The High Court has dismissed an attempt by a supplier to stop the National Bank of Kenya (NBK) and its appointed receiver manager from taking control of a leather-processing business linked to Zingo Investments Limited.
The court ruled that Yobesh Kenya Ontiria, trading as Hillbase General Suppliers, had shown only a contractual claim for Sh26.3 million and no registered security interest capable of overriding the bank’s rights.
NBK, which is owned by Nigeria’s Access Bank Plc after being acquired from KCB Group in May 2025, is pursuing recovery of Sh733 million from the leather processor.
The dispute centres on two Zingo Investments’ properties charged to NBK, which the supplier claimed had also been offered as security for payment of his outstanding debt.
The case pits an alleged unpaid hides-and-skins supplier against a lender seeking to recover a larger debt from Zingo, whose business and assets are under receivership.
Mr Ontiria told the court that he entered into a service agreement with Zingo on February 2, 2004, for the supply of hides and skins. He said Zingo stopped paying him in 2020, leaving Sh26.3 million outstanding.
He claimed Zingo had offered two land parcels as security for payment. He alleged the company failed to disclose that the properties were charged to NBK, saying a company search document obtained during due diligence did not reveal the encumbrance.
He maintained that Zingo subsequently defaulted on its loan obligations to NBK, thereby exposing the properties to auction, and that the bank appointed a receiver manager.
In an application dated May 4, 2026, Mr Ontiria sought orders restraining NBK and the receiver-manager from accessing, possessing, managing, selling or disposing of the properties, factory and business.
However, the court has found that the alleged business arrangement had not been converted into a registered charge or enforceable proprietary interest.
“The difficulty with the applicant’s case, however, is that no evidence has been placed before the court demonstrating that the alleged security was perfected by the creation and registration of a charge or other proprietary security in its favour. On the material presently before the court, the applicant’s claim against the first defendant (Zingo) remains essentially contractual,” the court said.
It added that Mr Ontiria was an unsecured creditor whose remedy lies in pursuing the debt against Zingo Investments.
The court also said that Mr Ontiria had not demonstrated “any registered or enforceable proprietary interest” capable of taking priority over NBK’s securities.
According to the court, a monetary claim against Zingo arising from the alleged breach of the service agreement cannot find an injunction restraining a secured creditor from enforcing its registered securities.
NBK opposed the application, relying on registered charges over both properties and several debentures. Its representative said Zingo had persistently defaulted despite acknowledging a debt of $5.6 million (Sh730 million) in a consent recorded in 2017.
The bank said it had issued demands and notices before appointing the receiver under its contractual rights. It argued that the supplier’s unsecured claim could not prevent enforcement of securities held by the lender.
Zingo, through director Robert Njoka, denied concealing the bank’s interest. The company said it was undertaking a technical and forensic audit of its accounts, transactions and obligations.
It maintained that NBK’s facilities secured against the properties had been fully settled and that the assets were unencumbered. The court said that assertion was disputed and could not, at this stage of Mr Ontiria’s case, displace the bank’s registered securities.
The court noted that NBK’s recovery rights had featured in litigation between Zingo and the bank. In March 2024, the court dismissed Zingo’s challenge to recovery efforts, while the Court of Appeal declined to stop enforcement in January 2025.
Although Mr Ontiria was not a party to those proceedings, the court said it had to be cautious about allowing an unsecured creditor to interfere with rights arising from securities litigated previously.
“In the circumstances, I am not satisfied that the applicant has demonstrated an apparent legal or equitable right over the suit properties which has been infringed or threatened with infringement by the second defendant (NBK) and third defendant (Receiver Manager),” said the judge.
The court dismissed Mr Ontiria’s application and discharged interim orders restraining NBK and the receiver.
The ruling did not determine whether Zingo owes Hillbase the claimed Sh26.3 million. It also did not conclusively resolve Zingo’s assertion that its banking facilities had been settled.
