Court Stops Absa Bank From Auctioning Two Sigona Commercial Properties
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The High Court in Nairobi has stopped Absa Bank Kenya PLC from proceeding with the auction of two commercial properties in Sigona after a borrower claimed he had cleared his loan arrears.
In a ruling delivered on May 28, 2026, at the Milimani Commercial Courts, the borrower entered into a long-term repayment arrangement structured over 180 monthly installments.
However, after repayment challenges emerged in early 2025, Absa Bank issued statutory notices and demanded immediate payment of the full outstanding balance of approximately Ksh79.9 million.
Borrower Moves to Court to Stop Property Auctioning by Absa Bank
The borrower filed an application before the High Court seeking to stop the planned auction, arguing that although there had been a default, he later cleared the arrears and regularized the loan account before the bank completed its recovery process.
“The Plaintiff/Applicant, John Maina Kinyua, approached this court by way of a Notice of Motion application dated 13th October 2025, primarily seeking interlocutory injunctive orders to restrain the Defendant/Respondent, Absa Bank Kenya PLC, by itself, its servants, or authorized auctioneers, from exercising its statutory power of sale, selling, or alienating the Applicant’s charged properties known as Sigona Title Numbers Sigona/1294 and Sigona/2103,” read part of the ruling.
He further argued that the bank improperly accelerated the entire 15-year loan facility based on a limited default, contrary to the terms of the charge agreement governing the loan.
However, Absa Bank opposed the application, maintaining that the borrower had defaulted on his obligations, including repayments for February and April 2025.
The bank further argued that under the charge instrument, it had the right to recall the full outstanding amount upon default and proceed with enforcement through its statutory power of sale.
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Justice Moses Ado Rules on Auctioning After Loan Clearance
Therefore, in his ruling, Justice Moses Ado noted that the central issue was whether later payment of arrears can stop the auction process once a lender accelerates an entire facility.
Justice Moses Ado found that the bank’s own records showed the arrears had been reduced to zero and the loan account restored to good standing.
The judge held that the statutory power of sale must be exercised strictly in accordance with the law and established equitable principles since the default relied upon to trigger the recovery process no longer existed.
He also warned against selling a property too early when the borrower has already fixed the problem that led to the default.
Court Injunctions to Absa Bank
Justice Moses said such situations need to be properly examined in court before any final decision is made.
The court found that the borrower had shown enough evidence to raise a serious legal question, and therefore, the case needed to be protected until it is fully heard and decided.
As a result, the High Court issued an injunction restraining Absa Bank from selling, transferring, or in any way interfering with the charged properties pending the hearing and final determination of the case.
“Accordingly, the Notice of Motion application dated 13th October 2025 is hereby allowed in the following terms: i. An Interlocutory Injunction be and is hereby issued restraining the Defendant/Respondent, whether by itself, its officers, employees, legal representatives, auctioneers, or any person acting on its behalf, from selling, alienating, transferring, disposing of, or in any other way interfering with the Plaintiff/Applicant’s quiet possession and ownership of the charged properties known as Title Numbers Sigona/1294 and Sigona/2103 pending the hearing and final determination of the main suit,” read part of the ruling.
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A photo showing Absa Bank Counters. Photo/ file