NAIROBI, Kenya, Aug 6 – The Court of Appeal has dismissed a Sh185.5 million refund claim against the Central Bank of Kenya (CBK) by a defunct Malaysian company over the aborted sale of the Grand Regency Hotel, ending a civil dispute that has lasted nearly three decades.
In a judgment delivered on July 31, 2026, Justices Joel Ngugi, Nduma Nderi and Katwa Kigen ruled that Westmont Holdings Sdn. Bhd. lacked the legal capacity to continue the suit after it was wound up.
The court further held that the disputed funds were lawfully appropriated by CBK to offset the liabilities of Exchange Bank Ltd.
The suit, filed in October 1998 by businessman Kamlesh Pattni and Westmont Holdings, sought a refund of Sh185.5 million, claiming the money was a 10 percent stakeholder deposit paid towards the proposed purchase of the Grand Regency Hotel by Lynwood Development Ltd.
However, the appellate court found that the funds, paid by Pattni in May 1997, formed part of a wider Sh2.1 billion agreement to redeem the charge over the hotel and were not a refundable stakeholder deposit.
“Westmont Holdings SDN. BHD., having been wound up, lacked capacity to prosecute the suit… the deposit of Kshs.185,500,000 was lawfully appropriated by CBK in discharge of Exchange Bank Ltd’s liabilities and was not refundable,” the judges ruled.
The court also found that Lynwood Development Ltd had been improperly introduced into the proceedings without leave, rendering part of the suit incompetent, while dismissing CBK’s counterclaim for lack of proof.
During the hearing, Jasmine See, who testified as attorney for Westmont Holdings and Lynwood Development Ltd, acknowledged under cross-examination that Westmont had been liquidated in May 2002 but had continued acting under a power of attorney despite the company’s dissolution.
Former CBK director Kennedy Abuga told the court the money had never been held in trust, saying it was received under agreements with Pattni to redeem the charge over the Grand Regency Hotel.
His testimony was supported by CBK finance official John Githongo, who produced ledger records showing the funds were used to reduce Exchange Bank’s liabilities.
The dispute stems from the Grand Regency Hotel, one of the assets linked to the Goldenberg scandal. In 2008, Pattni surrendered the hotel to CBK as part of an agreement to settle about Sh2.5 billion owed through Exchange Bank.
The regulator later sold the hotel to Libyan investors for about Sh2.9 billion, a transaction that triggered public controversy and prompted the appointment of the Cockar Commission of Inquiry.
The legal dispute also passed through several appellate stages.
In 2021, the Supreme Court certified the matter as one of general public importance after overturning an earlier Court of Appeal decision, paving the way for the appeal that has now brought the long-running civil case to a close.
