The court has restrained National Bank of Kenya from advertising for sale a five-storey building in Nairobi's upmarket Westlands suburb over a disputed Sh655 million debt.

The court order stops NBK from alienating and offering for sale by private treaty or public auction the property pending determination of the dispute.

Shimmers Plaza Ltd, owners of the prime building, say it will not be put up for sale until October 7 when lawyers argue the case before Mr Justice Muga Apondi.

Shimmers claims the sum demanded by the bank is excessive and erroneous.

The firm also says the power of sale exercised by NBK is illegal.

Mr Raj Harish Devani, on behalf of Shimmers, moved to court after the bank issued a notice to sell the property at a public auction.

Shimmers, according to court documents, guaranteed a loan of Sh200 million to sister company Trade Wings, where Mr Devani served as a director, on December 30, 1996.

Mr Devani says the principal amount was Sh150 million, with a working overdraft of Sh30 million, and local bill discounts worth Sh20 million.

According to the agreement, the total amount advanced would not exceed Sh200 million, inclusive of mortgage and interest.

Mr Devani accuses the bank of breaching that agreement.

He says the bank, without any legal notice, unilaterally opened and operated a foreign currency account and a foreign currency loan account belonging to the principal borrower.

This, he says, changed the character of the original facilities. NBK is also faulted for failing to obtain personal guarantees of Trade Wings as stipulated in the original letter of offer.

Mr Devani argues that the bank allowed the principal debtor to exceed an overdraft limit of Sh30 million, adding that he is not the principal borrower.

He says that the Sh655 million demanded by the bank was arrived at erroneously.

The businessman argues that the account records of the bank and those of the principal debtor were not in agreement and wants the bank to be compelled to table the true statement of the loan account.

NBK had issued a statutory notice with three different amounts which it claimed were due.

But Mr Devani claims the notice was contrary to the terms of guarantee.

But NBK says the loan and accrued interest has not been paid and were in arrears going back 14 years.

In 2002, the Court of Appeal stopped the bank from selling the property and directed it to serve Mr Devani with a legal notice.