East African Cables PLC has suffered a setback in its ongoing legal dispute with Equity Bank (Kenya) Limited, as the Court of Appeal dismissed its application for an injunction.
As a result, the bank will proceed with the sale of four key properties. This development impacts the cable manufacturer, which is grappling with a reported debt exceeding Ksh 2.2 billion.
The Court of Appeal’s decision, delivered by Justices J. Mohammed, Tuiyott, and Nyamweya, upheld a November 11, 2024, High Court ruling that had initially rejected East African Cables’ attempt to halt the property sales. The properties in question—L.R. No. 209/4235, L.R. No. 209/8176, L.R. No. 209/6982/1, and L.R. No. 209/6982/2—were offered as security for the bank facilities extended to the company.
East African Cables had argued that its appeal had prospects of success and that allowing the sale would render the appeal meaningless.
However, the Court of Appeal recognized that while the appeal was “arguable,” the statutory framework under Section 99(4) of The Land Act 2012 provides that any party aggrieved by an improper exercise of the power of sale has a remedy through damages.
The judges emphasised that this principle applies to borrowers who offer property as security and challenge the lender’s actions.
The court further noted Equity Bank’s standing as a “tier 1 bank,” affirming its capacity to compensate East African Cables if the final judgment favours the company.
This ruling effectively clears Equity Bank to exercise its statutory right to sell the properties, with all interim protections discharged.
For East African Cables, this ruling escalates financial pressures and raises the prospect of losing critical assets.