HF Group, varsity take land tussle to apex court
A Sh1.5 billion dispute between Uganda-based Kampala International University and Kenyan mortgage lender, Housing Financing Company (HF Group), has moved to the Supreme Court.
Pending the determination of the dispute, the apex court has barred the mortgage lender from selling three land parcels in Kajiado owned by the university.
The apex court blocked the lender’s intention to auction the lands or enforce an arbitration award made and published by arbitrator Collins Namachanja in September 2019.
The order will remain in force pending the hearing and determination of an appeal filed by the university at the Supreme Court challenging the arbitrator’s decision and ruling of the appellate court that paved way for the sale of the properties by the lender.
The lender is seeking to recover $12,767,508.33 (Sh1,598,492,042) through the statutory power of sale of the properties situated at Kajiado/Kaputiei North.
Eviction danger
A five-judge bench chaired by Deputy Chief Justice Philomena Mwilu found that the amount in contention is considerably large and there is imminent danger of the university being evicted from the said properties as a result of the ruling by the Court of Appeal.
“Bearing that in mind, we are of the view that this would occasion irreparable harm upon the university,” said the court.
The other judges on the bench are Mohammed Ibrahim, Smokin Wanjala, Njoki Ndung’u and Isaac Lenaola.
In 2010, the university undertook the process of construction of the institution in Kitengela, Kajiado County.
Through the Housing Financing company, the university sought a loan of $15 million (Sh1,87. billion) to part-finance the construction.
Due to the size of the debt instrument, HF agreed to syndicate the facility with another financial institution with whom it harmoniously worked previously to fund the balance of $5 million (Sh625.4 million).
HF Group did not syndicate the loan as agreed and disbursement of monies were not made timeously as agreed and no disbursement was made of the last tranche.
As a result, the university’s development came to a halt and contractors deserted the site. The university’s losses continued to accumulate.
The dispute arose between the two parties over the loan facilities and they agreed that the dispute should be resolved by arbitrator Collins Namachanja.
The final award dated September 27, 2019, was that the university pays the lender $12,767,508 (Sh1.59 billion) within 30 days of the date of publication of the award.
The university alleged that it discovered a close relationship between the arbitrator and the lender’s law firm.
For its part, the lender argued that the university failed to plead or demonstrate an erroneous proposition of law on the face of the final award.
At the apex court, the university hinges its appeal on the question of interpretation or application of the Constitution on grounds that its right to a fair hearing was hindered when at the High Court it was not given an opportunity to highlight its submissions.
The institution argues that the said right was not addressed by the Court of Appeal. BY DAILY NATION


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