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ELECTION 2022

Telkom sues AG over Sh15b land acquired for Posta sports ground

NATIONAL
By Kamau Muthoni | Dec 28th 2021 | 3 min read

Mobile services provider Telkom Kenya has sued Attorney General Kihara Kariuki and the National Lands Commission over a Sh15 billion parcel of land.

In a case was filed on December 15, 2021 before Justice Anthony Mrima, Telkom Kenya is aggrieved by the government’s move to compulsorily acquire 90 acres along Ngong Road to build Posta Sports Grounds.

In its case, the parastatal has also roped in Sports, Culture and Heritage Ministry, arguing that the compulsory acquisition was illegal.

Telkom acquired the contested land from the defunct Kenya Posts and Telecommunication Corporations (KPTC).

“The suit property is currently valued at approximately Sh15 billion and the petitioner (Telkom) is apprehensive that should this honourable court not grant the orders as prayed herein, the first respondent will continue to illegally construct the "Posta Sports Grounds" in further deprivation of the petitioner's constitutional right to property thereby causing the petitioner irreparable loss and damage that is not capable of being compensated by an award of damages,” argues Telkom.

Telkom claims that it has protested several times to the Ministry of Sports, headed by Cabinet Secretary Amina Mohamed, but then it has not responded.

At the same time, it argues that it had not been compensated before the takeover.

“The petitioner was surprised to learn that on June 10, 2020, the first respondent (Sports Ministry) invited tenders for the construction of Posta Sports Grounds on the suit property without its consent or following the compulsory acquisition process,” court papers read.

It is not the first time that the government is seeking to compulsorily acquire the property, sparking court cases.

Court papers show that on September 29, 2017, the Ministry of Public Service, Youth and Gender Affairs gazetted the 90 acres for compulsory acquisition. 

According to Telkom, the same property had been claimed by Aftraco Limited and Exclusives Estates Limited, owned by Francis Mburu Mungai.

In a separate case between Exclusives Estates Limited, Telkom, Postel Housing Cooperative Society Limited, it emerged that the defunct KPTC had signed a deal with Postel to sell 60 acres of the land at Sh21 million.

This agreement was made on January 19, 1993, and Postel intended to build houses for Telkom employees.

Nine days later, Postel signed an agreement with Exclusives Estates Limited to build the houses but the project stalled in 1995.

Thus, the same was not completed, sparking a court case.

In the meantime, Postel assigned its interest to Exclusives Estates Limited in a consent order signed on May 27, 2011. After arbitration, Exclusives Estates Limited was awarded Sh21 million.

On the other hand, Telkom struck a deal with Aftraco on July 5, 2011 for the sale of the same property at a Sh1.5 billion. Aftraco paid Sh152 million as a 10 per cent deposit.

However, the deal fell through along the way, prompting Aftraco to file its own case. 

Aftraco also sought to join the case filed by Exclusives Estates Limited and Telkom challenged Sh21 million awarded to Exclusives Estates Limited.

In the case, Telkom argued Postel illegally transferred the land which was then worth Sh6 billion to Exclusives Estates Limited at a throw-away price of Sh21 million.

Telkom asserted that Postel could not have sealed a deal with Exclusives Estates Limited without KPTC or Telkom’s consent.  

Telkom also argued that Postel needed the ministers to greenlight to transfer its rights.

Exclusives Estates Limited argued that Telkom had no case to challenge the Sh21 million award and said there was no evidence of the current market value of the property.

It argued Telkom could not have struck a deal with Aftraco when there was a caveat on the property.

Justice Ngenye Macharia in April this year set aside the arbitration award to Exclusives Estates Limited pending full hearing of the case.

In Telkom’s new case against the AG, it says that it settled the separate dispute with Aftraco Limited and managed to stop Exclusives Estates Limited’s award.

The judge ordered that the file be transferred to the Environment and Lands Court (ELC). 

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