The Kampala University campus in Kenya is being sold due to a $15 million debt
An educational complex in Kajiado County, which is owned by Kampala International University (KIU), has been placed up for sale by an auctioneer in order to reconcile a $15 million debt with mortgage lender Housing Finance.
On Monday, Valley Auctioneers issued an invitation for bids to acquire the complex, which is situated on a 61.3-acre parcel of land in Kisaju, approximately 1.5 kilometers from the Nairobi-Namanga Highway.
The incomplete educational complex is composed of a four-story administration block, five five-story tuition buildings that are interconnected, a four-story library, two kitchen and dining blocks, a five-story housing block, and a hostel block.
The complex also includes a five-story guest house, a powerhouse, a storage block, a security officer block, and a four-bedroom bungalow.
The financiers/charges or the auctioneers do not warrant the details, and Valley Auctioneers requested that all interested purchasers view and authenticate them in a newspaper notice. The sale is scheduled to take place on September 19.
In April, KIU’s second appeal in the loan dispute was dismissed by the Supreme Court, resulting in the organization’s failure to prevent the sale of the Kisaju property.
In 2014, the university borrowed the loan to construct its Kitengela campus; however, it defaulted. The university looked to expand into the Kenyan market and acquired the land to construct the Kitengela Campus at an estimated cost of $15 million, buoyed by the success of its existing campuses.
From January 2018, the loan’s compounded interest rate was 9.5 percent. Consequently, KIU is obligated to repay an excess of $24 million.
KIU initially addressed Housing Finance for the loan in 2010, and the agreement was finalized in 2014. The mortgage lender assessed the land as collateral for the loan.
A loan of $10 million was disbursed by the bank in January 2014, as per KIU. However, the remaining $5 million was not disbursed until later.
The university subsequently filed a lawsuit for damages, among other demands, and Housing Finance filed a counterclaim. The arbitrator upheld the counterclaim and ruled in favor of the lender in 2019.
Justice Margaret Muigai dismissed KIU’s subsequent appeal to the High Court, necessitating KIU to take the matter to the Court of Appeal. However, the university was left unsatisfied and escalated the matter to the Supreme Court.
The second appeal was dismissed by a jury of five judges of the Supreme Court in April. The court argued that the matter did not involve any constitutional interpretation that would permit the apex court to exercise its jurisdiction and resolve the case.
“This court has consistently held that the mere claim by a party to the effect that its rights were violated by a superior court for whatever reason, does not bring the intended appeal within the purview of Article 163 (4) (a) of the Constitution,” the United States Supreme Court stated.
The judges also stated that the appeal by KIU did not meet any of the exceptions that would have warranted the court’s assumption of jurisdiction and resolution of the matter.
“We are actually satisfied that the Court of Appeal was appropriately guided by our decisions by declining to grant leave to appeal in the circumstances of this case,” stated Deputy Chief Justice Philomena Mwilu and Justices Mohammed Ibrahim, Smokin Wanjala, Njoki Ndung’u, and Isaac Lenaola.
