Plans by Kenya Commercial Bank (KCB) to auction the Kololo residence of the late Cedric Ndilima Babu have been halted after the High Court’s Commercial Division issued an interim injunction restraining the sale.

The order, granted on Monday by Assistant Registrar Mastula Mulondo, follows an urgent application by Babu’s mother, Olive Zaitun Kigongo, and his widow, Alison Gallagher, who are joint administrators of his estate.

The court restrained KCB, its agents, and any auctioneers from advertising, selling, transferring, or otherwise interfering with Condominium Unit Number Two at Plot 1, Fumu Lane, Kololo — the family home occupied by Gallagher and the couple’s three children — pending the hearing and determination of the main suit.

In her ruling, the Assistant Registrar held that the estate’s claim raises serious and arguable issues that require full trial.

She noted that while the mortgage agreement placed the primary obligation to insure the property on the borrower, it also included a clause directing renewals through KCB Bancassurance and allowing the bank to automatically renew the policy at the borrower’s cost in case of default.

The applicants argue that had the group mortgage protection insurance policy — arranged via the bank’s bancassurance arm — remained active, the insurer would have cleared the outstanding loan balance upon Babu’s death in May 2025.

KCB maintains that renewal was the borrower’s responsibility and that the cover lapsed in August 2024 due to non-renewal.

The bank had demanded repayment of approximately US$182,710 and signalled its intent to sell the property after issuing demand notices.

The court found that the competing interpretations of the insurance clause create triable issues.

On the balance of convenience, Assistant Registrar Mulondo ruled that selling the home would cause irreparable harm beyond mere financial loss, given that it is the family residence housing the widow and three minor children.

She held that damages would not be an adequate remedy for the estate.

KCB argued the application was defective because the applicants had not deposited 30 percent of the outstanding loan as required under mortgage law before challenging a sale.

The court rejected this, noting that the suit and injunction application were filed before any notice of sale was issued, and emphasised the court’s discretion — particularly where a spouse seeks protection of the matrimonial home.

Costs of the application were reserved to be determined at the conclusion of the main suit.

The ruling provides temporary relief to the family while the substantive dispute over the mortgage insurance policy and the bank’s right to sell proceeds to trial.