The Court of Appeal has brought to an end a long and complex legal battle between the Chandaria family, who are shareholders and directors of Guardian Bank, and Shivali Investments Limited, a company linked to businessman Rajendra (Raju) Sanghani.
The court ruled in favor of Shivali Investments, awarding a settlement of Ksh 2.5 billion after a dispute that had dragged on for more than twenty years.
This marks the conclusion of one of Kenya’s longest-running commercial disagreements, which began from a deal made in 1999 involving the sale of shares in Guilders International Bank Limited.
The case originated when Shivali Investments Limited and its associated companies sold 200,000 shares to Guardian Bank Limited and several individuals linked to the Chandaria family.
Those involved on the buyers’ side included Amit, Hetul, Bhavnish, Nisha, and Mahesh Chandaria, along with their companies Conifers Trading Limited, Chandaria Holdings Limited, Dima Limited, Goldera Limited, and Kevis Investments Limited.
The sellers claimed that although they transferred the shares as agreed, they were never paid the Ksh 196 million purchase price.
The Chandarias and their companies, on the other hand, argued that the assets of the bank were overvalued, and therefore, the payment was not justified.
The Court of Appeal, in its judgment delivered on October 3, 2025, by Justices D.K. Musinga, F. Tuiyott, and G.V. Odunga, partly overturned a 2023 High Court decision.
The appellate judges clarified that the binding contract between the parties was the final Sale Agreement signed on December 30, 1999, and not an earlier Memorandum of Understanding.
This conclusion influenced several parts of the ruling, including the decision to cancel the High Court’s award of 12% annual interest.
The court instead directed that the interest should be calculated at the normal court rate from the date the lawsuit was filed.
The court also found that the buyers had failed to meet a major requirement of the Sale Agreement.
They were supposed to make every possible effort to recover the bank’s loans by December 31, 2001, and to inform the sellers of any amounts that could not be recovered.
The buyers were unable to prove that they did this, and the judges ruled that a report they produced in 2014 was too late to be considered relevant to the 2001 deadline.
Because of this, the court dismissed the buyers’ counterclaim, which had sought Ksh 827 million in compensation.
However, the court did note that the sellers were aware of some hidden liabilities. Evidence showed that Mr. Raju Sanghani, representing the sellers, attended a Debt Recovery Committee meeting in June 2000, where Ksh 6,072,346 in undisclosed liabilities was discussed.
The judges ruled that this amount should be deducted from the total award.
The judgment also outlined the specific responsibilities of each group involved. The Chandaria family members and their companies are now jointly required to pay Shivali Investments the Ksh 196 million purchase price plus interest at the court rate.
Guardian Bank, meanwhile, must release and return the securities that had been provided by the sellers, except for four properties whose sale had already been approved.
Additionally, the Chandaria family is responsible for paying three-quarters of the legal costs, while Guardian Bank will cover the remaining quarter.
This ruling not only brings closure to a long legal struggle but also reinforces the importance of honoring contractual terms and timelines in corporate transactions.
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