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ELCPartially AllowedPetition No. 169 of 2016 (applicable mutatis mutandis to Petition No. 170 of 2016)· [2016] KEELC 697 (KLR)

African Gas and Oil Company Limited v Attorney General & 3 others [2016] KEELC 697 (KLR)

Environment and Land Court of Kenya
21 July 2016
AOA. Omollo
4,487 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~18 min to read original · ~4 min brief

The bottom line

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A Mombasa court halted SGR construction on disputed land unless the government first deposited nearly Kshs 2 billion in compensation into a protected escrow account.

What this practically means

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Executive summary

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The Petitioner, African Gas and Oil Company Limited, sought conservatory orders restraining the Respondents from entering, constructing on or interfering with land formerly LR No. MN/VI/4838 (subdivided into several parcels), pending determination of its Petition challenging non-payment of compensation awarded by the National Land Commission for land compulsorily acquired for the Standard Gauge Railway and related Mombasa projects. The Attorney General, Kenya Railways Corporation and China Road & Bridge Corporation applied to discharge the orders granted on 24th June 2016, citing non-disclosure of a section 120(2) Land Act possession notice, public interest in completing the SGR, and daily losses of USD 290,000 for idle labour and USD 86,000 for idle equipment. The National Land Commission contended payment awaited a final determination on the legality of the Petitioner's title and Treasury funds. The court declined to discharge the orders on non-disclosure grounds, holding the 11th June 2015 notice was improperly served (advertisement alone insufficient under section 131) and omitted most subject parcels. Finding the Petitioner's rights required securing and noting no evidence of the statutory interest-earning account, the court ordered the Respondents to deposit the awarded sums (Kshs. 519,913,977 and Kshs. 1,475,486,485) in an escrow interest-earning account within 21 days, confirmed the conservatory orders until disbursement (with liberty to continue construction upon compliance), directed priority hearing of the two Petitions, and awarded costs in the cause.

Key legal issues

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01

Non-disclosure of the 11th June 2015 notice under section 120(2) of the Land Act as a ground to discharge conservatory orders

Holding

Non-disclosure cannot be a ground for discharge because the notice was not properly served and did not list most of the subject parcels

Reasoning

Section 131(1) of the Land Act permits advertisement as an additional mode of service, not the sole mode. The notice was neither served personally nor sent by registered post. Further, save for parcels MN/VI/4737 and 4805, the parcels forming LR No. 4838 were not listed in the notice, so possession over them could not rest on it. The Petitioner therefore could not be faulted for non-disclosure.

p. 5
02

Securing the Petitioner's property rights pending determination of the compensation dispute

Holding

Interim protection of the awarded compensation through an escrow account balances public interest in the SGR project with private property rights, and conservatory orders continue until payment is secured

Reasoning

The Respondents took possession in June 2015 and awards were made in December 2015/January 2016, yet no evidence showed an interest-earning account had been opened under section 117(1) of the Land Act, nor was there documentation supporting the claim of Treasury budget delays. The Respondents, claiming a title dispute, nonetheless retained possession. Pending hearing, the awarded sums must be deposited in escrow and conservatory orders remain in force until disbursement.

p. 7
03

Whether the National Land Commission could withhold payment on the ground that its title determination was subject to ratification

Holding

The inconsistency between doubting the Petitioner's title yet issuing awards is a question for the main hearing and supports conservatory relief

Reasoning

The Commission's determination of 3rd December 2015 upheld the Petitioner's title and directed regularization, yet the Commission contended the decision awaited ratification by the Plenary. The court found it illogical that awards were nonetheless made. This inconsistency could not be resolved at the interlocutory stage but justified preserving the status quo.

Legal principles established

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  • A newspaper advertisement is an additional, not a standalone, mode of service of notices under the Land Act; a notice served only by advertisement is not properly served
  • Public interest in infrastructure projects must be weighed against the private property rights of individuals

Court orders

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  1. 1.Within 21 days, the Respondents to deposit Kshs. 519,913,977.00 (Petition 169 of 2016) and Kshs. 1,475,486,485.00 (Petition 170 of 2016) in an escrow interest-earning account 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; upon compliance the Respondents at liberty to continue construction works
  3. 3.Upon default in compliance with order (i), the conservatory orders remain in force pending hearing and determination of the petition
  4. 4.The two Petitions to be fixed for hearing on a priority basis
  5. 5.Costs of all the applications ordered in the cause

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 40(3), 40(3)(b), 40(3)(i), 40(3)(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)(e)
  • National Land Commission ActSection 14
  • Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules, 2013Rule 23(1)

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

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 697 (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/2016/697/eng@2016-07-21

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