Hire purchase lender Synergy Industrial Credit Limited has secured a legal victory after the Supreme Court rejected Cape Holdings Limited’s final attempt to overturn a Sh1.6 billion arbitration award, ending the fight for the 14 Riverside property in Nairobi.
In a ruling delivered on Tuesday, the apex court dismissed Cape Holdings’ application and upheld an earlier decision of the Court of Appeal denying the company permission to lodge a second appeal.
This effectively ended the legal dispute that started 10 years ago and cleared the way for the auction of Cape Holdings’ exclusive office block at the property complex, and full recovery of the Sh1.6 billion debt.
The property complex also houses the DusitD2 Hotel. The judges ruled that they lacked jurisdiction to deal with the dispute and that the matter had already been conclusively determined.
“Accordingly, we make the following orders: the Motion… is hereby dismissed, the Court of Appeal’s refusal to grant certification is hereby upheld,” the apex court said.
The dispute originates from a failed transaction for the sale of property known as L.R. No. 209/19436 (IR No. 120877), Nairobi (14 Riverside office block in Nairobi). Synergy had paid a substantial amount of money for a stake in the property before Cape Holdings terminated the partnership. When it collapsed, the row was referred to arbitration pursuant to the parties’ agreement.
In January 2015, the arbitrator awarded Synergy about Sh1.6 billion plus interest at 18 percent annually.
Cape Holdings challenged the award, arguing that the arbitrator exceeded jurisdiction and granted relief not contemplated in the contract. The High Court initially agreed and set aside the award in 2016.
However, the Court of Appeal overturned that decision in 2020, finding that the High Court had improperly delved into the merits of the dispute instead of limiting itself to the narrow grounds allowed under the Arbitration Act.
The Supreme Court had earlier intervened in 2019 to clarify when appeals can arise from arbitration disputes, but it has consistently maintained that such matters must end at the Court of Appeal, except in limited circumstances.
In the latest attempt, Cape Holdings sought to frame the dispute as one of general public importance, arguing that it raised fundamental questions about arbitration, constitutional rights, and the use of foreign legal principles.
Arbitration finality
But the Supreme Court rejected that argument and reaffirmed its strict stance on arbitration finality. It cited its earlier precedent and declared that once the Court of Appeal determines such disputes, no further appeal should ordinarily lie.
“For the avoidance of doubt, we now declare… no further appeal should ordinarily lie therefrom to this Court,” the judges stated citing a precedent.
The court also found that Cape Holdings had repeatedly attempted to reopen the same issues through different legal avenues, violating the principle of finality in litigation.
“Having pronounced ourselves with finality on October 8, 2021, this application is res judicata and cannot be relitigated,” the bench ruled.
Court records show that the award has already been enforced, including attachment of Cape Holdings’ property in Nairobi, and execution processes were completed years earlier.
The ruling is a major boost for Synergy, which has fought for more than a decade to enforce the award.
The case is among high-value disputes testing Kenya’s arbitration framework, particularly on how far courts can go in reviewing arbitral decisions.
