Telkom Kenya is jubilant following a landmark court ruling that has directed the Kenyan government to pay a staggering Sh15 billion in compensation for forcibly acquiring a 60-acre parcel of land on Ngong Road in Nairobi, where it established a sports complex.
The verdict represents a major victory for the telecommunications giant, as Justice Oguttu Mboya of the Environment and Land Court unequivocally declared that the government violated Telkom's property rights by taking over the land without providing adequate compensation.
"The petitioner to surrender the certificate of lease to the Chief Land registrar within 180 days from the date hereof," ruled Mboya, firmly affirming Telkom Kenya's rightful ownership of the property and the government's obligation to compensate the corporation.
The compensation amount will be borne by the Ministry of Sports, according to the court's decision. However, the implementation of the ruling will be temporarily suspended for 30 days to allow the Attorney-General the opportunity to pursue an appeal if desired.
In addition to the substantial compensation, Justice Mboya decreed that the damages resulting from the government's breach of Telkom's property rights would incur an interest rate of 14 per cent, calculated from the date of the judgment until the full payment is made.
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For Telkom Kenya, the court's ruling comes as a significant relief amid the mounting financial pressures faced by the company.
Nevertheless, the victory comes somewhat belatedly, as the Kenyan government now fully owns the telecommunications firm.
The acquisition of the land dates back to 2017 when the government planned to acquire the parcel through the National Land Commission (NLC).
However, the process encountered delays due to a dispute involving individuals and the Postel Housing Co-operative, both of whom claimed ownership of the land.
In response to the court's ruling, various petitions filed by Postel Housing Co-operative, Aftraco Ltd, and Exclusives Estates Ltd were dismissed, further affirming Telkom Kenya's rightful claim to the contested land.
The matter had remained dormant until 2019 when Telkom Kenya requested the government, through the Ministry of Public Service, to withdraw the notice of land acquisition, citing a lack of progress in the process.
Subsequently, in 2020, the Ministry of Sports invited bids for the construction of the sports complex, known as Posta Sports grounds, prompting Telkom Kenya to move swiftly to court and obtain orders to halt any construction until the case's resolution.
Despite the court order, the government had engaged Dallo Holdings to develop the sports complex, leading to Telkom's accusation that the contractor continued construction activities, disregarding the court's directive.
Telkom argued that this constituted an infringement of its constitutional right to property as guaranteed under Article 40 of the Constitution.
Notably, the contested land was subject to another case pending before the High Court. The Postel Housing Co-operative Society asserted that the land initially belonged to the defunct Kenya Posts & Telecommunications Corporation (KPTC).
In 1993, the KPTC transferred a portion of the land to the Postel Housing Cooperative Society Ltd for staff housing construction, for which the society paid Sh21 million.
However, the KPTC was dissolved in 1998, resulting in the establishment of the Postal Corporation of Kenya, Communications Authority of Kenya, and Telkom.
Subsequently, the housing society entered into an agreement with Exclusive Estates Limited to build residential houses, but the project encountered setbacks. In 2001, Exclusive Estates filed a case against Postel to recover its fees, leading to further complications.
In January 2009, during the pendency of the case, Postel agreed to assign its interest in the property to Exclusive Estates without Telkom's consent or knowledge, adding further layers of complexity to the dispute.
In a significant development, the High Court nullified an arbitration award from September 2019, which had previously ordered Telkom Kenya to hand over the 60-acre land to Exclusive Estates Ltd, a company associated with Francis Mburu.
Telkom Kenya's momentous triumph in court serves as a resounding victory for the company, affirming its rightful claim to the land and holding the government accountable for its actions.
As the 30-day suspension period commences, both Telkom Kenya and the government await the next phase in this high-stakes legal battle.
