The recent High Court decision arising from the dispute between former Cabinet Secretary Raphael Tuju, Dari Limited and the East African Development Bank (EADB) has once again brought into focus the delicate balance between borrower protections and the finality of statutory sales under Kenyan law.

The dispute arose from a loan facility advanced by EADB to Dari Limited in 2015, secured by several properties associated with Mr. Tuju, including Tamarind Karen, Dari Business Park and Entim Sidai Wellness Sanctuary. Following alleged default, the lender moved to exercise its statutory power of sale under the Land Act in an effort to recover the outstanding debt, reportedly amounting to approximately Kshs. 4.5 billion.

Tamarind Karen and Dari Business Park were eventually sold through auction to Ultra Eureka Limited in 2024 for approximately Kshs. 450 million. Mr. Tuju subsequently challenged the sale before the High Court, arguing, among other things, that the lender had breached the loan agreement, relied on questionable valuations and sought to recover amounts far beyond the principal advanced. He further sought to halt or reverse the sale of the properties.

The High Court, however, declined to interfere with the completed sale of Tamarind Karen and Dari Business Park, holding that Mr. Tuju’s equity of redemption had been extinguished upon completion of the auction and transfer of the properties. The court reportedly observed that once such a sale has taken place, the remedy available to an aggrieved chargor lies in damages under Section 99 of the Land Act rather than reversal of the completed transaction. The court nevertheless granted temporary relief in respect of Entim Sidai Wellness Sanctuary on condition that Mr. Tuju deposit Kshs. 50 million in court within thirty days.

Beyond the public interest generated by the dispute, the decision is significant for what it reaffirms in Kenyan property and banking law. At the heart of the matter lies the doctrine of equity of redemption, a long-established principle which grants a chargor the right to redeem charged property by settling the outstanding debt before completion of a lawful sale. Kenyan courts have consistently protected this right, particularly where lenders fail to comply with statutory requirements relating to notices, valuation and procedure.

However, as the Tuju decision demonstrates, the equity of redemption is not indefinite. Once a lawful auction has been concluded and transfer effected to a third-party purchaser, courts are generally reluctant to unwind the transaction. At that stage, the chargor’s remedy may shift from recovery of the property itself to a claim for damages against the lender.

This position is reflected in Section 99 of the Land Act, which protects purchasers who acquire property through the exercise of a chargee’s statutory power of sale. The rationale behind this protection is rooted in commercial certainty. If completed auctions were easily reversible, lenders would face significant challenges in realizing securities, while prospective purchasers would hesitate to participate in auctions for fear that their titles could later be invalidated through litigation.

The decision therefore reinforces an equally important principle in Kenyan property law: the protection of bona fide purchasers for value. Courts have traditionally exercised caution before invalidating completed statutory sales, particularly where property has already been transferred to third parties. Unless fraud, illegality or serious procedural impropriety is demonstrated, the law leans toward preserving the integrity and finality of registered transfers.

The case also highlights the important distinction between restraining an intended sale and attempting to reverse one after completion. Courts are generally more willing to intervene before an auction takes place, especially where there are allegations of defective statutory notices, undervaluation or non-compliance with the Land Act. Once the hammer falls and transfer is completed, however, the threshold for reversing the transaction becomes considerably higher.

At the same time, the decision should not be interpreted as diminishing the obligations imposed on lenders exercising statutory power of sale. Chargees remain bound by the procedural safeguards set out under the Land Act, including the issuance of statutory notices, obtaining proper valuations and acting in good faith throughout the realization process. Failure to comply with these obligations may still expose lenders to damages or judicial intervention before completion of the sale.

Ultimately, the Tuju case is more than a high-profile property dispute involving a former public official. It is a significant reaffirmation of the principles governing statutory power of sale, the limits of the equity of redemption and the protection afforded to third-party purchasers within Kenya’s secured lending framework. By declining to reverse a completed transfer, the High Court underscored the importance of certainty and finality in property transactions, principles which remain central to the functioning of Kenya’s banking, conveyancing and commercial sectors.