Nairobi, July 7 -- Local shareholders of Tatu City are mounting a last-ditch effort to reverse an alleged dilution of their stakes by their foreign business partners, even as their shares face the auctioneer's hammer following a recent ruling by Mauritius' highest court.

The latest move has seen Kenyan businessman Steve Mwagiru and Belgian investor Etienne Delbar, through BlackKnight Holdings Ltd, seek permission from the Supreme Court of Mauritius to institute arbitration proceedings before the London Court of International Arbitration (LCIA) on behalf of Manhattan Coffee Investment Holdings Ltd (MCIH), a company currently under liquidation.

Under Mauritius' Insolvency Act, legal proceedings on behalf of a company in liquidation cannot...