The High Court has ordered the Government to pay a private company Sh1.5 billion for the Embakasi military land.
Justice George Odunga directed the Government– through the Ministry of Defence–to pay Torino Enterprises Ltd the money.
The court said the State cannot hide under budgetary allocation by Parliament to delay payments.
The judge found the reasons given by the State for not paying the money for the past five years does not hold water as the ministry has not asked for the amount to be included in the budget over the period.
"In my view, the reasons advanced by the respondents for the failure to satisfy the decree are flimsy excuses meant to deny the applicant the fruits of the judgement and I have no reason to decline the grant orders sought herein," the judge found.
The unpaid debt will cost Kenyans an additional Sh734 million after the judge directed that the initial amount be paid with 12 per cent interest from 2011.
Torino Enterprises Ltd moved to the High Court for a second time in a bid to force Defence Principal Secretary Monica Juma to pay up for encroaching on a 90-acre piece of land where the Kenya Army Mine Action Training Centre stands.
In the case filed by Torino Enterprises' lawyer Ezekiel Wafula, Justice Odunga heard that the Government had failed to honour court orders for five years now.
"The respondent (PS Defence ministry) yielded possession. The decree has been served as well as the certificate of order against the Government but the respondent has not honoured the decree," the judge was told.
High Court judge Jean Gacheche, on July 4, 2011 ordered that the Government either surrenders the land to Torino Enterprises or pays the compensation.
"The respondent shall therefore within the next 30 days, restore the possession of the suit land back to the petitioner in the same condition as it was when it was unlawfully acquired or alternatively to pay the petitioner the sum of Sh1, 530,000,000 being the current market value of the said land, as per valuation report produced in court, which valuation and figure was not disputed by the respondent," Justice Gacheche ruled.
Torino's director Bernard Koyyoko said although the court's decree was issued eight days after the judgement the Government has remained silent since.
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The firm acquired the 207 acres in 2000 from Renton Company Ltd at Sh12 million with the intention of building residential houses.
However in 2005, DOD hived off 90 acres to build the training camp. Renton had allegedly bought the land from the Nairobi City Council (NCC).
But DOD, in the 2011 case maintained that it compulsorily acquired the land from NCC.