Court stops auction of Kuscco assets over Sh108 million debt

The High Court has stopped the auction of Kenya Union of Savings and Credit Co-operative properties a day after auctioneers raided its premises and seized items.

The auctioneers moved in after the Cooperatives Tribunal ordered Kuscco to pay PCEA Ruiru Cooperative Savings and Credit Society Limited a debt of Sh108,849,922.97.

Kuscco had appealed the tribunal’s decision but there were no orders stopping the execution of the tribunal’s judgment.

However, through lawyer Cecil Miller, Kuscco secured orders on Thursday, stopping the auction plan for 30 days as the appeal is heard by the High Court.

“The matter is certified urgent and consequently, stay of execution is granted for 30 days from today,” Justice Linus Kassan said in his orders on Thursday.

Miller had argued that Kuscco was at grave risk of attachment and sale of its assets, a situation he said would cause irreparable loss and devastation to the company and also interfere with the substratum of the appeal if no interim orders were issued.

“Unless urgent interim orders restraining the respondent and their auctioneers are granted, execution will proceed causing irreparable loss,” Miller said.

The debt in question comprises Sh88.95 million in principal sum, Sh13.34 million in interest, Sh6.08 million credited as payments on account, alongside taxed costs and collection fees.

Following the tribunal’s decision delivered on May 28 last year the respondent extracted warrants of attachment dated January 19 and instructed auctioneers to seize and sell Kuscco’s movable assets to recover the outstanding amount.

Auctioneers subsequently issued proclamation notices at Kuscco’s premises on January 21, paving the way for an auction.

Kuscco’s Group managing director Arnold Munene in his affidavits said earlier applications for stay had not attracted interim orders because execution was not imminent at the time.

He said the situation changed abruptly once auctioneers moved in and proclaimed the assets, leaving Kuscco exposed to attachment and sale.

Justice Kassan while granting the stay orders also certified the matter urgent.

The court directed that service be effected within two days and allowed parties seven days to file responses and submissions ahead of an inter partes hearing on February 12.