Court halts sale of Pinnacle Tower land over loan dispute

A general view of the Pinnacle Tower in Upper Hill. [File, Standard] The High Court has granted conservatory orders preventing Credit Bank Limited and Purple Royal Auctioneers from proceeding with the sale of land designated for the construction of the Pinnacle Tower, set to become Kenya's tallest building. The land, located in Upperhill, Nairobi, had been put up for auction despite ongoing efforts to resolve a financial dispute. Justice Peter Mulwa issued the orders, which prohibit the bank and auctioneers from selling, interfering with, or even entering the property while the lawsuit filed by One Upperhill Tower Limited is heard and determined. "Pending the hearing and determination of this application, the Court does issue a temporary injunction restraining the Respondents whether by themselves, their servants, agents or any person claiming through or under them from entering, selling, taking over, advertising, offering for sale or in any manner whatsoever interfering with that parcel of land known as Title No. NAIROBI/BLOCK 31/219," Justice Mulwa ruled. The lawsuit was filed by One Upperhill Tower Limited, through its director, Abdulkadir Hussein. The petitioner claims that Credit Bank Limited, the lender in the matter, is attempting to auction the property unfairly, despite consistent loan repayments by the borrowers, Jabavu Village Limited and Hasscon Pharmaceuticals Limited. The dispute centers around a loan agreement made on September 15, 2020, where the property in question, Title No. NAIROBI/BLOCK 31/219, was charged in favor of the bank to secure financial facilities. While the borrowers have diligently serviced the loan, they were unexpectedly sent a demand notice for USD 9.5 million, with a deadline of January 30, 2025, before the property would be auctioned. On January 28, 2025, Purple Royal Auctioneers placed notices to sell the land on the walls of the property, prompting the legal challenge. In the court documents, the petitioner argues that the notice to sell is "unlawful and illegal" because the bank has failed to follow proper procedures under sections 89, 90, and 96 of the Land Act, 2012. The notice, the petitioner argues, was issued without the proper notifications to the chargor or the borrowers, suggesting that the bank's true intention may be to acquire the land under questionable circumstances. "The notice is illegal, unprocedural, and indicative of the 1st Respondent's intention to acquire the suit property," the application states. "By issuing the faulty notice, the 1st Respondent has curtailed the Applicant's right to redeem its property before the Bank exercises its statutory power of sale." The petition further alleges that the undervaluation of the property is part of a scheme by the bank to recover the full loan balance, should the sale go through. The applicant contends that, if the land is sold at a loss, they would suffer irreparable damage that cannot be compensated by monetary damages. "The Respondent's actions are premature and unwarranted, given the Borrowers' efforts to settle the loan," the application reads. "Unless the orders sought herein are granted, the Applicant risks losing its properties through the illegal, crafty and corrupt scheme of the Respondents." The land, known as L.R. No. Nairobi/Block 31/219, had been advertised for sale in local newspapers, with potential buyers invited to submit bids for the purchase. According to the notice, the land was registered under One Upperhill Towers Limited, Jabavu Village Limited, and Hasscon Pharmaceuticals Limited.

Court halts sale of Pinnacle Tower land over loan dispute

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Court halts sale of Pinnacle Tower land over loan dispute

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