The High Court dismissed a petition by Cape Holdings and its directors that challenged Section 44A(4) of the Banking Act in a dispute over a debt of more than KSh10.6 billion linked to the 14 Riverside Drive complex in Nairobi.
The petition sought to stop enforcement of a debt that had risen from an original KSh570 million to over KSh10.6 billion, arguing that the continued accrual of interest violated the in duplum rule and that the enforcement would disproportionately limit the company’s property rights under Article 40 of the Constitution.
Justice Patricia Mande Nyaundi ruled that the matters raised had already been decided by other courts, describing the petition as res judicata, and ordered that costs be awarded to the first respondent, Synergy Industrial Credit Limited.
The court noted that approximately KSh9.013 billion, about 84 per cent of the total amount, comprised compound interest, and that the debt now exceeded the estimated October 2025 open-market value of the development, which was put at KSh7.3 billion.
Cape Holdings argued that interest should not have accrued during the four years and eight months when the arbitral award against it was set aside, and that the exclusion of judgment debts from the in duplum rule was unconstitutional.
The ruling leaves the 14 Riverside Drive development exposed to auction to recover the debt, following an earlier High Court decision on October 8 that declared the May 26, 2026 auction notices and related execution documents defective.
Cape Holdings said it will appeal the dismissal, maintaining that it is not trying to avoid its debt obligations but wants the constitutional issues raised in its petition to be heard.
