26-year-old land dispute now goes to Kenya's Supreme Court

When Bidii Kenya Ltd bought 443 acres of land from Kenya Commercial Bank (KCB) in 2007, its directors may not have known their company would be embroiled in a lengthy legal battle that would run for more than quarter of a century.

The 26-year-old dispute, which has been handled by numerous courts and is yet to be resolved, has now been referred to the Supreme Court.

The tussle pits private firms Benjoh Amalgamated Ltd and its subsidiary Muiri Coffee Estate on one side, and KCB and Bidii Kenya on the other.

Benjoh Amalgamated Ltd and Muiri Coffee Estate are associated with President Uhuru Kenyatta’s nephews Ngengi Muigai and Samuel Kung’u Muigai, who are the directors. Between 1988 and 1990, Benjoh Amalgamated Ltd secured a loan from KCB and used the 443 acres in Kiambu County as security. Muiri Coffee Estate secured the loan.

But the company defaulted on repayments and on September 19, 2007, the land was sold at a public auction to Bidii Kenya for Sh70.1 million. It was transferred to them on August 8, 2008.

The matter went to the High Court with Muiri Coffee Estate claiming the land was worth Sh693 million and that the sale was fraudulent. This gave rise to multiple suits as the company attempted to get the land back.

On April 26, 2013, Muiri lost to Bidii Kenya in the Court of Appeal. On September 26, Bidii Kenya went back to the High Court seeking orders to have Muiri Coffee Estate off the land. The order was granted in February this year for Muiri Coffee Estate to vacate the land and hand it over to Bidii Kenya Ltd.

public importance

Muiri Coffee Estate went back to the Court of Appeal with an application for a certificate to move to the Supreme Court and appeal against the decision.

They filed nine grounds for the application but the court identified only one—that the case was a matter of public importance.

The main argument was that various courts had made judgements and rulings to the effect that there existed a consent order dated May 4, 1992 between the parties in the dispute, without a record either in the High Court or the Court of Appeal.

The parties are said to have recorded a consent in the suit in which Muiri Coffee Estate and Benjoh Amalgamated Ltd admitted liability to KCB and undertook to pay the loan by July 31, 1992, failing which the bank would be free to sell the land.

In his affidavit, Mr Muigai, the managing director of Muiri Coffee Estate, claimed in the absence of a record, the Court of Appeal lacked jurisdiction to conclusively make a finding that there was a consent order entered in the High Court.

Muiri Coffee Estate lawyer Paul Muite argued that the question was on what would be the legal consequence where a court of record such as the High Court or the Court of Appeal had no record.

He said the issue went beyond the parties and was a matter of public interest touching on administration of justice.

“A court of record is so called because it keeps a record of its proceedings, rulings and judgements, and it is the record that guides the subsequent applications and direction of the litigation.”

But Bidii Kenya Director Rahul Dilesh Bid said the application did not meet the constitutional threshold to be referred to the Supreme Court.

“The applicant’s claim before the High Court was determined first in 1992 wherein Benjoh Almagated Limited and Muiri Coffee Estate entered into a Consent Judgment admitting the liability of debt to the bank thereby confirming the validity of the charge,” he submitted, saying the application was frivolous and a scandalous abuse of the process of the court and should be dismissed.

KCB lawyer Philip Nyachoti also opposed the application, saying the loan advanced to Benjoh Amalgamated Ltd had never been repaid.

convoluted history

“The long and convoluted history of the current dispute notwithstanding, it was essentially a purely commercial dispute devoid of any uniqueness and devoid of anything that renders it a matter of public interest or importance," Nyachoti said, adding the facts in the dispute had not changed.

The bank's legal manager, Bonnie Okumu, said in his papers that the application was an abuse of court process, vexatious, frivolous, without merit and should be dismissed. The judges noted that the disputed consent had been at the centre of all the proceedings in the cases.

“Upon hearing the submissions made before us by Mr Muite, we cannot but conclude that the issue of the character of superior courts as courts of record and the consequences of absence or incompleteness of the record, where rights are determined with finality on the basis of what ought to be on that very record, is neither shallow nor idle,” they held.

The judges added: “The issue appears to us to have far-reaching consequences and implications on the integrity of the adjudicative processes of the courts."

The judges took issue with the manual systems of record-keeping in the Kenyan courts.

“A long-hand, manual recording of proceedings by the concerned judicial officer as opposed to an independent automated system within built accuracy and integrity safeguards will continue to plague our courts, yet they are, and must remain and be seen to be, courts of record.

They added: Our courts are the people’s courts under our constitutional set up and the people would have an interest in proper proceedings being kept by and available at the courts. It is ironical that the record that ought to accurately, faithfully and authoritatively settle any dispute or controversy as to what may have transpired or been said before a court of law is what is here missing, with the effect that there is a lack of certitude and the controversy rages unable to be halted by the certain word of the record."

The judges ruled that the Supreme Court’s final and authoritative pronouncement would put the drawn-out dispute to rest. They referred it to the Supreme Court last Friday.