The long-running dispute over the planned sale of Nairobi’s 14 Riverside complex has taken a fresh turn after Synergy Industrial Credit sued I&M Bank and one of its senior executives, seeking Sh5.77 billion in damages for allegedly frustrating its efforts to recover a court-awarded debt.
In a suit filed at the High Court, Synergy accuses I&M Bank and its executive director, Sarit Suresh Raja Shah, of twice blocking the forced sale of the property, preventing the Synergy from enforcing a decree against Cape Holdings Ltd, the owner of the mixed-use development.
The claim is founded on the Marex tort, under which Synergy argues that the bank intentionally interfered with its ability to realise the fruits of a judgment that has remained unpaid since 2021.
According to the suit, I&M engaged in what Synergy describes as “abusive litigation” aimed solely at delaying or blocking execution of the decree.
“For a period of 1,652 days, the plaintiff was unlawfully hindered, delayed, stopped and prevented from enforcing and realising the fruits of the decree,” the suit states.
Synergy argues that the delays denied it the benefit of the judgment and caused losses amounting to Sh5.77 billion.
The dispute stems from an arbitration award arising from a failed property transaction. Synergy says it paid Cape Holdings Sh750 million to acquire part of the 14 Riverside development, but the deal collapsed.
An arbitrator in 2015 ordered Cape Holdings to pay Synergy Sh1.6 billion plus interest. According to Synergy, the amount outstanding had risen to Sh11.3 billion as of June 30, 2026.
Court documents show that the decretal amount stood at Sh5.13 billion on October 12, 2021. By April 21, 2026, when I&M withdrew an application seeking a review of a Court of Appeal judgment, the amount had increased to Sh10.9 billion.
Synergy says the difference between the two figures — Sh5.77 billion — represents the losses it suffered because the bank unlawfully delayed execution of the decree.
Property battle
The latest suit is the latest chapter in years of litigation over the ownership and proposed sale of the 14 Riverside complex.
I&M Bank had initially stopped the auction after arguing that it held a charge over the property securing a Sh2.82 billion loan advanced to Cape Holdings. The bank maintained that the court first needed to determine which creditor had priority over the asset before any sale could proceed.
That case was eventually dismissed. The bank later sought a review of the Court of Appeal decision before withdrawing the application in April this year.
A November 2020 valuation by Knight Frank placed the property’s market value at Sh7 billion and its forced-sale value at Sh5.25 billion. The auction, however, never took place.
Synergy now claims that by placing Cape Holdings under administration in October 2021, I&M triggered the statutory moratorium under Section 560 of the Insolvency Act, freezing enforcement proceedings and preventing recovery of the debt.
Synergy alleges that the bank used the insolvency process as a litigation strategy rather than a genuine corporate rescue mechanism.
According to the suit, I&M relied on a debenture registered on January 8, 2021 after advancing financial facilities to Cape Holdings, before placing the company under administration.
Loan questions
Synergy also challenges the legitimacy of the lending arrangement.
It says the debenture was based on a September 23, 2020 letter of offer indicating that I&M was taking over existing facilities previously held by Co-operative Bank of Kenya for Nandlal & Company Ltd.
However, Synergy alleges that no genuine takeover took place. Instead, it claims the funds were disbursed directly to Cape Holdings in October 2020, contrary to the terms of the offer.
“The plaintiff avers that the letter of offer dated September 23, 2020 clearly highlights there were no existing borrowing facilities that Cape Holdings had with the 1st defendant,” the suit states.
According to Synergy, Cape Holdings had redeemed all its previous facilities with I&M in 2011 and had since banked with Co-operative Bank of Kenya, making the 2020 transaction a new loan rather than a refinancing arrangement.
The company further alleges that the delay in enforcing the decree allowed Cape Holdings and its directors to dispose of assets that could have satisfied the judgment.
It claims company assets were dissipated, properties transferred to directors, their spouses, children and other relatives, and company funds used to acquire additional properties.
Synergy says it is still pursuing recovery of the outstanding debt through the sale of Cape Holdings’ assets once the pending court cases are concluded.
The targeted assets include the 14 Riverside complex, valued at Sh5.4 billion in October 2025, and several properties in Kajiado County with a combined estimated value of Sh105.7 million.
The company argues that had I&M not delayed execution through insolvency proceedings and prolonged court battles, it would have recovered a substantial portion of the debt before interest pushed the amount owed beyond Sh11 billion.
