KCB Bank Hit with Major Setback in Billion-Shilling Land Case
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A long-running legal battle between M’Big Limited and KCB Group over a Sh95 million land auction deal in Naivasha has taken a major turn after a court ruled it has the power to hear the dispute. The case, which began with an auction in 2017, has now escalated into a compensation claim of more than Sh1.3 billion.
The court ruling on KCB land case delivered on October 2, 2025, determined that the Environment and Land Court has jurisdiction to hear the matter, dismissing objections by KCB and Kenya Railways Corporation (KRC). The decision paves the way for a full trial in what has become one of the most closely watched legal disputes involving a major bank and a private company.
Background of the Naivasha land dispute
The case dates back to 2017 when M’big Limited purchased two parcels of land, LR No. 1144/522 and LR No. 1144/583, in Naivasha through an auction conducted by Garam Investments Auctioneers on behalf of KCB Bank Kenya. The company paid Sh95 million for the properties.
The Naivasha land dispute emerged when Kenya Railways Corporation, the head lessor of the property, declined to issue consent for the transfer, citing unpaid land rates and a 2% fee on the purchase price. M’big Limited accuses KCB of conducting the sale without resolving the outstanding rates with KRC.
To finance the deal, M’big Limited took loans from KCB Bank Kenya, securing them with its Bungoma properties. With the transfer blocked, M’big’s investment was locked up, and the company now faces the threat of foreclosure on its assets.
Escalation of the KCB and M’big land dispute
The case has escalated into a Sh1.3 billion claim. M’big seeks:
- A declaration that the 2017 auction is null and void.
- An injunction to stop KCB Bank Kenya from advertising or reselling the Naivasha properties.
- A refund of the Sh95 million purchase price.
- 8 million in penalties related to the loan.
- Over Sh1.24 billion in compensation for lost business tied to distribution deals with British American Tobacco Kenya and Kenya Breweries Limited.
M’big argues that the failed transfer triggered extensive financial damage. KCB maintains that it met all sale agreement obligations and claims the buyer failed to register the titles. KRC insists its refusal was justified due to unpaid land rates.
Jurisdiction arguments and court decision
KCB and KRC argued that the case should be handled by the High Court Commercial Division because it involves enforcement of statutory power of sale and financial claims. They cited precedents including the 2017 Co-operative Bank of Kenya Ltd v Patrick Kang’ethe Njuguna & 5 Others.
M’big Limited countered that the central issue is the failed transfer of property, not the loan. The court ruling hinged on determining whether the matter concerned proprietary land interests or commercial claims.
Justice M.C. Oundo applied the “predominant purpose test” to determine jurisdiction, examining the central issue of the suit rather than the incidental financial claims. The court found that the issue centered on the sale and transfer of land, including prayers to stop the sale, declare the auction void, compel issuance of transfer consents, and discharge securities tied to land.
The judge ruled that the financial claims were incidental and did not strip the Environment and Land Court of jurisdiction. The court decision now allows the case to proceed to a full hearing.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.
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