Veteran lawyer Gitobu Imanyara has lost a decade-long court battle over his Karen residence after the High Court upheld its auction and ordered him to pay Ecobank Kenya Limited Sh91.7 million in outstanding loans.
Justice Freda Mugambi dismissed the former Imenti Central MP’s case challenging the bank’s decision to sell the property, ruling that Ecobank had followed the law in exercising its statutory power of sale.
In a judgment delivered on October 2, 2026, Justice Mugambi said the bank had fulfilled its legal obligations before disposing of the property through a public auction in March 2016.
“I therefore find that the Bank lawfully exercised its statutory power of sale and complied with its duty of care under section 97 of the Land Act. I answer Issue 2 in the affirmative,” the judge ruled.
The property, identified as LR No. 13460/19 in Karen, was sold to businessman Opondo Isaac Ochieng for Sh47 million after Imanyara failed to clear loans advanced to him by the bank.
The dispute originated in 2009 when Ecobank extended financial facilities of Sh33.5 million to Imanyara, comprising a Sh11 million term loan and a Sh22.5 million mortgage facility.
The mortgage was intended to finance the construction of a residential house on the Karen property, which was subsequently charged to the bank as security for the facilities.
However, Imanyara fell behind on repayments, prompting the bank to issue a statutory notice in March 2013 demanding payment of the outstanding debt.
The parties later entered negotiations, with the bank giving the lawyer an opportunity to identify a private buyer for the property and use the proceeds to settle the outstanding loan.
In a letter dated June 6, 2013, Ecobank allowed him two months to find a purchaser, warning that it would proceed with recovery measures if no progress was made.
Imanyara argued that the arrangement prevented the bank from proceeding with a public auction, but the judge rejected his interpretation.
The court found that the two-month arrangement had expired on August 6, 2013, without a buyer being presented.
Justice Mugambi observed that the bank had expressly reserved its right to pursue recovery proceedings if the private-sale arrangement did not materialise within the agreed period.
The judge further noted that Imanyara subsequently applied for and accepted an enhancement of his loan facility, signing additional security documents.
Another major issue was whether Ecobank obtained the best price reasonably available when it sold the property.
The bank presented two forced-sale valuations conducted in July and August 2015, placing the property’s value at Sh37 million and Sh36.375 million respectively.
Imanyara, however, relied on a valuation placing the property at Sh76.5 million, arguing that the bank had sold it below its actual value.
Justice Mugambi rejected the argument, noting that the lawyer had failed to produce the valuer who prepared the report to testify.
The judge found that there was no evidence that a higher offer had been rejected or that the bank and auctioneer had colluded to depress the property’s price.
“The burden of showing that the market had risen in that period, and that a better price was reasonably obtainable, rested on him under section 107 of the Evidence Act,” the judge stated.
She added that Imanyara had not presented evidence demonstrating that the property could have fetched a higher price at the time of the auction.
The court also rejected his challenge to the ownership of the property by Ochieng, finding that the businessman had purchased it in good faith and without knowledge of any dispute between Imanyara and the bank.
Ochieng had paid a deposit of Sh11.75 million at the fall of the hammer but failed to clear the remaining balance within the stipulated 90 days.
Ecobank subsequently extended the payment period, allowing him to complete the transaction and settle the purchase price together with a late payment fee of approximately Sh1.9 million.
Imanyara had argued that the delayed payment invalidated the transaction and that the subsequent financing arrangement between Ecobank and the buyer compromised the auction.
However, Justice Mugambi found that the bank had discretion to extend the payment period and that the financing arrangement did not undermine the fairness of the sale.
“The financing could not have influenced the price, which was fixed by the bidding,” the judge ruled.
She further found that no evidence had been presented to demonstrate fraud, collusion or an illegal transaction in the transfer of the property.
On the outstanding loan, the bank had sought Sh91,759,103.66, representing the balance after applying the net proceeds from the auction to Imanyara’s account.
The lawyer challenged the computation, arguing that the bank had violated the in duplum rule under Section 44A of the Banking Act, which limits the amount recoverable from non-performing loans.
However, the court found that Ecobank had produced certified statements of account supporting its computation and that Imanyara had failed to identify specific errors in the records.
“I find the balance of KShs.91,759,103.66 as at 10th July 2017 proved and within the statutory limit,” Justice Mugambi ruled.
The judge, however, declined to award the bank additional contractual and penal interest dating back to July 2017, noting that the claim would exceed the statutory limits.
She instead awarded interest at court rates from the date of judgment until payment in full.
In her final orders, Justice Mugambi dismissed Imanyara’s re-amended plaint dated April 13, 2021, and allowed Ecobank’s counterclaim.
The court ordered that judgment be entered in favour of the bank for Sh91,759,103.66, with interest at court rates until the amount is fully paid.
Imanyara was also ordered to pay the costs of his suit, Ecobank’s counterclaim and Ochieng’s costs of the proceedings.
