Ministry ordered to pay Telkom Kenya Sh15b for disputed land

Telkom Kenya. The Ministry of Sports, Culture and Heritage owes Telkom Kenya Sh15 billion. [File, Standard]

The government through the Ministry of Sports, Culture and Heritage owes Telkom Kenya Sh15 billion as compensation for acquiring a parcel of land in Ngong Road belonging to the telecommunications firm.    

This follows a ruling by Justice Oguttu Mboya of the Environment and Lands Court that Telkom Kenya is the lawful owner of the parcel of land and that the telco is entitled to compensation after its ownership rights were violated.

"Compensation for violation of Telkom's rights over the suit property is assessed in the sum of Sh15 billion as against the first respondent (Ministry of Sports, Culture and Heritage)," says Justice Mboya in the preliminary ruling seen by The Standard.

Justice Mboya further said the damages for the breach of Telkom's rights shall attract an interest of 14 per cent from the date of the judgement until the payment is completed. 

The judge further ordered Telkom Kenya to surrender the title deed for the parcel of land to the Chief Land Registrar within six months for it to be cancelled and issued to the Ministry of Sports and Cultural Heritage. 

The ruling brings to an end a long-standing legal dispute that has seen the Sports Ministry, the National Land Commission, Telkom Kenya and its former employees under the Postel Housing Co-Operative battle over ownership of the multi-billion-shilling property. 

The government through the ICT ministry first informed Telkom Kenya of the decision to acquire the land in 2017 with other interested parties, including Aftraco Ltd and Exclusives Estates Ltd also laying claim to the disputed 90-acre land. 

Arbitration

In 1993, Telkom Kenya agreed to sell 60 acres from the parcel of land to the Postel Housing Co-Operative Society Ltd for Sh21 million.

Justice Mboya rules telco's ownership rights of 90-acre land on Ngong Road were violated. [iStockphoto]

The land was to build 2,430 staff housing units, with Exclusive Estates Ltd appointed by Telkom Kenya as the agents for the project. 

However, the housing units never materialised and Exclusives Estates and Telkom Kenya went into arbitration.

Following the arbitration in 2019, Exclusives Estates was awarded 60 acres out of the 90 acres that the Telco owns on Ngong Road.

Telkom Kenya went to the High Court and successfully set aside the award, which saw the land ownership rights revert to the telco.   

In 2020, the Sports, Gender and Culture Ministry advertised a call for bids for the construction of the Posta Sports Complex on the piece of land.

The multi-million-shilling complex shall host four football fields, one rugby field an athletics running field and gym facilities.

According to Telkom Kenya, the tender was awarded to Dallo Holdings Ltd, which began construction without the consent of the telco. 

"The Ministry of Sports’ construction of their intended sports complex is further deprivation of Telkom Kenya’s constitutional right to property," says the telco in court documents.

"This shall cause Telkom Kenya irreparable loss and damage that cannot be compensated by an award of damages."

In his recent ruling, Justice Mboya granted the Attorney General a 30-day stay of execution and dismissed petitions by Exclusive and Postel with costs to Telkom Kenya.

If no appeal is filed, the ruling could see taxpayers on the hook for Sh15 billion in payments owed to Telkom Kenya by the Sports Ministry.

Last year, Telkom Kenya formerly reverted to a fully State-owned entity after the government paid out Sh6 billion to majority shareholders Helios Investment Partners in a controversial deal signed in the run-up to the August General Election.