The company operated the hotel, but individuals had charged the land securing its borrowing. That distinction became decisive when the owners tried to use the company's receivership dispute as a reason to stop the bank selling their properties.
Mc Tough & another v National Bank of Kenya Limited & another [2023] KECA 1265 (KLR) is reported as a Court of Appeal ruling of 25 October 2023, Civil Application E095 of 2023. It refused an injunction pending appeal. It was not the final trial of the commercial suit.
Two properties supported the company's borrowing
The applicants had offered two Kisumu properties as security for facilities advanced to the hotel company. One contained a home and the other the hotel. This article omits their precise identifiers.
The bank also held a debenture from the company. After default, the company challenged receivership-related action, while the individual owners challenged the proposed sale under the land charges.
The applicants disputed the balance and described restructuring negotiations and pandemic-related difficulties. The court nevertheless recorded that substantial borrowing remained unpaid and that the charges' existence and validity were not challenged.
Those findings, rather than a general rule about every distressed hotel, shaped the interim decision.
Protection under one agreement did not automatically control another
Paragraph 6 records conditional insolvency relief requiring the company to pay US$20,000 monthly towards its bank debt. Compliance was the applicants' claim, not an independently verified payment history.
The Court of Appeal distinguished that dispute from the applicants' rights and obligations as chargors. Paragraph 31 explains that the company's debenture and the individuals' charges involved different contracts and remedies.
The company's protection therefore did not, by itself, restrain the bank's statutory power of sale under the land charges.
For an owner supporting a business loan, the important question is not simply whether the company has a court order. It is what instrument, parties and enforcement action that order actually covers.
The temporary payment opportunity did not become permanent restraint
The appellate court initially stopped an auction on condition that KSh 375 million be paid to the bank within thirty days of the 19 September 2023 order. The later ruling's paragraph 8 expressly confirms that clock anchor. The principal ruling recorded non-payment and discharged the protection.
That figure was a preservation condition towards the debt, not damages awarded to the owners.
Paragraph 25 gives a mention date of 18 September 2023, preceding the 19 September order whose non-compliance it describes. That calendar conflict remains unresolved; no corrected mention date is invented.
The court accepted an arguable appeal for this application, yet found the second requirement unsatisfied: the owners had not shown that refusal of an injunction would make a successful appeal ineffective. Its reasoning included the available monetary remedy and the bank's ability to meet an eventual award.
The actual order allowed a newly advertised auction
Paragraph 35 dismissed the application with costs to the bank. It allowed a new public auction following due advertisement, without service of new statutory notices.
That case-specific direction is not a general instruction that lenders can dispense with notices. Nor does permission to auction establish that an auction actually occurred.
The court did not quantify an eventual damages entitlement or determine today's debt balance.
Two later applications also failed
The retained 27 October 2023 insolvency ruling, [2023] KEHC 24317, dismissed the company's application as moot in light of the appellate ruling, with costs to the respondents.
In [2026] KECA 587, reported on 13 March 2026, the Court of Appeal dismissed another injunction application with costs to the respondents, treating the renewed litigation as an abuse of process.
The 2026 ruling records the applicants' later claims that the debt was settled and a pre-sale valuation was missing, not findings establishing either proposition. It reports dismissal of the intervening High Court application on 7 February 2025; that ruling was not independently available. Neither later source establishes a completed sale.
Questions before relying on a business-related court order
Which assets belong to the company, and which belong to individual guarantors or chargors? Does the order concern the debenture, a land charge or both? What payment conditions attach to temporary protection, and what evidence records compliance?
These require the actual instruments and Kenyan legal advice, not an assumption that all recovery action is one proceeding.
ArdhiScore screening can organise available source-linked records, dates and questions for official enquiry. It cannot stop an auction, satisfy conditions, certify title or guarantee complete coverage, and does not replace an official search or an advocate.
Explore ArdhiScore screening and its limits.
Independent AI review by Ezra on 11 September 2026 read the retained original web_fetch outputs using the postwriting index, distinct from the writer's selected-cache index. No network requests or new later-history search occurred.
Source hold: principal paragraphs 1-35 are retained, but not the judicial header or signed, dated conclusion. The insolvency ruling was read completely, including its header, paragraphs 1-2 and signed 27 October 2023 closing. Raw text supplies the 2026 ruling's header and opening; paragraphs 1-15 were read, but its signed conclusion is absent. Full-source, access/reuse, privacy/legal and publication clearance remain outstanding; current debt and enforcement are unknown.
Read the principal ruling, paragraphs 24-35; the insolvency ruling, paragraphs 1-2; and the later appellate ruling, paragraphs 12-15.