Court Clears NBK to Pursue Leather and Footwear Manufacturer Zingo Over KSh734 Million Debt

The Nairobi-based leather goods and footwear manufacturer is facing National Bank over a USD5.666 million (KSh 734 million) debt secured against two Industrial Area properties.

A Nairobi leather factory has become the centre of a bruising three-way battle over debt, security and commercial survival.

At the heart of the dispute is Zingo Investments Limited, a leather goods and footwear manufacturer and exporter based on Lunga Lunga Road.

Two creditors are now fighting over assets linked to the company’s Industrial Area business.

Hillbase General Suppliers says Zingo owes it KSh26.34 million for unpaid supplies.

National Bank, meanwhile, says Zingo owes millions of dollars secured against two properties.

On September 1, High Court Judge Justice Peter Mulwa delivered a ruling that strengthened the bank’s position.

He rejected Hillbase’s attempt to stop National Bank from enforcing its security over the disputed properties.

Those properties are L.R. No. 209/8628 and L.R. No. 9363/98.

The ruling did not determine whether Zingo ultimately owes Hillbase the claimed KSh26.34 million.

Instead, it answered a narrower question: could Hillbase stop a secured bank enforcing registered charges?

The judge’s answer was no.

The Supplier

The dispute began with a commercial relationship between Hillbase and Zingo under a February 2, 2004, service agreement.

Under that agreement, Hillbase supplied Zingo with hides and skins.

Hillbase says Zingo eventually stopped paying, leaving an outstanding balance of KSh26,344,685.57.

The supplier also claimed Zingo had offered the disputed properties as security for its obligations.

That claim became complicated because National Bank already held security over those same properties.

Hillbase accused Zingo of failing to disclose the bank’s encumbrances during their commercial dealings.

It said its due diligence produced a CR12 that did not reveal the bank’s interest.

When Zingo later defaulted on its bank facilities, National Bank began enforcement proceedings.

The bank appointed Kollury Venkata Subbaraya Kamasastry as receiver manager.

Hillbase then went to court, seeking to halt the bank’s enforcement process.

It wanted the bank and receiver barred from accessing, controlling or disposing of Zingo’s assets.

The supplier warned that losing the properties could cause irreparable financial harm.

But Justice Mulwa found the application legally insufficient.

The Bank

National Bank presented a stronger security position before the court.

It produced registered charges over both properties, alongside several debentures securing Zingo’s banking facilities.

The bank also pointed to a 2017 consent acknowledging a USD5.666 million debt.

That debt is approximately KSh734 million based on the exchange rate used in the earlier ruling.

National Bank said the debt remained unpaid despite prolonged litigation.

It therefore exercised its contractual rights after Zingo continued defaulting.

The bank subsequently appointed the receiver manager to take control of company assets.

Zingo disputed that position and said its banking facilities had been fully settled.

Its director, Robert Njoka, also denied concealing the bank’s security from Hillbase.

National Bank disputed those assertions, which Justice Mulwa found could not displace its registered securities.

The judge also examined the long-running dispute between Zingo and National Bank.

That battle had already reached the High Court in Commercial Case E102 of 2019.

The High Court dismissed Zingo’s challenge against the bank’s recovery efforts on March 14, 2024.

The Court of Appeal later declined to stay enforcement pending Zingo’s appeal on January 24, 2025.

Those earlier proceedings significantly shaped Hillbase’s latest application.

Security Wins

For Hillbase, the decisive problem was the absence of registered security protecting its claim.

Justice Mulwa found no evidence that Hillbase had perfected any charge over the disputed properties.

There was also no comparable proprietary security registered in its favour.

The judge therefore treated Hillbase as an unsecured creditor whose claim remained contractual against Zingo.

National Bank occupied a fundamentally different position because its charges were registered.

Those charges gave the bank proprietary and contractual rights over the secured assets.

Hillbase had shown no competing interest capable of taking priority over those securities.

That finding ended the injunction application before the court.

Justice Mulwa applied the established principles governing temporary injunctions under Giella v Cassman Brown.

An applicant must first establish a prima facie case before the court considers irreparable injury or balance of convenience.

Hillbase failed at that first hurdle, making consideration of the remaining requirements unnecessary.

The judge found Hillbase had demonstrated a monetary claim against Zingo, but not a proprietary right over its properties.

As the ruling put it, that claim could not “found an injunction” against the secured creditor.

Battle Continues

Justice Mulwa dismissed Hillbase’s application dated May 4, 2026, and discharged previous interim orders.

Those orders had restrained National Bank and its receiver from taking enforcement action against Zingo’s assets.

The costs of the application will abide the outcome of the main suit.

The ruling does not extinguish Hillbase’s KSh26.34 million claim against Zingo.

The supplier remains entitled to pursue its contractual claim against the manufacturer.

But it cannot use that claim to block National Bank’s secured enforcement rights.

That leaves Zingo facing pressure from two separate creditors with competing financial interests.

Hillbase wants payment for supplies allegedly left unpaid since 2020.

READ ALSO: Court Clears I&M Bank to Auction Divyesh Patel’s Properties in KSh2.5 Billion Debt Battle

National Bank wants repayment of facilities backed by registered charges over Zingo’s properties.

The company’s Industrial Area factory therefore sits at the centre of the competing claims.

For now, however, the legal balance is firmly tilted toward the bank.

National Bank holds registered security, while Hillbase does not.

That difference has proved decisive in court.

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