A three-year legal battle over a disputed rent-to-own arrangement at Nairobi’s Senteu Plaza has entered a new phase, with SBS Dunhill Group suing the building’s owners over an alleged unlawful eviction.
The company says the eviction caused massive business losses and the disappearance of property, including 330 kilogrammes of investment gold bars and cash.
The landlords, however, dispute the claims and are seeking to stop the case, arguing that the dispute has already been determined in earlier court proceedings.
At the heart of the long-running dispute is SBS Dunhill’s claim that the parties agreed to a rent-to-own arrangement signed in 2017, under which the company would buy Senteu Plaza after the six-year lease expired. The landlords have denied the claim.
The company says it paid the landlords $8.1 million (Sh1 billion) and a further Sh67 million, covering rent and part of the consideration for the anticipated purchase of the property.
The earlier litigation centred on whether SBS Dunhill had acquired rights to buy the Kilimani office complex after occupying it under the 2017 lease.
Fresh claims
The new suit instead seeks compensation for losses the company says it suffered after it was forced out of the building a fortnight ago.
The latest dispute has also drawn police into the litigation after SBS Dunhill alleged officers were involved in its eviction and later failed to enforce court orders restoring it to the premises.
In a replying affidavit, SBS Dunhill chairman Chris Philip Obure argues that the commercial case raises issues that no court has previously determined.
He says the company is seeking damages for unlawful eviction, business interruption, destruction of office installations, a refund of excess rent and compensation for property allegedly lost during the eviction.
“The present suit is not founded on ownership of the property. The suit seeks compensation for the unlawful eviction and the losses suffered by the plaintiff,” Mr Obure says in the affidavit.
According to the company, property allegedly lost during the eviction included 330 kilogrammes of investment gold bars, cash and other business assets. It also claims it incurred substantial losses after the landlord disrupted its operations.
Mr Obure says the eviction followed years of disagreements after SBS Dunhill claimed the landlords had agreed to sell the building once its lease expired in 2023.
He maintains that the company invested heavily in the property and surrounding infrastructure in anticipation of acquiring the building.
Court records show SBS Dunhill previously claimed it spent about $10 million (Sh1.2 billion), including on improvements inside the building, CCTV installations, landscaping and street lighting along Lenana and Galana roads surrounding the property.
Court setback
The ownership claim, however, suffered a major setback in December last year when the Environment and Land Court found there was no enforceable agreement requiring the landlords to sell Senteu Plaza.
The court held that board resolutions relied on by SBS Dunhill were not incorporated into the lease agreements and therefore created no contractual obligation on the owners.
The court also questioned documents relied on in the dispute after finding that one lease document appeared to bear the signature of a lessor who had already died before it was allegedly executed.
Even after that judgment, the parties continued battling before the Business Premises Rent Tribunal and in judicial review proceedings over possession of the building and the protection of a new tenant that occupied the space previously used by SBS.
Earlier this month, the Environment and Land Court dismissed SBS Dunhill’s attempt to quash the tribunal proceedings, saying the company had not produced sufficient evidence to show the tribunal had acted outside its powers.
Legal hurdle
The landlords now argue that the latest commercial suit should not proceed because the dispute has already been conclusively determined through the earlier cases.
They contend that the fresh proceedings offend the legal doctrines of res judicata and sub judice because they arise from the same transactions and issues litigated before several courts.
SBS Dunhill rejects that argument.
Mr Obure says the previous proceedings dealt with ownership, tenancy and tribunal processes, while the current case concerns compensation for losses allegedly suffered after the eviction.
“The causes of action are distinct and separate,” he says, adding that none of the earlier courts determined the company’s damages claims arising from the eviction.
The High Court is expected to determine whether the damages suit can proceed.
