(NAIROBI, KENYA) – The owners of Nairobi’s 14 Riverside complex want Kenya’s High Court to rule on whether a section of the Banking Act is unconstitutional for allowing interest on court-awarded debts to exceed the principal amount, exposing borrowers to disproportionate claims.
Cape Holdings Limited and its directors are challenging Section 44A (4) of the Banking Act, which excludes judgment debtors and court decrees from the protection of the in duplum principle. The rule generally caps recoverable interest on a debt at the outstanding principal.
The petition arises from a long-running commercial dispute between Cape Holdings and Synergy Industrial Credit Limited over an aborted transaction involving a block within the 14 Riverside Drive development in Nairobi.
An arbitrator awarded Synergy KES 1.666 billion ($12.9 million / GBP 9.5 million). Fresh warrants of sale and a notification of sale issued on 16th March 2026 put the amount allegedly due at KES 10.679 billion ($82.6 million / GBP 61.1 million).
Cape Holdings told the court that about KES 9.013 billion ($69.7 million / GBP 51.6 million) of the claimed amount comprises compound interest, roughly 84% of the total. The company argues the interest has overtaken the original award by a significant margin.
A valuation by Knight Frank in October 2025 placed the open-market value of 14 Riverside at KES 7.328 billion ($56.7 million / GBP 41.9 million), with a forced-sale value of KES 5.496 billion ($42.5 million / GBP 31.4 million). The company says the claimed debt now exceeds the property’s open-market value, raising questions over the proportionality of enforcement.
Cape Holdings says it is not seeking to reopen the underlying arbitration dispute or overturn previous court decisions. It wants the High Court to determine whether the continued accumulation and enforcement of interest on the decretal amount violates constitutional protections, including the rights to equality, dignity and property.
The company said the petition does not challenge Synergy’s status as a decree-holder. Rather, it wants the court to examine whether the manner in which the decree has been calculated and enforced is constitutionally permissible.
Cape Holdings said attempts to enforce the KES 10.679 billion ($82.6 million / GBP 61.1 million) claim against the entirety of 14 Riverside, and potentially against property belonging to its directors and third parties, amount to a disproportionate interference with property rights.
Its lawyer argued that the statutory exclusion raises a constitutional question under Article 27 of the Constitution, which guarantees equality and freedom from discrimination. He urged the court to determine whether the provision can stand where it treats judgment debts differently from other debts protected by the in duplum principle.
“The petition does not seek to reopen the merits of the arbitration, set aside the award, reverse the Court of Appeal judgement or invite this court to exercise appellate or supervisory jurisdiction over any superior court,” the company said.
“An Act of Parliament that offends the Constitution is unconstitutional,” its lawyer said, urging the court to hear the petition on its merits.
Synergy Industrial Credit has opposed the petition and wants it struck out. It argued the dispute has been before the courts for about 16 years and that all available appeals have been exhausted.
Synergy said the High Court, Court of Appeal and Supreme Court have already determined the dispute, and that Cape Holdings should not be allowed to reopen it through a constitutional petition. It also argued that Cape Holdings no longer has proprietary rights over the property and urged the court to strike out the petition with costs to end the prolonged litigation.
The court will rule on 22nd October 2026 on whether to strike out the petition or proceed to hear the substantive petition.