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Sweet victory for Telkom as court orders State to pay Sh15bn
Friday July 21 2023
A subscriber holds a 4G Telkom SIM card. FILE PHOTO | NMG
A court has ordered the government to pay Telkom Kenya Sh15 billion in compensation for forcibly taking over its parcel of land on Ngong Road in Nairobi and establishing a sports complex in a major win for the telco.
Justice Oguttu Mboya of the Environment and Land Court ruled that the government violated Telkom’s rights to property by taking over the 60-acre parcel of land without compensating the corporation.
The judge further stated that the property belongs to Telkom Kenya and it was entitled to compensation, which should be borne by the Ministry of Sports.
Read: Telkom fights State over Sh15bn sports complex property
The court, however, suspended the decision for 30 days to allow the Attorney-General to pursue an appeal.
Justice Mboya said the damages for the breach of the rights would attract interest at 14 percent from the date of the judgment until the payment is made in full.
The decision is a sweet victory for the firm that has been facing increasing financial pressure.
But it comes a little late since the Kenyan government now fully owns the telco.
The government had planned to acquire the land in 2017 through the National Land Commission (NLC) but the process was derailed because of a dispute involving individuals and Postel Housing Co-operative who claimed to own the land.
“The petitioner (Telkom) to surrender the certificate of lease to the Chief Land registrar within 180 days from the date hereof,” said the judge, adding that failure to which the title should be cancelled and a new one issued in favour of the Ministry of Sports.
The court dismissed petitions filed by Postel Housing Co-operative, Aftraco Ltd and Exclusives Estates Ltd.
The NLC later published a gazette notice in 2017 of the government’s intention to compulsorily acquire the land for the establishment of informal Jua Kali operations.
The matter went quiet until 2019 when Telkom asked the government, through the Ministry of Public Service, to withdraw the notice of acquisition because there was no progress.
One year later, the Ministry of Sports invited bids for the construction of the sports complex known as Posta Sports grounds, forcing Telkom to move to court and obtained orders stopping any works, pending the determination of the case.
The government contracted Dallo Holdings to develop the complex but they were ordered to stop excavations, pending the hearing of the case.
“That the status quo currently obtaining over and in respect of the suit property to be maintained and particularly though the contractor has taken site, there shall be no further excavations, digging of foundations, trenches or construction, pending further order and directions of the court,” Justice Oguttu Mboya said on December 21.
Despite being stopped, the corporation said the contractor proceeded with the construction of the sports facility after erecting a site office and mobilising excavation machinery and other equipment.
“The aforesaid illegal and unlawful actions of the first respondent and its agents constitute an infringement of the applicant’s constitutional right to property as guaranteed under Article 40 of the Constitution,” says Telkom in court papers.
Telkom submitted that the construction without conducting a formal compulsory acquisition process is illegal and unlawful deprivation of its property rights.
The land was subject to another case, pending before the High Court.
Read: Telkom Kenya to earn billions from Ngong land
The housing society claimed that the initially belonged to the defunct Kenya Posts & Telecommunications Corporation (KPTC).
The corporation later hived part of the land in 1993 and transferred it to Postel Housing Cooperative Society Ltd, for the construction of staff houses. The housing society said they paid Sh21 million to acquire the land.
The KPTC was dissolved in 1998, creating the Postal Corporation of Kenya, Communications Authority of Kenya and Telkom.
The housing society later approached Exclusive Estates Limited to build residential houses but the project stalled. In 2001, Exclusive Estates filed a case against Postel seeking to recover its fees, which it used for coming up with the development plans.
As the case was pending, Postel agreed in January 2009, to assign its interest in the property to Exclusive Estates. Telkom says this was done without its consent or knowledge.
High Court in 2021 nullified an arbitration award of September 2019 that ordered Telkom Kenya to hand over the 60-acre land to Exclusive Estates Ltd, a company associated with Francis Mburu.
