Court orders arbitration over Sh17 billion land rates arrears

Locals storm Tata Chemicals Limited last March 29 in protest over accumulated land rates. [File, Standard]
The High Court has directed arbitration over Sh17 billion land rates arrears the county government is claiming from Tata Chemicals Magadi Ltd.

In a judgement on Monday, Justice Reuben Nyakundi said the best route to resolve the land rates dispute was through arbitration by the National government.

“The petitioner (Tata Magadi) and the first respondent, shall hereby submit themselves to a comprehensive consultative process under the supervision of the Petroleum and Mining ministry with a view of negotiating the amount of land rates payable to the county government since the Finance Act (2014) commenced,” ordered the Judge.

The Judge also ordered that such negotiations should distinguish and determine the exact acreage leased by the company, for which the county government ought to charge land rates.

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The judge dismissed an application by the soda ash miner to have the Finance Act declared null and void.

A declaration that the county’s Finance Act was a nullity would have meant the county government has no legal basis to demand land rates arrears amounting to Sh17 billion, accruing from the 224,991 acres the company holds in lease. The amount is calculated at a rate of Sh14,000 per acre.

The company also wanted Sh17 billion land rates being claimed by Regional Business Connection Ltd, a debt collector appointed by the county government, quashed, arguing the firm was illegally recruited to carry out the assignment.

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The court said it could not determine the legality of the appointment of the debt collector, as that was a matter to be addressed by the Public Procurement Administrative Review Board.

The court further barred the county government or its agents from interfering with operations of the company.

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The order seems to curtail community members and politicians from storming the company, as happened on January 17 and March 29. The protests at the company’s premises in Magadi were led by Governor Joseph ole Lenku and five MCAs.

In court documents seen by The Standard, the company claimed to have lost Sh276 million in revenues since the first community rally was held at the premises on January 17, which it wanted the county government compelled to compensate it. Justice Nyakundi dismissed the prayer, too, saying there was no proof of the loss.

The company had stressed that fulfilling the obligations of the Finance Act would lead to its collapse.

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High CourtTata Chemicals Magadi Ltdsoda ash minerFinance ActGovernor Joseph ole LenkuLocals storm Tata Chemicals Limited last March 29 in protest over accumulated land rates. [FileStandard]