State ordered to pay firm Sh714 million compensation for SGR land

The government has been ordered to pay a firm Sh 714 million as compensation for a parcel of land acquired to facilitate the construction of Standard Gauge Railway (SGR).

The Land Acquisition Tribunal chaired by Nabil Orina ordered National Land Commission (NLC) to pay Carlisle Development Company the money within a period of 45 days without delay as compensation for the compulsory acquisition of property known as LR NO 209/13761 measuring 7.596 hectares.

Orina said that the rights of the complainant as enshrined in Article 40 and 47 of the constitution of Kenya 2010 have been violated by the the respondent,

“An order be and is hereby issued directing the respondent to pay the complainant, within 45 days hereof, the sum of Ksh 712,380,000 being the compulsory acquisition plus damages which would be computed at 1 million per acre translating to Ksh 18,755,000,” Justice Orina ordered.

He further directed the respondent to pay the complainant the interest earned at court rates with effect from October 10, 2014, date of acquisition until payment in full.

While seeking compensation before the Tribunal, Carlisle Development Company indicated that, the NLC published a gazette notice with intention to acquire certain parcels of land for the Kenya Railway Corporation (KRC) for the construction of Mombasa-Nairobi Standard Gauge Railway in Nairobi and Machakos counties.

The notice included the suit property as part of those parcels of land that were to be acquired. The initial notice indicated the area to be acquired as 2.7946 hectares.

Thereafter via a Gazette Notice No. 1180 of February 20, 2015, the respondent issued a notice of enquiry directing all persons with an interest of the affected parcels of land to appear at the designated venue for the enquiry and to present the requisite documentation.

Subsequently, in addendum Gazette Notice number 5486 of July 2016, an additional acreage of 4.805 of the suit property was earmarked for acquisition for the purpose of the construction of the commuter Rail System. The notices raised the cumulative acreage of the acquisition of the suit property to 7.569 hectares.

The respondent proceeded with the acquisition of the suit property on behalf of Kenya Railways Corporation the entity which has established a fully operational Inland Container Depot (ICD) on the suit property.

On September 25, 2024, the complainant approached the Tribunal alleging the suit property was acquired without compensation to date.

In regards to the compulsory acquisition, the complainant stated that he was no longer notified not served with the Gazette Notices and had no knowledge of the inquiry of the acquisition of its property. Furthermore, it was never issued nor served with a letter of award as required as required by law.

It was only during the visiting of the suit property by the complainant’s directors with the intention to construct a perimeter wall that “they were met with utter shock upon discovering that the land had been fully occupied by the acquiring entity.”

The complainant submitted that they issued a formal demand and notice of intention to institute legal proceedings against the respondent for failure to provide compensation where despite the demands, it refused to remmit the requisite compensation.

The complainant engaged professional valuers who after conducting the assessment appraised the suit property at Ksh 2,250,000,000 inclusive of 15 percent disturbance compensation.

The complainant filed a suit seeking compensation amounting to Ksh 2,250,000,00, interest on compensation from 2016 to date and mesne profit and loss of income of the compensation amount payable.

Through their replying affidavit sworn on December 9, 2024, by Mariko Kaliamoi -the respondent’s Principal Valuation and Taxation Officer stated that the “complainant’s delay and failure to attend the inquiry during when he was expected to produce their bank details led to non-compliance where the funds initially allocated for compensation were reallocated to other projects.”

Kaliamoi proceeded to value the suit property in 2015 through a valuation report that returned the value of the property at Ksh 712,380,000 which was the current value during that time of acquisition.

In determining the matter, the Tribunal analyzed the evidence produced it is clear to us that the complainant was not served with the notices issued in the compulsory acquisition process for the said property. “It is also not disputed the respondent did not issue any award or make payments as compensation for the compulsory acquisition of the suit property.”

In order to ascertain the appropriate remedy, the Tribunal quoted the words of the Supreme Court in the case of Attorney General v Zinj Limited (petition 1 of 2020) (2021),

“Under Article 22(1) of the constitution every person has the right to institute a court proceeding claiming that a right or fundamental Bill of Rights have been denied, violated, infringed or is threatened….The quantum of damages to be awarded depends on the nature of the right that is proven to have been violated, the extent of violation and the gravity of the injury caused.”

In conclusion, the Tribunal stated that “after the analysis, we find that the complainant is merited and the judgement is hereby entered in favour of the complainant against the respondent.”