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ELCPartially AllowedPetition No. 169 of 2016 (applicable mutatis mutandis to Petition No. 170 of 2016)· [2016] KEELC 684 (KLR)

African Gas and Oil Company Limited v Attorney General & 3 others [2016] KEELC 684 (KLR)

Environment and Land Court of Kenya
21 July 2016
AOA. Omollo
4,423 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Environment and Land Court let SGR construction continue only after the government deposited nearly Kshs 2 billion in unpaid land compensation into an escrow account.

What this practically means

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Executive summary

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African Gas and Oil Company Limited petitioned alleging violation of its property rights after the Government compulsorily acquired its land (former LR No. MN/VI/4838, comprising seven parcels) for the Standard Gauge Railway and Mombasa Port Area Development Project without prompt payment of compensation. The National Land Commission had awarded Kshs. 159,913,977.00 for land and Kshs. 360,000,000.00 for business interruption, but payment was not made seven months after the awards. The court had granted conservatory orders on 24th June 2016 restraining interference with the suit property; the 2nd and 4th Respondents applied to stay or discharge them, alleging non-disclosure of a notice dated 11th June 2015 issued under section 120(2) of the Land Act, and citing public interest in completing the SGR. Justice Omollo found the three authorities on non-disclosure distinguishable, held that the notice was not properly served because a newspaper advertisement cannot substitute for personal or registered-post service under section 131 of the Land Act, and that most subject parcels were not listed in the notice. The court also noted the Commission had upheld and regularised the Petitioner's title while simultaneously issuing awards, and that no section 117(1) interest-earning account had been opened despite possession being taken in June 2015. Balancing public interest against private rights, the court confirmed the conservatory orders but conditioned them on the Respondents depositing the awarded sums - Kshs. 519,913,977.00 and Kshs. 1,475,486,485.00 (Petition No. 170 of 2016) - in an escrow interest-earning account in the joint names of counsel, after which construction could continue. The 2nd and 4th Respondents' applications were dismissed; the Petitions were to be heard on priority basis, with costs in the cause.

Key legal issues

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01

Non-disclosure of the section 120(2) notice as a ground for discharging conservatory orders

Holding

The conservatory orders should not be discharged on account of non-disclosure because the notice was not properly served and did not list all the subject parcels

Reasoning

Section 131 of the Land Act requires personal or registered-post service; a newspaper advertisement is only an additional mode. The 11th June 2015 notice was not personally served or sent by registered post, so the Petitioner could not be faulted for not disclosing it. Further, save for parcels MN/VI/4737 and 4805, the parcels comprising LR No. 4838 were not listed in the notice, so it could not have been the basis for taking possession of them.

p. 5
02

Entitlement to prompt compensation under Article 40(3) pending full determination

Holding

The Petitioner's rights required securing pending determination of what constitutes prompt payment; the parties agreed compensation was due, disputing only its timing

Reasoning

The court held it could not determine at the interlocutory stage whether there had been denial of prompt compensation, which must await the main Petition. However, the Respondents took possession in June 2015, awards were made in December 2015 and January 2016, no section 117(1) interest-earning account was evidenced, and the explanation of Treasury budget delays was unsupported. The Respondents' rights to possession and the Petitioner's rights to compensation both required accommodation, achieved through the escrow deposit order.

p. 7
03

Whether doubts over the Petitioner's title justified withholding payment

Holding

The Commission's own determinations upheld and regularised the Petitioner's title while awards were simultaneously issued, undermining the claim that title was disputed

Reasoning

The 3rd Respondent had determined the Petitioner's title should be upheld and regularised, yet later characterised the determinations as subject to ratification by the Commission's Plenary. The court found it inconsistent for the Commission to issue awards if it doubted the title's legality, and held these questions formed grounds supporting conservatory orders pending full hearing.

p. 6

Legal principles established

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  • A notice under section 131 of the Land Act must be served personally or by registered post; a newspaper advertisement is an additional, not substitute, mode of service
  • A party cannot be faulted for non-disclosure of a notice that was not properly served upon it
  • Public interest in infrastructure projects must be weighed against the private property rights of individuals

Court orders

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  1. 1.Pending hearing and determination of the Petition and Petition No. 170 of 2016, the Respondents to deposit the total sum of Kshs. 519,913,977.00 awarded in respect of this Petition and the sum of Kshs. 1,475,486,485.00 awarded in Petition No. 170 of 2016 in an escrow interest earning account opened in the joint names of the advocates for the Petitioner, the 2nd Respondent and the 3rd Respondent
  2. 2.The conservatory orders granted on 24th June 2016 confirmed to remain in force until the monies are disbursed in accordance with order (i); upon compliance the Respondents at liberty to continue construction works
  3. 3.The two Petitions to be fixed for hearing on a priority basis
  4. 4.Costs of all the applications ordered in the cause

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 40(3), 40(3)(b)(ii), 40(6), 68(v)
  • Land Act, 2012Sections 111(1), 113(1)(2)(a), 113(2), 115(1), 115(2), 117(1), 120(2), 120(4), 131(1)
  • Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules, 2013Rule 23(1)
  • National Land Commission ActSection 14

Cases cited (6)

  • BP Bhat & Ano vs Habib V. Rajani
    (1958) 1 EA 536
  • Puran Chand Many vs Collector under ILAA
    (1957) 1 EA 125
  • Maisha Nishike Ltd vs Commissioner of Lands & 3 Others
    (2011) eKLR
  • Gaitaru Peter Munya v Dickson Kithinji & 2 Others
    (201) eKLR
  • Kevin Mwiti & Others v Kenya School of Law
    (2015) eKLR
  • Martin Wambora v Speaker of County Assembly of Meru & 3 Others
    (2014) KLR
Jurisdiction invoked
Rule 23(1) of the Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules, 2013; Articles 40(3) and 40(6) of the Constitution

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "African Gas and Oil Company Limited v Attorney General & 3 others [2016] KEELC 684 (KLR)", Case Analysis (2016). Petition No. 169 of 2016 (applicable mutatis mutandis to Petition No. 170 of 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2016/684/eng@2016-07-21

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.