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ELCStruck OutEnvironment & Land Petition 25 of 2020· [2023] KEELC 21858 (KLR)

Nguku Product Twenty Ten Limited v National Land Commission

Environment and Land Court
30 November 2023
3,385 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~14 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court struck out a landowner's compensation claim, ruling that disputes over compulsorily acquired land must first go to the Land Acquisition Tribunal.

What this practically means

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Executive summary

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Nguku Product Twenty Ten Limited, the registered proprietor of Athi River/Athi River Block 1/31, petitioned the National Land Commission after its land was compulsorily acquired for the second carriageway of the Athi River-Machakos Turnoff section of Mombasa Road. The NLC issued an award of Kshs. 92,478,659 on 23 January 2018 but paid only Kshs. 15,000,000, leaving Kshs. 77,478,659 outstanding. Payment stalled after the EACC, investigating alleged fraud and over-valuation in the compensation process, recommended stoppage pending verification and re-valuation, and after KeNHA revised the road designs in July 2019, reducing the land required. The NLC re-valued the acquisition at Kshs. 38,461,591, which the Petitioner rejected. The Petitioner sought declarations of constitutional violation, payment of the balance with 14% commercial interest, quashing of the revised awards, and a declaration that the NLC could not take directions from the EACC. The NLC countered that the re-valuation followed the gazetted revised road design and EACC's inquiry. Justice Christine Ochieng held that the re-valuation was justified, that compensation accrues only to land actually acquired, and that the Petitioner bore the burden of proving under-valuation but tendered no fresh valuation report. The court further held that disputes on compulsory acquisition must in the first instance go to the Land Acquisition Tribunal under the Land Value (Amendment) Act 2019. The Petition was struck out as unmerited, with leave of thirty days to lodge an appeal at the Tribunal, and no order as to costs.

Key legal issues

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01

Whether the Petitioner was entitled to payment of the balance of the initial award of Kshs. 77,478,659 with interest

Holding

No - the initial award was lawfully revised after KeNHA revised the road design reducing the land acquired, and the Petitioner failed to prove under-valuation of the revised acquisition

Reasoning

The court found KeNHA's letter of 30 July 2019 revised road designs and land acquisition requirements, and the revised schedule was gazetted. The NLC therefore adhered to the Land Act in re-valuing. The Petitioner, despite rejecting the revised award, tendered no fresh valuation report showing under-valuation, so its claim to the initial award failed.

p. 6
02

Whether EACC's intervention directing stoppage of payments and re-valuation violated the NLC's independence

Holding

No - EACC is mandated to investigate use and misuse of public funds, and the allegations of fraud and over-valuation made the re-valuation plausible

Reasoning

The court took judicial notice of EACC's anti-corruption mandate. The NLC explained that EACC requested re-valuation due to allegations of fraud, over-valuation and undue influence, and the court found these reasons plausible in warranting re-valuation of the suit properties.

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Whether this Court, rather than the Land Acquisition Tribunal, had the mandate to assess the correct compensation

Holding

No - disputes on compulsory acquisition must in the first instance go to the Land Acquisition Tribunal; the Petitioner should have appealed there or filed a civil suit

Reasoning

Sections 133A and 133C(6) of the Land Value (Amendment) Act 2019 vest first-instance jurisdiction over compulsory acquisition disputes in the Land Acquisition Tribunal, with appeals to the EL Court. The Tribunal is now operational and the Petitioner, not yet fully compensated, still has a remedy there.

p. 6

Legal principles established

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  • Disputes emanating from compulsory acquisition of land should in the first instance be referred to the Land Acquisition Tribunal, which can confirm, vary or quash the NLC's decision, with appeals lying to the Environment and Land Court
  • Just compensation under Article 40 accrues only to the portion of land actually acquired; where the acquisition is reduced, a project affected person cannot be compensated for more land and fresh valuations must be undertaken
  • The burden lies on the landowner to present a current valuation report showing the value of the land acquired after revision of the award

Court orders

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  1. 1.The Petition is struck out as unmerited
  2. 2.The Petitioner is granted leave of thirty (30) days from the date of the judgment to lodge an appeal at the Land Acquisition Tribunal
  3. 3.No order as to costs

Authorities

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Legislation

  • Constitution of Kenya, 2010Articles 10, 21, 22, 23, 40(2), 40(3), 47, 64, 67(3), 248(1), 249(2)(b)
  • Land ActSections 113, 122, 125, 128, 111(A), 117(2), 119
  • Land Value (Amendment) Act 2019Sections 133A, 133C(6)
  • Environment and Land Court ActSection 16A

Cases cited (12)

  • Patrick Musimba v National Land Commission & 4 others
    [2016] eKLR

    Article 40(3) requires just compensation equating restitution while protecting public coffers against improvidence

  • Torino Enterprises Ltd v Permanent Secretary, Ministry of State of Defence
    HCC Petition 38 of 2011
  • Christabel Akinyi Onyango v Kenya Airports Authority
    HCC Petition 187 of 2013
  • Five Star Agencies Ltd v National Land Commission
    (2014) eKLR
  • In the matter of the National Land Commission
    Advisory Opinion Reference No. 2 of 2014, (2015) eKLR
  • In the matter of the Interim Independent Electoral Commission
    (2011) eKLR
  • Okiya Omtatah & Another v Attorney General & 7 Others
    (2013) eKLR
  • Communications Commission of Kenya & 5 Others v Royal Media Services & 5 Others
    (2014) eKLR
  • Pentagon Communication Ltd v National Land Commission
    (2022) eKLR
  • David M. Mereka v Kenya Council of Catholic Bishops & Another
    (2019) eKLR
  • Horn v Sunderland Corporation
    [1941] 2 KB 26

    Compensation must fully make up the seller's loss - principle of equivalence (quoted within Musimba)

  • Director of Buildings and Lands v Shun Fung Wouworks Ltd
    [1995] AC 111

    Compensation is for the value of the land to the owner, not its value generally (quoted within Musimba)

Jurisdiction invoked
Article 162(2) of the Constitution and the Environment and Land Court Act (court's jurisdiction over land and environment disputes); court held compulsory acquisition disputes lie first with the Land Acquisition Tribunal under section 133C(6) of the Land Value (Amendment) Act 2019

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, "Nguku Product Twenty Ten Limited v National Land Commission", Case Analysis (2023). Environment & Land Petition 25 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/21858/eng@2023-11-30

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