Erdemann Property Ltd v Credit Bank Ltd & another (Civil Application E175 of 2025) [2025] KECA 2050 (KLR)
The bottom line
#Kenya's Court of Appeal froze further dealings in a Kshs 1.1 billion auctioned property because the lender's auction may not have followed the Land Act.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the intended appeal is arguable
- 2.Whether, unless the orders sought are granted, the appeal, if successful, would be rendered nugatory
Key legal issues
#Arguability of the intended appeal on the lawfulness of the chargee's purchase of the suit property at its own auction
The court found arguable grounds on the allegation of undervalue sale and non-compliance with section 100(3) of the Land Act
The applicant alleged fraud in that the chargee sold the property to itself at an undervalue. The court found it unclear how the auction of 5th June 2024 was conducted, noting there was no evidence of other bidders or the highest bid price. Given the statutory conditions in section 100(3) for a chargee buying at its own auction, non-compliance was an arguable ground sufficient for the first limb of rule 5(2)(b).
Nugatory value of the intended appeal
Both limbs of rule 5(2)(b) were satisfied because the 1st respondent did not dispute its inability to compensate the applicant in damages
The respondent did not challenge the applicant's contention that, if the appeal succeeded, it would be unable to compensate the applicant, given the property's asserted open market value of Kshs. 2 billion against the respondent's net profit of Kshs. 32.4 million for 2023. The court held the applicant had satisfied both limbs for relief under rule 5(2)(b).
Legal principles established
#- An applicant under rule 5(2)(b) must satisfy the court that the intended appeal is arguable and that unless the orders sought are granted the appeal, if successful, will be rendered nugatory
- Where a chargee purchases charged land at a public auction, strict compliance with section 100(3) of the Land Act must be demonstrated
Court orders
#- 1.Injunction restraining any onward sale, transfer or disposal of the suit property LR 12876/13 (IR 36277) pending hearing and determination of the appeal or intended appeal
- 2.Stay of proceedings before the High Court in Milimani HCComm Case No. E419 of 2022 pending hearing and determination of the applicant's appeal or intended appeal
- 3.If the appeal has not been filed, it be filed and served within fourteen (14) days
- 4.If the appeal has been filed, parties to file and serve submissions within fourteen (14) days, with the appeal listed for hearing on priority basis within sixty (60) working days
- 5.Each party to bear their own costs of the application
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court
- Milimani HCComm Case No. E419 of 2022
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
In an application under rule 5(2)(b) of this Court's Rules, the applicant must satisfy the court that the appeal or intended appeal is arguable, and that unless the orders sought are granted, the appeal, if successful, shall be rendered nugatory.
Where a chargee purchases a charged property at a public auction, it must be demonstrated that the provisions of section 100(3) of the Land Act were strictly complied with. This, in our view, is an arguable ground.
That notwithstanding, it is not in dispute that the suit property has already been bought by the 1st respondent. But we are persuaded that in the prevailing circumstances, it is necessary to inhibit any onward sale or transfer of the suit property pending hearing and determination of the appeal or intended appeal, and we so order.
We also stay proceedings before the High Court in Milimani HCComm Case No. E419 of 2022 pending hearing and determination of the applicant's appeal or intended appeal.
Each party shall bear their own costs of the application.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Erdemann Property Ltd v Credit Bank Ltd & another (Civil Application E175 of 2025) [2025] KECA 2050 (KLR)", Case Analysis (2025). Court of Appeal Application arising from Milimani HCComm Case No. E419 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/2050/eng@2025-11-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.