National Bank of Kenya has secured a court order paving the way for the auction of the Nairobi Upper Hill Hotel.

The lender had initiated proceedings to recover a Sh447 million debt owed by hotel owner Geoffrey Wahome Muotia.

Wahome had sought to halt the auction process, arguing his case before the Environment and Land Court.

However, Justice Jacqueline Mogeni dismissed the application, ruling that the court lacked jurisdiction in the matter.

“Given the foregoing, I find that this Court based on the reliefs sought, and a red flag having been raised the earliest, that this Court lacks jurisdiction to proceed further to consider the claim as raised in the plaint and, in the same breath deal with the pending application for an injunction, I down tools,” Justice Mogeni declared.

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The protracted legal battle over the hotel’s ownership has seen Wahome challenge the bank’s actions in multiple courts, including the Court of Appeal.

The judge noted that the property was secured against an overdraft, commercial mortgage, and term loan totalling Sh281 million, excluding interest and charges.

Despite Wahome’s claims of being unfairly treated by the bank, including allegations of being listed on Credit Reference Bureaus, the court found in favour of the lender.

The judge emphasised that the dispute over the loan repayment and the proposed redevelopment of the property should be addressed in the High Court through a challenge to the sale.

The bank has consistently maintained that Mr Wahome has defaulted on the loan, prompting the issuance of a statutory notice of sale.

With the latest ruling, the lender is now free to proceed with the auction of the Nairobi Upper Hill Hotel to recover the outstanding debt.