Synergy Industrial Credit Limited has filed a fresh lawsuit against I&M Bank Kenya and several of its senior executives, seeking Sh5.77 billion ($45 million) in damages over claims that the lender frustrated its efforts to recover a court-awarded debt tied to Nairobi’s landmark Riverside commercial development.

The latest filing adds another chapter to one of Kenya’s longest-running commercial property disputes, a legal battle that has moved through multiple courts for more than a decade.

Riverside asset at the center of the dispute

Located in Nairobi’s prestigious Westlands district, the 14 Riverside development comprises five office blocks, a parking silo and a major hospitality facility, making it one of the city’s most valuable commercial real estate assets.

The dispute dates back to 2010 when Cape Holdings Limited entered into a sale agreement with Synergy for part of the project.

Under the agreement, Synergy paid approximately Sh577 million ($4.5 million) toward the acquisition of sections of the development. Relations later deteriorated after allegations emerged that construction delays were deliberate and project funds had been diverted.

From deposit refund to multi-billion-shilling award

What began as an attempt to recover a Sh750 million ($5.8 million) property deposit evolved into one of Kenya’s largest debt recovery claims after an arbitrator in 2015 ordered Cape Holdings to refund the money together with an 18% compound annual interest charge.

The award was upheld by Kenya’s Court of Appeal in 2020, causing the claim’s value to swell beyond Sh10 billion ($77.3 million) as interest accumulated over time.

The dispute subsequently moved through Kenya’s High Court, Court of Appeal and Supreme Court as judges considered the exact amount owed and whether Synergy’s claims could take precedence over banking securities attached to the Riverside properties.

Bank administration complicates recovery

Armed with favourable court rulings, Synergy appointed Moran Auctioneers to auction the office blocks in an effort to enforce the decree.

The recovery effort encountered resistance after I&M Bank placed the developer under administration in late 2021, arguing that the Riverside assets had already been pledged as security against a separate Sh2.82 billion ($22 million) loan facility.

Synergy now argues that the bank’s actions obstructed the enforcement of legally recognised claims, while I&M maintains its interests are protected by valid secured lending arrangements.

Two companies at the heart of a landmark case

Founded in 1994, Synergy Industrial Credit has grown into one of Kenya’s leading non-bank asset finance institutions specialising in equipment and hire-purchase financing solutions.

I&M Bank, part of the publicly listed I&M Group Plc, ranks among East Africa’s leading Tier One lenders with operations spanning Kenya, Rwanda, Tanzania and Uganda and a network of more than 60 branches across the region.

The outcome of the Riverside dispute could shape future precedence involving creditor rights, secured lending and commercial property recoveries across Kenya’s banking and real estate sectors.