Tussle between upmarket hotel owner and creditor

The dispute arises from a botched deal signed in 2010 whereby Synergy was to purchase one out of six office blocks on the land occupied by the complex, for the sum of Ksh 703 million. However, in 2011, Synergy sought to terminate the contract and demanded a refund of the monies paid. The parties failed to agree and the matter went to arbitration and Synergy was awarded Ksh. 1.66 billion by the arbitrator for the Ksh 577 million paid, plus interest, forex loss, opportunity cost, loss of business, at a compound interest rate of 18 per cent.   

Cape Holdings contested the award in the High Court and the matter wound its way to the Court of Appeal and the Supreme Court. Eventually, the courts ruled in favor of Synergy. The award has since ballooned to Ksh 5.4 billion. Meanwhile, Synergy has registered a caveat against the single office block it had initially offered to purchase. 

While Cape Holdings acknowledges the caveat and prohibitory order by the court protecting Synergy’s interest, it (Cape Holdings) argues Synergy cannot now purport to sell the entire property to realize the Ksh 5.4 billion award. In an affidavit filed in court, Cape Holdings joint administrators P.V Rao and S.R. Ponangipalli, says the caveat and prohibitory order were not against the entire property but limited to the part of the property in which Synergy had an interest.