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ELCPartially AllowedHigh Court Civil Case (as filed 2002, Machakos)· [2020] KEELC 3783 (KLR)

Kenya Power and Lighting Company Limited v Gimalu Health Estate Limited [2020] KEELC 3783 (KLR)

Environment and Land Court
31 January 2020
3,236 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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Kengen's power line stayed, but it must pay a landowner Kshs 3.85 million compensation after a Kenyan court validated a wayleave agreement signed by just one director.

What this practically means

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Executive summary

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The Plaintiff, a licensee under the Electric Power Act, No. 11 of 1997 (repealed), constructed a 220KV transmission line from Olkaria to Nairobi passing over the Defendant's land, L.R. No. 167/9. It relied on a Wayleave Agreement dated 15th March 1998 signed by one of the Defendant's three Directors, the late Mary Nyaguthii Gichuru, and paid Kshs. 1,607 for damaged crops. The Defendant denied the Agreement's validity, asserting the Director lacked Board authority, and counter-claimed for a declaration of trespass, general damages, and special damages of Kshs. 72,140,000, contending the line obstructed a proposed James Gichuru Memorial Academy and violated Section 75 of the repealed Constitution. The court held that the Defendant, having failed to exhibit its Articles of Association, did not prove that a single Director could not bind the company; the Agreement therefore stood and the Plaintiff complied with Section 45(2) of the Electric Power Act. The Defendant's claim for Kshs. 72,140,000 failed because no approved development plans or documents showing the effect of the line on the academy were produced. On quantum, the court held compensation must reflect the 2002 value of the land taken up, adopting the Plaintiff's Tysons Limited valuation of Kshs. 1,200,000 per acre over the 3.21-acre wayleave, totalling Kshs. 3,852,000 with interest at court rates from 15th November 2002. The Plaint and Counter-claim were partially allowed, with a permanent injunction issued restraining the Defendant from obstructing the Plaintiff's works, and each party bearing its own costs.

Key legal issues

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01

Whether the Wayleave Agreement signed by one Director bound the Defendant

Holding

The Agreement bound the Defendant because the Defendant did not prove, through its Articles of Association, that a single Director could not bind the company.

Reasoning

The Agreement was signed by Mary Nyaguthii Gichuru, one of three Directors. DW1 asserted she had no authority, but the Memorandum and Articles of Association were never produced. Since a company is regulated by its Articles, the court could not verify the alleged restriction on a Director's power, so the Defendant failed to discharge its burden of proof.

p. 3
02

Whether the Plaintiff complied with the Electric Power Act in laying the line

Holding

The Plaintiff complied with Section 45(2) of the Electric Power Act (repealed), having given notice and obtained a grant of easement by the Agreement.

Reasoning

The Agreement granted the Plaintiff a right of easement to maintain, alter, use, repair, renew, remove and inspect the electrical line across the suit property. That conduct conformed with the statutory notice-and-entry procedure in Section 45(2). Section 45(3) entitles an owner who objects in writing to compensation as may be agreed upon.

p. 3
03

The quantum of compensation payable

Holding

Compensation assessed at Kshs. 3,852,000, being 3.21 acres at Kshs. 1,200,000 per acre as at 2002.

Reasoning

The suit was filed in 2002, so the relevant value is that of 2002. The Defendant's valuer (DW2) could not state the 1998 value, and his 2012 report valued the land at Kshs. 58 million, which is not the correct valuation date. The Plaintiff's valuation by Tysons Limited gave Kshs. 1,200,000 per acre for 2002; applied to the 3.21-acre wayleave, this yields Kshs. 3,852,000.

p. 4
04

Whether the Defendant proved its claim of Kshs. 72,140,000

Holding

The claim failed for want of documentary proof of the academy project and its associated costs.

Reasoning

The Defendant's claim was broken down in its letter of 23rd September 2002, including consultant costs, waste land, and re-planning costs. However, no approved development plan or site plans were produced, nor documents showing the power line would affect the academy. The claim for consultant costs, waste land and re-design therefore could not be sustained.

p. 4

Legal principles established

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  • A limited liability company is regulated by its Articles of Association; a party alleging that a Director lacked authority to bind it must produce and prove the Articles of Association.
  • Compensation for land taken up by an electric power line is assessed at the value of the land at the time the suit was filed / the line was laid, not at a later date.
  • A party claiming damages for a project allegedly disrupted must produce approved plans and documentary proof of the project and the costs incurred.

Court orders

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  1. 1.A permanent injunction restraining the Defendant from obstructing or stopping the Plaintiff from entering on a portion of L.R. No. 167/9 to construct, lay, connect, repair and/or maintain an electric power supply line thereon
  2. 2.The Plaintiff to pay the Defendant Kshs. 3,852,000 being compensation for a portion of L.R. No. 167/9 measuring approximately 3.21 acres
  3. 3.The Plaintiff to pay interest on the above amount at court rates from 15th November, 2002 until payment in full
  4. 4.Each party to bear its own costs

Authorities

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Legislation

  • Electric Power ActSection 45(2)
  • Electric Power ActSection 45(3)
  • Electric Power ActAct No. 11 of 1997 (repealed)
  • Energy Act2006 (repealing the Electric Power Act)
  • Constitution of Kenya (repealed)Section 75
Jurisdiction invoked
Electric Power Act, No. 11 of 1997 (repealed) and the court's inherent jurisdiction over the suit and counter-claim

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, "Kenya Power and Lighting Company Limited v Gimalu Health Estate Limited [2020] KEELC 3783 (KLR)", Case Analysis (2020). High Court Civil Case (as filed 2002, Machakos). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/3783/eng@2020-01-31

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