Cape Holdings Vows Appeal After High Court Rejects Challenge to KSh 10.6B ($81.7M) Riverside DebtCape Holdings Vows Appeal After High Court Rejects Challenge to KSh 10.6B ($81.7M) Riverside Debt

The ruling matters beyond one property. Cape Holdings is asking the courts to decide whether Kenya's exclusion of court judgment debts from the in duplum rule, which limits how much interest can pile up on certain loans, is constitutional. Lenders, borrowers and property investors with unpaid judgments will watch how far that argument travels.

What the High Court decided

Justice Patricia Mande Nyaundi found that the issues raised in the petition had already been dealt with by other courts, according to Capital FM's report of the ruling The petition was filed in a long-running debt dispute with its lender.

Cape Holdings says it will appeal on the ground that its constitutional questions have not been decided before. The company says it is not trying to avoid its debt obligations and wants the courts to rule on the points it has raised.

The ruling is separate from an earlier decision. On 8 October 2026, the High Court's Commercial Division set aside warrants and auction notices linked to an attempted sale of the complex in May 2026, finding the process run by the lender and Moran Auctioneers defective. Cape Holdings says the latest ruling does not affect that earlier order.

Why the debt grew so large

The interest question sits at the centre of the dispute. An arbitral award against Cape Holdings was set aside in March 2016 and reinstated in November 2020 after an appeal. Cape Holdings argues that interest should not have accumulated during the four years and eight months when the award was not in force.

It is also challenging the rules that exclude court judgment debts from the in duplum principle, arguing that the exclusion is unconstitutional. The principle, in general terms, stops interest from running beyond a set multiple of the original debt. Capital FM's report does not set out how the rule would apply to the figures in this case, so the effect on the KSh 10.6B balance is not yet known.

The value of the property

Cape Holdings argues that the debt should not be enforced against the entire complex. It estimates the property's value at KSh 7.3B ($56.3M), using October 2025 figures, and says the original transaction involved only one block of the development.

If an appeal court accepted that argument, it could limit what the lender can recover from the property, although no such finding has been made. For now, the High Court has declined to hear the constitutional challenge, and the appeal will test whether higher courts see it differently.

Wider lending context

Large unpaid balances tied to prime property are a recurring pressure point for Kenyan lenders. As Mwenendo earlier reported on Absa's sale of its insurance stakes, financial groups are reshaping their balance sheets, and the way courts treat accumulated interest on judgments can change what creditors expect to recover.

Mwenendo also examined how regulators handle firms that owe more than they own in its analysis of Directline Assurance. The Judiciary publishes rulings through Kenya Law, where the full decision and any notice of appeal should appear once filed.

No hearing date for the appeal has been reported.