Cape Holdings to appeal ruling on Sh10.6 billion 14 Riverside debt
The company is challenging the accrual of interest during a period when an arbitral award underlying the debt had been set aside.
Cape Holdings has vowed to appeal a High Court ruling that blocked its constitutional petition challenging a debt that has ballooned from Sh570 million to more than Sh10.6 billion through compound interest.
The company said it would challenge the decision delivered on Thursday, October 22, 2026, by Justice Patricia Nyaundi Mande at the High Court’s Constitutional and Human Rights Division in Nairobi.
The judge upheld a preliminary objection by Synergy Industrial Credit Limited, finding that the issues raised in the petition had already been determined by other courts and were therefore barred under the doctrine of res judicata.
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However, Cape Holdings maintains that its petition raises three constitutional questions that have never been conclusively addressed by any court.
The company is challenging the accrual of interest during a period when an arbitral award underlying the debt had been set aside.
According to Cape Holdings, the High Court set aside the award in March 2016, and it was only reinstated in November 2020 following an appeal. The company argues that interest should not have accrued during the four years and eight months when the award was not in force.
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It is also questioning whether excluding court judgment debtors from the protection of the in duplum rule, which limits the accumulation of interest on certain loans, amounts to discrimination and violates the Constitution.
The third issue concerns the enforcement of the debt against the entire 14 Riverside Drive development, which Cape Holdings says disproportionately infringes on its right to property under Article 40 of the Constitution.
The company argues that the debt, now exceeding Sh10.6 billion, is higher than the development's stated value of approximately Sh7.3 billion as of October 2025, despite the original transaction involving only one block.
Cape Holdings maintains that the enforcement measures should be examined against the constitutional requirement under Article 24 that any limitation of fundamental rights must be justified.
Speaking after the ruling, the company expressed disappointment, saying the preliminary objection should have been dismissed to allow the petition to proceed to a full hearing.
“We are disappointed with the court’s decision on the preliminary objection. That objection should have been dismissed, allowing our petition to be heard on its merits,” the company said.
“We will appeal this decision and continue to fight for our day in court.”
The company added that it was not seeking to avoid its financial obligations but wanted the constitutional issues surrounding the debt to be heard and determined.
“We are not asking to be excused from our legal obligations; we are asking for the opportunity to have our constitutional claims heard and determined,” it said.
The latest ruling comes amid a separate legal battle over the proposed auction of the 14 Riverside Drive property.
On October 8, 2026, the High Court’s Commercial Division found that the May 2026 auction process conducted by Synergy Industrial Credit and Moran Auctioneers was defective.
The court consequently set aside the warrants and auction notices issued in connection with the sale.
Cape Holdings said Thursday’s decision on the constitutional petition did not affect the October 8 ruling, leaving the separate decision on the defective auction process intact.
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