Reprieve for KCB in loan dispute with beverage distributor

Kenya Commercial Bank (KCB) got a reprieve after the High Court issued an interim inhibition order on an apartment in Nyali area Mombasa, which had been used as a security by a beverage distribution company to secure a Sh30 million loan.

The interim inhibition order restrains Ms Mary Wairimu, the owner of the apartment and a director of Mombasa Tamasha Distributors Company Ltd (MTDCL) which took the loan, from leasing, charging, transferring to third party agents or interfering with the ownership of the land.

Justice Gregory Mutai issued the order pending hearing interparties of an application by the bank for conservatory orders.

In its case, KCB says that at the request and instance of MTDCL, it granted it (MTDCL) a credit facility in form of an SME loan of Sh30 million on or about March 21, 2023, to finance capital requirements.

KCB says that it was a mutual term of the loan agreement that MTDCL would repay the loan within 48 months on a monthly payment of Sh782,671.

The bank also claims that the security for the loan was a simple deposit of the original lease over Ms Wairimu’s apartment on the fourth floor of a building in Nyali.

According to the bank, there was also personal guarantee and indemnity executed by Ms Wairimu, Mr Peter Mukora and Daniel Amani (defendants) who are also directors of MTDCL undertaking to pay on demand all liabilities in connection with the loan.

KCB further argues that it enjoyed a lien over the simple deposit of the original lease instrument and Ms Wairimu also executed an undertaking to charge the property which is recognized as an informal charge.

“The plaintiff (KCB) avers that upon disbursement of the loan, MTDCL made some repayments at the beginning then resorted to making occasional irregular repayments before defaulting in the repayment of the loan completely,” part of the case documents by KCB states.

KCB wants to be granted leave (permission) to commence the exercise of its statutory power of sale over the apartment upon issuing the second defendant (Ms Wairimu) the two mandatory statutory notices.

Through Cootow & Associates Advocates, KCB says that as at February 17, the total outstanding loan balance was Sh22.9 million which continues to earn interest.

It says that various reminders and several correspondence letters have been exchanged with the defendants demanding for payments but have yielded nothing.

“Despite making numerous attempts to have the defendants settle the loan, they have without any reasonable justification wilfully ignored, neglected or refused to comply and settle the outstanding sum,” KCB argues.

KCB says that MTDCL’s acknowledgement of the existence of the outstanding loan vide its letter dated November 27, 2025, is sufficient proof that the outstanding amount due is not denied.

“Demand for payment has been made and notice of intention to sue have been given but the defendants are not keen on paying the outstanding debt,” part of the suit documents state.

The bank is also seeking a declaration of an informal charge over the property, (apartment) located in Nyali, as recognized under the Land Act. It also wants an order for vacant possession of the apartment.

KCB also wants to be granted leave to conduct a valuation exercise of the property and that it be issued with the auctioneers 45-day redemption notice/notification for sale.

Hearing of the application by KCB has been fixed for March 17, 2026.