Myspace Properties Collapses into Liquidation Over KSh110 Million Debt

More than a decade after a luxury apartment project in Mombasa became the subject of an expensive construction dispute, the High Court has finally drawn a decisive line.

Myspace Properties (Kenya) Limited, the developer behind the One Twiga Apartments in Nyali, has been placed into liquidation after failing to settle a court-recognised debt that had swollen to more than KSh110.7 million.

The latest chapter came this month when the Kenya Gazette formally announced the appointment of insolvency practitioner Waithaka Ngaruiya as the company’s liquidator, transferring control of its business and assets from its directors to an independent officer of the court.

For creditors, the notice marked far more than a procedural milestone.

The notice signalled the start of the final process to identify, collect, and sell company assets before distributing any legally recoverable funds.

Luxury Dream

The liquidation traces its origins to a construction contract signed years earlier between Team Construction Limited and Myspace Properties for works at the upscale One Twiga Apartments development off Links Road in Nyali, Mombasa.

When disagreements emerged over the contract, the parties turned to arbitration instead of prolonged litigation.

An arbitration award issued on September 4, 2014, required Myspace Properties to pay KSh40.74 million to Team Construction under a debt acknowledgement agreement.

That award was subsequently adopted by the High Court as a court judgement on December 15, 2015, giving it the same force as any other judicial decree.

Yet the money never arrived.

Instead, interest accumulated relentlessly while repeated attempts to enforce the decree reportedly met one obstacle after another.

By September 2021, the debt had climbed to KSh110,758,663, prompting Team Construction to issue a statutory demand under Kenya’s Insolvency Act.

According to court records, the creditor had exhausted numerous recovery avenues.

It attempted to attach company property, pursue shares linked to the development and enforce a personal guarantee executed by company director Mwenda Thuranira.

The court noted allegations that execution efforts The court noted that concealed assets, relocated vehicles, transfers to third parties, and interference with auctioneers repeatedly frustrated execution efforts.

Legal Turning Point

Those allegations became central to the judge’s reasoning.

Justice Josephine Mongare found there was sufficient evidence showing that the company had failed to satisfy an undisputed debt despite being given repeated opportunities.

The judge concluded there was “sufficient proof” that Myspace Properties was unable to pay its debts, precisely the situation Kenya’s insolvency laws are designed to address.

Before reaching that conclusion, however, the court first had to resolve a significant legal argument.

Myspace Properties did not dispute the existence of the debt.

Instead, it argued that Team Construction had waited too long to file the liquidation petition.

The company maintained that arbitral awards must be enforced within six years, making the February 2022 petition legally out of time.

Justice Mongare disagreed.

In a carefully reasoned judgement, the court explained that once an arbitral award is recognised and adopted by the High Court, it ceases to exist merely as an arbitration award.

Instead, it becomes a judgement of the court, attracting a 12-year enforcement period under the Limitation of Actions Act.

To reinforce that conclusion, the judge relied on the Court of Appeal’s decision in Patel v Transworld Safaris Limited, which confirmed that time begins running from the date an arbitral award becomes a court decree, not from the date the arbitration itself concluded.

That reasoning proved decisive.

Since the decree had been issued in December 2015, the limitation period would only expire in December 2027.

The petition filed in February 2022 therefore fell comfortably within the statutory window, defeating the company’s principal defence.

Company Unravels

The court also observed another important feature of the dispute.

Despite contesting the petition, Myspace Properties produced no evidence demonstrating an ability to repay the debt, nor any genuine proposal to secure or settle it.

Instead, its case rested almost entirely on the failed limitation argument.

Justice Mongare therefore issued four final orders.

The liquidation petition was allowed, Myspace Properties was placed into compulsory liquidation, the Official Receiver became interim liquidator, and legal costs were ordered to be paid from the company’s assets.

Final Stretch

The July Kenya Gazette notice has now moved the matter into its next legal phase.

Effective April 15, 2026, insolvency practitioner Waithaka Ngaruiya assumed office as liquidator.

Under the Insolvency Act, all affairs, business and property of Myspace Properties are now vested in and controlled by the liquidator, who is authorised to take possession of company assets and exercise powers granted by the court.

Creditors have also been directed to file formal proofs of debt within 60 days for consideration during the liquidation process.

For Kenya’s construction industry, the case carries lessons extending well beyond a single apartment project.

It demonstrates that arbitration awards cannot simply be ignored after receiving court recognition.

Once adopted as judgements, they enjoy the same legal protection as ordinary court decrees, while persistent failure to honour them may ultimately expose companies to compulsory liquidation rather than ordinary debt recovery proceedings.

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For Team Construction, the liquidation order represents a major legal victory after a battle lasting more than 12 years.

Whether it ultimately recovers the full KSh110.7 million now depends on what assets the liquidator identifies, secures and realises.

That process has officially begun, and for Myspace Properties, the courtroom fight has given way to the far harsher arithmetic of insolvency.

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