Court Allows Absa to Sell Starex Freighters’ Property for Loan Recovery
Judge nodded to the Appellant to be at liberty to exercise its statutory power of sale, provided it complies with all legal requirements under the Lands Act
Starex Freighters Ltd has suffered a setback after a Milimani Commercial Court nodded to Absa Bank Kenya’s (ABK) bid to dispose of a parcel of land to recover a default loan amounting to Ksh 5 million.
Sitting at the High Court in Milimani, Justice Peter Mulwa allowed the appeal filed by ABK urging him to set aside the ruling of the subordinate court which issued a temporary injunction to the bank, its agents, or any other person under its instructions from issuing a demand notice, advertising for sale of the property known as Nairobi/Block 134/1297.
In the ruling that was delivered on April 13, 2025, Justice Mulwa stated “Having considered the grounds of appeal and the applicable legal principles, I find that the appeal is meritorious. The appeal is allowed, and the ruling of the trial magistrate delivered on 5th April 2024 is set aside.”
He nodded to the Appellant to be at liberty to exercise its statutory power of sale, provided it complies with all legal requirements under the Lands Act and the charging instrument.
The dispute arose after the ABK exercised its statutory power of sale concerning the property known as L.R. No. Nairobi/Block 134/1297 to secure the overdraft facility accrued to Ksh 5 million by Starex Freighters Ltd. This was after the Appellant requested Alex Owino Owuor who was the director.
He filed the plaint in the subordinate court under a certificate of urgency which sought the main order that pending the hearing and determination of the suit, a temporary injunction be issued against the Appellant.
Owuor sought the orders prohibiting the bank from exercising its statutory powers on selling or in any other way interfering with the Respondent’s quiet enjoyment of his property known as Nairobi/Block 134/1297 which was the surety for the loan.
The application was opposed by the Appellant vide the Replying Affidavit dated November 23, 2023, sworn by Samuel Njuguna, and further affidavit of Joseph Muli sworn on January 25, 2024.
After the hearing of the application, the magistrate considered the submissions by counsel and delivered her ruling on April 5, 2024, allowing the application.
The Respondent had secured the overdraft facility of Ksh 2M and an invoice discounting for Ksh 5M.
The Appellant contends that despite the partial payment, the Respondent is indebted to the tune of Ksh 3,013,103, which continues to accrue interest.
The judge noted that the Respondent proposed to settle the balance of the amount through monthly deposits of Ksh 50,000 this position, as averred by the Appellant, was not honored and this prompted the Appellant to issue the statutory notices,
“It is thus my finding that the existence of an outstanding debt and the chargee’s right to realize security indicate that the Respondent failed to meet this threshold,” Justice Mulwa said.
