Court lifts ban on payouts to owners of state project sites
The construction of the Kenol-Sagana-Marua highway at Kakuzi area on May 31, 2022. It is one of projects that could have stalled if the court order stopping NLC from compensating land owners was maintained.
A court has lifted orders barring the National Land Commission (NLC) from paying all persons affected by ongoing government projects pending the determination of a Sh1.2 billion claim by a property owner whose land was acquired nine years ago but has yet to be compensated.
The court ruled that property owners and persons affected by a project ought to be compensated before the NLC and the government’s entity undertaking the project can possess the land.
Justice Oscar Angote set aside the orders dated February 22, 2023, after the NLC said the order would halt ongoing government projects such as the Kenol-Sagana-Marua Road Project and Kuabura Water Supply Project.
The NLC said that without prompt compensation to other project-affected persons, it would be sued for damages. The Commission opposed a request by Five Star Agencies Limited for orders attaching NLC’s accounts at the National Bank of Kenya and directing the lender to pay the company Sh1,202,727,009.
The amount is compensation for the firm’s one-acre parcel acquired in Lang’ata, Nairobi, by the Kenya National Highways Authority (KeNHA) in 2013 for construction of the Southern Bypass. The initial compensation award given by a court in November 2014 was Sh413,192,500, but it has increased to over Sh1.2 billion because of interest.
Complaining about discrimination, the company, through its Managing Director Abdulsalam Shariff, wanted Justice Angote to allow attachment of the NLC’s accounts at National Bank until full payment of the award. Mr Shariff said it was only just that the money held by the NLC to the credit of his company be attached to satisfy the court’s decree.
“NLC has, despite demands, wilfully declined to make any payments, notwithstanding the fact that the funds held to its credit at the National Bank account are funds set aside to compensate landowners whose parcels have been compulsorily acquired,” said Mr Shariff.
But the NLC responded that it has never received funds from KeNHA for purposes of compensating Mr Shariff’s company.
The court heard that it would be unfair to compel the NLC to pay Sh1.2 billion to the company.
The NLC added that it has written to KeNHA several times to remit the decretal amount but to no avail. The Commission has a special account (Land Compensation Fund Account) in the National Bank, specifically for remittances of money for compulsory acquisition from acquiring agents. The NLC said the money in the account has been deposited by government departments and agencies to convey payments to other project-affected persons.
The Commission said payments to other persons would be affected by attaching the bank accounts and other ongoing government projects would stall. And other projects with underlying costs and contractual obligations would be affected and public funds lost through penalties for breach of contracts.
The bank, through its relationship manager, said the balance in NLC’s account was Sh9,044,089,148, adding that though the account is sufficiently funded, the money was held in trust for designated recipients of compensation, and was not available for satisfaction of any decree.
Justice Angote said NLC is a state organ funded by the public and its funds cannot be attached by garnishee proceedings.
