The Environment and Land Court has cancelled the subdivision and transfer of a prime Nairobi property after finding that the transactions were driven by fraud and forged corporate documents.
In its judgment, the court ruled that Langton Investments Limited remains the lawful owner of the land known as L.R. No. 28401, measuring 54 acres, after purchasing the same from Fairview Investments Ltd in 1999.
The court ordered the cancellation of six titles that had been created from the disputed subdivision in a transaction carried out by an impostor posing as a Langton company director.
The court found that the transfer of the property to Meron Limited in July 2023 was fraudulent and based on a sham joint venture agreement signed by a person who had no authority to represent the company.
“The purported Joint Venture Agreement was but an instrument of fraud used by the first defendant (Meron Limited), in cahoots with Francis Muhuhu, in an attempt to defraud the plaintiff (Langton Investments Limited) of its land," the court said.
The court also awarded Langton Investments Sh54 million in damages for trespass against Meron Limited, though it had asked for Sh200 million.
"The purported Joint Venture Agreement is therefore not binding upon the plaintiff in any way whatsoever,” the court stated. Langton had sought Sh200 million in damages.
The dispute centred on ownership of the large parcel located in Nairobi’s Garden area. Langton Investments moved to court in October 2023 after discovering that the land had been subdivided into six plots and transferred to Meron Limited without its knowledge.
According to the company, unknown persons had earlier interfered with its records on the Business Registration Service portal and attempted to alter its directorship, raising fears of a fraudulent takeover.
The court heard that Meron Limited claimed the land had been transferred to it under a joint venture agreement signed in April 2023 to develop the property. The firm said it had already spent Sh100 million on surveying and subdivision works.
However, evidence from government officials and investigators cast doubt on the documents relied on by the developer.
Officials from the Registrar of Companies testified that the person who signed the agreement on behalf of Langton Investments, Francis Muhuhu, had never been a director or shareholder of the company.
The assistant registrar further told the court that the CR12 document used to prove the alleged directorship was fake and contained several obvious errors.
“The name of the plaintiff company was incorrectly spelt, the date of incorporation was wrong, and the reference number had been manipulated,” the court noted while analysing the evidence.
The court also noted that Francis Muhuhu, who transacted on behalf of Langton as its director, was never called as a witness, even though Meron’s director confirmed he had his contacts.
Investigators from the Directorate of Criminal Investigations (DCI) also testified that the transfer documents used to move the land to Meron Limited were forgeries.
The court found that the company failed to conduct basic due diligence before committing to the deal.
“How did Meron Ltd just trust a stranger who came alleging he was a director… and commit Sh100 million without verifying the authenticity of the claims?” the court posed in the ruling.
Cancellation of the titles
The court concluded that the alleged joint venture agreement was not valid and could not bind Langton Investments.
Because the transfer of the land was based on that agreement, the court ruled that all subsequent actions, including the subdivision into six parcels, were unlawful.
“The transfer of the suit property… was therefore null and void. The subsequent subdivisions too,” the court held.
The court also found that Meron Limited’s entry onto the land amounted to trespass since it had no lawful authority from the owner.
As a result, the court ordered the cancellation of the titles issued to Meron Limited and directed the land registry to rectify the records to restore Langton Investments as the registered proprietor.
The court further granted a permanent injunction barring the developer from entering, selling, transferring, or in any way dealing with the property.
