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ELCPartially AllowedEnvironment & Land Petition 3 of 2022· [2023] KEELC 16005 (KLR)

Colfax Holdings Limited v National Land Commission

Environment and Land Court
6 March 2023
6,331 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 ordered the National Land Commission to pay Colfax Holdings KShs 359 million plus interest for land acquired in 2015 without prompt compensation.

What this practically means

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Executive summary

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Colfax Holdings Limited petitioned the Environment and Land Court at Kwale alleging that the National Land Commission infringed its constitutional right to prompt and just compensation under Articles 27, 40 and 47 after compulsorily acquiring parcels MN/VI/29437/63/65/66/67/68/69/70/71/72 for the Mombasa Southern Bypass project. The petitioner sought Kshs. 615,422,500 based on a Burn and Fawcett valuation plus interest at the CBK base lending rate from 2014. The Commission admitted the compensation remained unpaid, attributing this to complaints from squatters, KeNHA and the County Government of Mombasa, an alleged dispute over title legality, and subsisting injunctions in Mombasa ELC No. 405 of 2017 (Kahia Transporters). The court, per A.E. Dena J, held the petition met the Anarita Karimi threshold. It perused the ELC 405 of 2017 file and found the suit properties were neither parties to nor listed in the injunction, and concurred with a ruling in ELC 206 of 2016 rejecting the adverse possession claim. None of the section 115 Land Act exceptions applied, and there was no proof an award was offered and rejected. Withholding compensation was therefore unlawful and infringed the petitioner's article 40 right. On quantum, the court rejected the Burn and Fawcett valuation as unconvincing and fixed just compensation at Kshs. 359,105,371 per the Commission's schedule to KeNHA, holding compulsory acquisition should not be an opportunity for profit-making. The petition partially succeeded: a declaration of contravention was issued, the Commission was ordered to pay Kshs. 359,105,371 forthwith with interest at the CBK base lending rate from 2015 (the date of possession, not 2014), and costs were awarded to the petitioner.

Key legal issues

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01

Constitutional petition threshold

Holding

Petition satisfied Anarita Karimi Njeru threshold as it identified the violated articles, the violator and the manner of violation

Reasoning

The court applied Rule 10(1) of the Mutunga Rules and held the petition clearly pleaded articles 27, 40 and 47, named the NLC as the responsible institution and described the infringement as acquisition without prompt and just compensation.

p. 5
02

Lawfulness of withholding compensation

Holding

Withholding was unlawful; none of the exceptions in article 40(6) or section 115 of the Land Act applied, and the injunction in ELC 405 of 2017 did not cover the suit properties

Reasoning

The court perused the ELC 405 of 2017 file and found the suit properties were not parties to nor listed in the injunctive orders. The adverse possession claim against the petitioner had been rejected in a ruling the court was persuaded by, and no proof existed that an award was offered and rejected.

p. 9
03

Quantum of just compensation

Holding

Just compensation fixed at Kshs. 359,105,371 per the Commission's compensation schedule to KeNHA, not the petitioner's Kshs. 615,422,500 valuation

Reasoning

The court found the Burn and Fawcett valuation unconvincing for lack of comparables and explanation, noted the Commission is mandated to determine values, and observed the Commission did not disown the schedule. Acquisition should not be an opportunity for profit-making.

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Commencement date of interest

Holding

Interest under section 117 of the Land Act runs from the date of taking possession, which was 2015, not 2014

Reasoning

Section 117 provides interest is payable from the time of taking possession until payment. The petitioner's letter of 15 June 2015 showed possession had not yet been taken as at that date, so interest was computed from 2015.

p. 11

Legal principles established

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  • A petitioner must set out with reasonable precision the violation alleged, the violator, the manner of violation and the constitutional provision infringed
  • Where land is compulsorily acquired, full compensation must be paid promptly unless a statutory exception under section 115 of the Land Act applies
  • Just compensation is that assessed and determined through the criteria set out under the Land Act; compulsory acquisition is not an opportunity for profit-making
  • Submissions cannot take the place of evidence

Court orders

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  1. 1.A declaration that the Respondent has contravened Articles 2,3,10,25,27,28,40,43 and 47 of the Constitution by acquiring the suit properties and declining to make prompt payment of just compensation
  2. 2.An order compelling the Respondent to forthwith pay the Petitioner compensation in full of Kshs. 359,105,371 for parcels MN/VI/29437/63/65/66/67/68/69/70/71/72
  3. 3.Interest payable at Central Bank of Kenya Base Lending Rate under section 117 of the Land Act calculated from the year 2015 being the date of possession
  4. 4.Costs to the Petitioner

Authorities

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Legislation

  • Constitution of Kenya 2010Articles 2, 3, 10, 22, 23(1) & (3), 25, 27, 28, 40, 43, 47, 64
  • Land Act No. 6 of 2012Sections 2, 8, 107-110, 112, 113, 115, 117
  • Land Acquisition ActSection 8
  • Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules, 2013Rule 10(1)
  • Land Assessment of Just Compensation Rules 2017Section 4
  • Universal Declaration of Human Rights (1948)Articles 17(1) & 12

Cases cited (8)

  • Anarita Karimi Njeru v Republic
    (1979)

    Threshold for pleading constitutional violations with precision

  • Ahmed Abdulahi Adan v Attorney General & 2 Others
    [2021] eKLR

    Threshold for constitutional petitions

  • Isaiah Otieno & 6 others v County Government of Vihiga
    (2018) eKLR

    Right to prompt compensation under article 40

  • Modern Coast Builders & Contractors Ltd v National Land Commission
    (2021) eKLR

    Obligation to pay fair compensation; injunction issue does not arise absent dispute

  • Ravaspaul Kyalo Mutisya v National Land Commission
    (2022) eKLR

    Failure to respond to letters violates article 47(2)

  • Daniel Toroitich Arap Moi v Mwangi Stephen Muriithi & another
    [2014] eKLR

    Submissions cannot take the place of evidence

  • Kahia Transporters Limited & Ano v National Land Commission and others
    Mombasa ELC No. 405 of 2017

    Injunctive orders alleged to block compensation; court found suit properties not covered

  • Hamisi Tsuma Mwero & 9 Others v National Land Commission, Kenya National Highway Authority and Colfax Holdings Limited
    ELC Case No. 206 of 2016

    Ruling rejecting application to stop compensation to Colfax; court concurred with it

Jurisdiction invoked
Articles 22, 23(1) & (3) of the Constitution; Environment and Land Court jurisdiction over enforcement of fundamental rights relating to land

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, "Colfax Holdings Limited v National Land Commission", Case Analysis (2023). Environment & Land Petition 3 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/16005/eng@2023-03-06

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