Court orders fresh valuation in Thika land dispute between NCBA, State contractor
The judge further ordered that an independent, court-approved valuer reassess the current market value of the contested Thika property, which had been used as collateral for the loan.
A prime property at the centre of a Sh826 million loan dispute between NCBA Bank and a government road contractor is to undergo a fresh valuation following an order by the Commercial Court.
Justice Benjamin Njoroge also directed the bank to provide the borrower, Westbuild General Contractors Limited, and the loan guarantor, Njowambu (K) Limited, with a detailed statement of account for each loan facility.
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The judge further ordered that an independent, court-approved valuer reassess the current market value of the contested Thika property, which had been used as collateral for the loan.
The case stems from a long-standing banking relationship between Westbuild and NCBA, under which the contractor obtained loans and credit facilities worth nearly Sh890 million, secured by land, guarantees and company assets.
Trouble began in 2020 when the Ministry of Transport abruptly cancelled Westbuild’s road contracts and demanded payment on performance guarantees. NCBA paid out about Sh139 million under the guarantees, which the company argues unfairly inflated its debt and crippled operations.
Subsequently, an arbitration tribunal ruled that the contract termination and recall of guarantees were unlawful, awarding Westbuild compensation. Despite this, in June 2024, NCBA instructed auctioneers to advertise the company’s properties for sale, claiming a debt of Sh826 million.
Westbuild disputed the figures, insisting it owed only about Sh167 million.
In court, NCBA argued that the plaintiffs had defaulted, that all required notices had been duly served, and that performance guarantees are binding and payable on demand. The bank maintained it was not bound by the arbitration award as it was not a party to that dispute.
The Court, however, found that the Ministry of Transport had fraudulently invoked the performance guarantees, as the projects had already been completed and certified. By making payment despite Westbuild’s objections, NCBA was deemed to have acted in bad faith.
The Court granted a temporary injunction for 90 days, ordered reconciliation of the accounts, directed a fresh independent joint valuation of the properties, and required NCBA to issue new statutory notices based on the correct figures.
However, it declined to grant a permanent injunction, noting that part of the loan remained unpaid.
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