Court awards Sh11billion to Orbit Chemical

October 15, 2012 1:58 pm


The government would have paid Sh6b when they first agreed to settle the matter in 2008 but has now more than Sh5b in interest/FILE
NAIROBI, Kenya, Oct 15 – The government has been ordered to pay a local manufacturing firm, Orbit Chemical Industries, in excess of Sh11.4 billion for loss of use of its 100 acre-prime land in Nairobi’s Embakasi area.

The government would have paid Sh6 billion when they first entered an agreement to settle the matter in 2008 which has now attracted interest of more than Sh5 billion.

“By reason of what has been stated, an order be and is hereby made and ordered that judgment be and is hereby entered against the defendant in the sum of Sh6 billion,” Justice Roselyn Nambuye said in the ruling issued on Friday.

Legal experts said the award is the largest slapped against the Kenyan government.

The Judge said that since the interest was not included in the compromise, the court ordered interest to run at court rates from March 2008 when as assessment was done.

“The plaintiff will have costs of the suit as well as application paid for by the defendants,” Justice Nambuye said.

Orbit Chemical Industries which was represented in the suit by lawyer Mathew Oseko had moved to court seeking vacant possession of the multi-billion shilling property or appropriate compensation for loss of investment opportunities.

Oseko had told the court that Orbit had bought the land from National Bank of Kenya with the aim of developing a chemical plant and other investments.

In September 1987, the Registrar of Titles registered a caveat against the said land effectively blocking the registered owners of the prime land claiming the government had an interest in it.

“The source of grievance which compelled the plaintiff to move to court and seek the court’s intervention is that the plaintiff contends that the registrar had no power to register a caveat against the said title,” part of the landmark ruling read in part.

The land mark ruling which is seen as a morale booster to investors states that by “reason of the aforesaid unlawful registration of the said caveat against the plaintiff’s suit land, the said caveat prohibited all and any dealings with the land absolutely.”

As such, the judge noted, the defendants caused the plaintiffs land to remain unoccupied and was thereafter invaded by squatters.

In issuing the ruling, the judge said she had taken note of the fact that the defendant did not evict squatters from the disputed land despite numerous pleas by the defendant—Orbit Chemical Industries Limited.

“By that reason, the plaintiff contends that the registrar of titles did not specify what had been violated under section 65 of the Registration of Titles Act and for this reason the registration of the said caveat against the plaintiffs Title was not only unreasonable but null and void for reasons of being vague, indefinite and with no particulars,” the judge said.

Pleas by the defendant to have squatters evicted from the suit property were not honoured.

The judge observed that the plaintiff’s complaints raised against the defendants which compelled the plaintiff to move to court had been found to be competent, sound and genuine.

“The plaintiff has shown a well founded and sufficient cause for seeking the court’s intervention to compel the defendant not to rescind from the compromise reached,” she said.

As such, the judge ruled, there is no justification demonstrated to exist in order to entitle this court to reopen the matter to allow parties to proceed by way of formal proof rather than endorse the compromise reached.

“In summary, the plaintiff is entitled to the reliefs sought because the settlement or compromise reached was within the apparent authority of agents of both sides,” the court said.



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