May 27, 2022
Nairobi County Governor Anne Kananu in her office (Undated)
  • Part of the Nairobi City County Government assets are set to be auctioned over a Ksh4.3 billion defaulted loan.

    In a verdict delivered by the High Court sitting in Nairobi, a top financial institution has been granted the clearance to seize and auction assets belonging to Governor Anne Kananu’s administration.

    Justice Chacha Mwita, while making the ruling, dismissed the application submitted by the county challenging the amount awarded to the financial institution by an arbitrator back in November 2019, setting the stage for the auctioning.

    The move follows the continued default on the loan even after the court directed the county government to clear the debt to avoid facing the auctioneer’s hammer.

    Nairobi County Governor Anne Kananu in her office (Undated)

    “In the circumstance, therefore, having considered the application, the response, and submissions as well as the law and the decisions relied on by parties, and upon giving due consideration to all those, the conclusion, I come to is that the application dated 2nd October 2020 has merit,†Justice Chacha Mwita ruled.

    Justice Mwita further dismissed the county’s application to have the award given by the arbitrator set aside, arguing that the devolved unit did not provide a detailed application as to why that should happen.

    City Hall has been in court battling the possibility of being auctioned since 2014. It inherited the loan that had been acquired by the defunct Nairobi County Council.

    Another bank moved in to save Nairobi County in 2014 by agreeing to buy the loan and in return offering better terms on the credit facility.

    However, the county continued defaulting on the loan making the court to award the bank Ksh4.29 billion in 2019.

    Justice Mwita said the law demands that an arbitral award be recognised as binding and enforced after court’s approval.

    On the defense, the county assembly argued that it was not granted an opportunity to be heard regarding the case thus ended up being condemned unheard.

    “The sums awarded to the applicant are significant. As such, it is necessary for the applicant to recover these amounts,†the bank stated after being granted clearance to seize and auction the assets.

    The decision spells doom for City Hall which has been struggling with financial issues. Recently the services were brought to a halt following the ballooning wage bill and failure to pay workers.

    An exterior shot of the City Hall front entrance In Nairobi City. Thursday, February 20, 2020
    City Hall front entrance in Nairobi City. Thursday, February 20, 2020. The building houses the Nairobi County Assembly.
    Simon Kiragu

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