surrounding statutory sales continue to create uncertainty for borrowers and lenders across the country and require final guidance from the Supreme Court.

The respondents opposed the application, arguing that the dispute was purely commercial and did not amount to a matter of general public importance warranting Supreme Court intervention.

They also resisted attempts to preserve the Karen property pending the intended appeal, insisting that the Court of Appeal had already finalized the substantive dispute.

But in its ruling, the appellate court found that the questions raised by Nyanja Holdings transcended the interests of the parties involved and carried broader implications for property rights and statutory land sales in Kenya.

The judges stated

“The questions raised in the interplay between the existing jurisprudence and the principles enunciated by the Supreme Court in the Dina Management case… are of general public importance.”

The court ultimately allowed the matter to proceed to the Supreme Court, paving the way for what could become a landmark ruling on the legality of statutory land sales and protections available to borrowers challenging disputed transactions.