Nairobi court orders State to pay out Sh1.8b to end 26-year legal battle

NAIROBI: The Government will have to pay Sh1.8 billion to a private slaughterhouse owner in a legal battle that has been in court since 1989.

The Court of Appeal ruled in favour of Halal Meat Products Ltd, owned by Mohamed Ali Modha. In its verdict, judges said an appeal filed by the Government challenging a 2004 award by the High Court on account of it being erroneous could not hold water.

Judges Alnashir Visram, Wanjiru Karanja and Jamila Mohamed ruled that the meat-processing firm deserved compensation, as the Government had utilised the firm’s state-of-the-art abattoir at Bul Bul, Ngong, for four years (between 1984 and 1988) before dropping its intent to purchase it.

“We find that the trial judge properly assessed and awarded the respondent the sum of Sh1,807,772,000, which was inclusive of mesne profits [profits received by a tenant in wrongful possession and recoverable by the landlord] up to October 31, 2004,” the court ruled.

Deal gone sour

The case was sparked by a deal gone sour between the Government and the slaughterhouse.

According to records, the slaughterhouse was constructed using a long-term loan secured from the Government through the Ministry of Agriculture and Livestock Development, and was completed in 1978.

However, it remained closed for six years after the ministry withdrew its veterinary officers after Halal turned down a request to include some Kenya Meat Commission (KMC) officials in the company’s board.

The tide turned in Halal’s favour when the country experienced a severe drought in 1984, forcing the Government to reopen the slaughterhouse to minimise livestock losses. The Government also decided to buy the facility, but on June 10, 1988, it informed Halal’s owner that it was no longer interested in the deal.

The court found that walking out of the agreement did not diminish the owner’s right to compensation over the use of the slaughterhouse.

“The fact that it later reneged on its intention to purchase the abattoir in our view did not dis-entitle the respondent to compensation, more so, bearing in mind that the Government utilized the said abattoir to the exclusion and detriment of the respondent,” the 16-paged decision by the Court of Appeal read.

The court also heard that Halal would have had booming business in the Middle East.

The Government was accused of trespassing, as it operated the slaughterhouse under KMC without paying any occupancy fees. It was further said to have failed to rehabilitate and restore the machinery that forms part of the abattoir, and to clean the compound.

In its defence, the Government argued that the award ought to have been for the four years it used the facility, that is, 1984 to 1988, and not been extended to 2004.

“We find no reason to interfere with the award of professional fees by the trial court,” the Court of Appeal judges ruled.