In a landmark judgment, the Chandaria family, shareholders and directors of Guardian Bank, have lost a long-standing legal battle to Shivali Investments Limited and associated companies owned by Mr. Rajendra (Raju) Sanghani.
The Court of Appeal awarded a settlement of Ksh 2.5 billion in favour of Shivali Holdings and others, concluding a dispute that has stretched over two decades.
The conflict dates back to a 1999 agreement for the sale of 200,000 shares in Guilders International Bank Limited.
The sellers were Shivali Investments Limited and related companies, while the buyers were Guardian Bank Limited and a group of obligors, Amit Chandaria, Hetul Chandaria, Bhavnish Chandaria, Nisha Dinesh Chandaria, Mahesh Maganlal Chandaria, and their firms Conifers Trading Limited, Chandaria Holdings Limited, Dima Limited, Goldera Limited, and Kevis Investments Limited.
The sellers transferred their shares but claimed they never received the agreed KSh 196 million purchase price.
The buyers argued that the bank’s assets had been overvalued.
The Court of Appeal’s judgment, delivered on October 3, 2025, by Judges D.K. Musinga, F. Tuiyott, and G.V. Odunga, partially set aside the High Court’s 2023 decision.
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Open in new tab The appellate bench made several key determinations.
First, it ruled that the final Sale Agreement of December 30, 1999, was the binding contract, not an earlier Memorandum of Understanding.
This finding led the court to cancel the High Court’s award of 12% annual interest, ordering instead that interest be calculated at standard court rates from the date the suit was filed.
Second, the court determined that the buyers failed to meet a crucial deadline.
The Sale Agreement required Guardian Bank and the Chandaria obligors to exhaust all efforts to recover the bank’s loans by December 31, 2001, and to formally notify the sellers of any irrecoverable amounts.
The court found that they had not provided evidence of meeting this obligation. A 2014 report relied on by the buyers was deemed irrelevant for determining the loan status as of the 2001 deadline.
As a result, the court dismissed the buyers’ counterclaim for KSh 827 million.
The appellate judges did recognize one element in the buyers’ case.
They acknowledged that the sellers, through Mr. Raju Sanghani’s participation in a Debt Recovery Committee meeting in June 2000, were aware of Ksh 6,072,346 in previously undisclosed liabilities.
This amount was deducted from the final award.
The ruling places distinct obligations on the two groups of appellants.
The Chandaria-family obligors, Amit, Hetul, Bhavnish, Nisha, and Mahesh Chandaria and their companies, are jointly liable to pay the sellers the principal sum of Ksh 196 million plus court-rate interest.
Guardian Bank Limited was ordered to release and return securities provided by the sellers, excluding four properties whose sales had been approved by the sellers’ directors.
On legal costs, the Chandaria-family obligors must cover three-quarters of the sellers’ expenses, with Guardian Bank liable for the remaining quarter.
