Court allows investors to auction 26 vehicles over Sh158m owed by Chinese firms

The appellate court in Mombasa has allowed investors to auction 25 vehicles to recover over Sh158 million from Chinese companies.

The court ordered China Communication Construction Company Limited to pay over Sh158 million to Alfred Agunga within 30 days, failure to which 25 cars and other properties would be auctioned.

On June 28, 2024, Justice Wendy Micheni awarded Agunda Sh100,112 768, which accrued interest to Sh158, 703, 973. The Chinese company later obtained a stay order. 

Appellate Judges Gatembu Kairu, Kibaya Laibuta and Ngenye Macharia allowed Agunga to auction the firm's property if the Chinese company fails to offer an insurance bond equal to the Sh158,703,973 from any other reputable insurance company acceptable to both parties, other than CIC.

"In the alternative, the respondent does execute a bank guarantee equal to the decretal sum from a reputable bank acceptable by both parties. The respondent does comply with either of the orders within 30 days of this ruling failure to which the respondent shall be at liberty to execute," said Justice Kairu.

On December 19, 2024, Justice Micheni stayed the judgement that allowed Agunda to recover the said monies pending the Chinese company’s deposits Sh100,112,768 in an escrow account within 60 days.

The Chinese company had failed to offer an insurance bond equal to the decretal sum from any other reputable insurance company acceptable to both parties other than CIC. 

CIC in their letter dated March 7, 2025, confirmed that it does not offer such bond services. 

The Chinese company asked that the consent terms be varied so as to allow any other reputable insurance company to provide the bond, and in the alternative, it be allowed to deposit 25 per cent of the decretal sum.  

"In our view, the respondent would have, in good faith, at least approached the applicant with a view to vary the insurance company after receiving the communication from CIC Insurance. It did not," said Justice  Kairu.  

In his application Agunda said that the decretal sum of Sh100,000,000 would not cripple the Chinese company since its financial statements for January 2025 showed that it had a profit of Sh7 billion. 

He said that, he has acted in good faith while the Chinese company has repeatedly flouted court orders and demonstrated bad faith, hence the consent order should be vacated and he be allowed to recover the decretal sum.  

In March, the parties entered a conditional consent to secure the decretal amount with an insurance bond from CIC Insurance within 14 days. 

However, the Chinese company failed to adhere to the terms of the consent.