comp
A nice victory for Telkom as the court orders the state to pay Sh15 billion
Friday, July 21, 2023
The subscriber holds a 4G Telkom SIM card. file image | NMG
A court has ordered the government to pay Telkom Kenya 15 billion Kenyan shillings in compensation for the forcible seizure of its plot of land on Ngong Road in Nairobi and the construction of a sports complex in a major win for the telecom company.
Judge Oguttu Mboya of the Environment and Lands Court ruled that the government violated Telkom’s property rights by appropriating the 60-acre plot without compensating the company.
The judge further stated that the property was owned by Telkom Kenya and that it was entitled to compensation to be borne by the Ministry of Sports.
is reading: Telkom is fighting the state over the property of a sports complex worth 15 billion
But the court suspended the decision for 30 days to allow the public prosecutor to pursue the appeal.
Judge Mboya said the damages for rights infringement would attract 14 percent interest from the date of judgment until full payment is made.
The decision is a nice victory for the company, which was facing mounting financial pressures.
But it is a little late because the Kenyan government now fully owns the telecom company.
The government had planned to acquire the land in 2017 through the National Land Commission (NLC), but the process was derailed by a dispute involving individuals and the Bustle Housing Co-operative who claimed to own the land.
“The petitioner (Telkom) delivers the lease certificate to the Chief Land Registrar within 180 days of its date,” the judge said, adding that the title should be revoked and a new one issued in favor of the Ministry of Sports.
The court dismissed the petitions by Postel Housing Co-operative, Aftraco Ltd and Exclusives Estates Ltd.
Subsequently, the FNC published a newspaper notice in 2017 of the government’s intention of compulsory acquisition of land in order to establish informal Jua Kali operations.
It was quiet until 2019 when Telkom asked the government, via the Public Service Ministry, to withdraw the takeover notice for lack of progress.
One year later, the Ministry of Sports called for bids to build the sports complex known as the Posta Sports Grounds, forcing Telkom to go to court and obtaining orders to stop any works, pending the case’s decision.
The government contracted Dallo Holdings to develop the complex, but they were ordered to halt excavation work, pending consideration of the case.
“The status quo is currently gaining ground with regard to ownership of the claim to be maintained, in particular although the site has been taken over by the contractor, there will be no further excavation, foundation digging, trenching or construction, pending further court orders and directions,” said Justice Ogotu Mboya on December 21.
Despite its discontinuation, the company said the contractor proceeded with construction of the sports facility after setting up a site office and mobilizing drilling machinery and other equipment.
“The above illegal and unlawful actions by the First Defendant and its agents constitute a violation of the Applicant’s constitutional right to property as guaranteed by Section 40 of the Constitution,” Telkom says in court papers.
Telkom said building without a formal compulsory takeover was an illegal and unlawful deprivation of its property rights.
The land was the subject of another case pending before the Supreme Court.
is reading: Telkom Kenya earns billions from Ngong land
The housing association alleged that these initially belonged to the now defunct Kenya Posts and Telecommunications Company (KPTC).
The company later fed part of the land in 1993 and passed it on to Postel Housing Cooperative Society Ltd, to build staff homes. The Housing Society said it paid Sh21 million to acquire the land.
KPTC was dissolved in 1998, creating the Kenya Postal Corporation, the Telecommunications Authority of Kenya and Telkom.
The housing community later approached Exclusive Estates Limited to build townhouses but the project stalled. In 2001, Exclusive Estates brought a case against Postel seeking to recover its fees, which it used to come up with plans for the development.
As the case was pending, Postel agreed in January 2009, to relinquish its interest in the property to Exclusive Estates. Telkom says this was done without its consent or knowledge.
The Supreme Court in 2021 overturned an arbitration award in September 2019 that ordered Telkom Kenya to hand over the 60-acre land to Exclusive Estates Ltd, a company associated with Francis Mburu.
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