Mahadi Energy Limited has filed an application challenging orders restraining them from interfering with their auctioned properties.
The properties located in Nairobi’s South C and along Juja Road in Pangani were auctioned and sold by Premier Bank over allegations of loan default.
Mahadi has already challenged the legality of the transactions giving birth to the impugned auction exercises conducted on 14th August 2024 and 4th September 2024 vide a petition filed before the High Court in Mombasa.
After the properties were sold, Shabeel Protect Services Limited, the buyer, filed a case in Nairobi and obtained orders restraining Mahadi Energy from interfering with the said property.
Through lawyer Danstan Omari, the company claims that the said orders were obtained without full disclosure to the Court of the pending constitutional petition and the irregularities in the auction process, amounting to material non-disclosure and abuse of court process.
“The ex-parte orders were also obtained by the Applicant/Respondent having willfully refused to disclose that the high Court in Mombasa, a court of similar status with this Court had issued conservatory orders issued by Hon. Justice Gregory Mutai vide a ruling delivered on 7th October 2025, restraining the interference by amongst other parties, the applicant/respondent from trespassing or interfering with the possession and usage of the suit properties by the Respondent/Applicant herein,” Omari submitted.
According to court documents, Mahadi Energy Limited, is a duly incorporated company under the laws of Kenya, engaged in the energy sector, particularly in the importation, storage, and distribution of petroleum products, and owns several valuable properties that form the backbone of its operations and financial stability.
It is alleged that on various dates in the year 2011 up to 2017, the company advanced loan facilities from Premier Bank Limited (an Islamic banking institution formerly known as First Community Bank Limited), totaling approximately Sh 631,558,748.
“These facilities were structured under Islamic finance principles, ostensibly following Sharia Law concepts such as Murabaha (cost-plus financing) and Musharakah (joint venture), which prohibit interest (Riba) and emphasize risk-sharing, profit justification, and ethical dealings,” Omari added.
According to an affidavit by Mahadi Energy Managing Director Ibrahim Hussein Mahadi, the said loan facilities were secured through various legal charges created over the Applicant’s properties.
Mr Mahadi told the court that in settlement of those facilities, the company and him, in his personal capacity, made substantial payments totaling approximately Sh 530 Million.
However, these payments were not reflected in the bank statements provided by the bank in question, leading to an inflated and unjustified claim of outstanding amounts.
The businessman avers that as an Islamic bank, the Premier Bank (formerly First Community Bank) is bound by Sharia principles, which prohibit Riba (usury or unjustified interest) and require that any “profits” be transparently justified based on actual costs, risks shared, and value added, without exploitation.
“Despite repeated demands, the bank in question failed to provide a clear, Sharia-compliant breakdown of the alleged profits or outstanding amounts, rendering the claimed debt unlawful and unenforceable under Islamic finance norms and Kenyan law,” Mahadi added.