The high court has issued an order permitting the sale of land on Langata Road by United Africa Bank (UBA).
Justice Mabeya ruled that the retailer failed to fulfill its commitment to repay the debt through a Company Voluntary Agreement (CVA).
The judge criticized the company for making “beautiful promises” without tangible action, stating that creditors require substantive and practical proposals.
UBA had initially planned to sell the land last year but postponed the decision when the government indicated its intention to compulsorily acquire the Langata land, with UBA prioritized as the first creditor to be repaid. Despite the government’s announcement, the plan was not implemented.
Uchumi, in an affidavit, argued that the CVA remained valid and had undergone revisions in consultation with creditors.
The company claimed that UBA had not obtained consent from other lenders, such as the government and ICDC Ltd, seeking KES 1.2 billion and KES 116 million, respectively.
UBA countered, asserting ignorance of the alleged meeting and emphasizing the lack of an invitation.
The bank also stated its non-recognition of the revised CVA. Justice Mabeya observed that Uchumi had failed to honor the CVA and had not made efforts to repay creditors.
Additionally, the court noted a significant delay in convening a creditors meeting, and criticized the supervisor for attempting to alter the original CVA to benefit the company. Justice Mabeya concluded, “With such failure, the default clause in the CVA has kicked in.”
