Utumishi Investment Limited v National Land Commission & 2 others [2025] KELAT 161 (KLR)

Utumishi Investment Limited v National Land Commission & 2 others (Tribunal Case E043 of 2024) [2025] KELAT 161 (KLR) (25 March 2025) (Judgment)

Neutral citation: [2025] KELAT 161 (KLR)

Republic of Kenya

In the Land Acquisition Tribunal

Tribunal Case E043 of 2024

NM Orina, Chair & G Supeyo, Member

March 25, 2025

Between

Utumishi Investment Limited

Petitioner

and

National Land Commission

1st Respondent

Kenya Ports Authority

2nd Respondent

Attorney General

3rd Respondent

Judgment

A. Background 1. This dispute concerns the Compulsory acquisition of a portion of land known as Lamu/Hindi Magogoni/1270 (“the suit property”). The Petitioner, who is the registered proprietor of the suit Property has approached the tribunal, through a Petition dated 3rd September 2024, claiming that it was not compensated for the acquisition of its property which is a violation of his constitutional rights to property.

B. Petitioner’s Case 2. The Petitioner vide petition dated 3rd September 2024 claims that it is the legal owner of the land parcel Lamu/Hindi Magogoni/645, which is approximately 6. 0 hectares in Lamu County and that following a subdivision of this property, the Petitioner retained ownership of a portion (Lamu/Hindi Magogoni/1270), while selling the remaining parcels.

3. The Petitioner further claims that in 2012, the Government announced plans to establish a port in Mokowe, leading to a compulsory acquisition of the Suit property for the Lamu Port and LAPPSET project. The Petitioner further avers that it attended meetings with government officials, providing necessary documentation to validate ownership of the property.

4. It is further, the Petitioner’s case that in the years following, various meetings were held between the Petitioner and the government regarding compensation and ownership documentation and despite the Petitioner demonstrating proof of ownership, complications arose when one, Charles Akoyi Amayi (now deceased) contested proprietorship of the suit property but which matter was marked as abated in March 2021.

5. The Petitioner avers that after being recognized as the rightful owner with no competing claims, the Petitioner submitted court orders to the relevant government agencies expecting compensation for the land acquired. However, the Petitioner has not received any payments.

C. 1st Respondent’s Case 6. The 1stRespondent filed its Replying Affidavit dated 6th February 2025 stating that it received Kshs. 1,325,110,449/= on 27th January 2015, to facilitate compensation payments to Project Affected Persons (PAPs), including the Petitioner.

7. The 1stRespondent however contends that the said sums were insufficient to compensate the Petitioner and therefore unless the 2ndRespondent remits the said funds, the 1stRespondent is unable to compensate the Petitioner.

D. 2nd Respondent’s Case 8. In response to the Petition, the 2ndRespondent filed their Replying Affidavit dated 9th October 2024 sworn by the Asset Management Officer one Ephantus Waweru Ruge and a Further Affidavit dated 18th February 2025.

9. The 2ndRespondent contends that it remitted sums totalling to Kshs. 1,319,586. 674. 50/= into the 1stRespondent's accounts to be paid as compensation to the persons affected by the project.

10. In response to the claim by the 1stRespondent that the funds that were meant to compensate the compulsory acquisition on behalf of the 2ndRespondent was not sufficient, it stated that this was not communicated to it and there was no engagement between the 2ndRespondent and the 1stRespondent on payment of compensation as communication was between the 1stRespondent and the 2ndRespondent’s parent ministry.

E. Analysis and Determination 11. There seems to be only one sticking issue that can be identified from the pleadings and submissions of the parties. There is no contestation on the ownership of the suit property or whether the same was acquired. It is not in contention that a compulsory acquisition process was initiated by the 1st Respondent on behalf of the 2nd Respondent in relation to various parcels of property, including the suit property for purposes of construction of the Lamu Port and an Access Road. It is further not in contention that the Petitioner was awarded KShs. 5,003,775. 00/- being compensation for the suit property – Lamu/Hindi Magogoni/1270.

12. The Respondents, unfortunately, don’t seem to agree on who bears the responsibility for compensating the Petitioner. Whereas the 2nd Respondent asserts that it has remitted all the required funds for compensation in regard to the project in issue, the 1st Respondent maintains that the funds were exhausted due to payments made to other project affected persons. The 1st Respondent further indicates that it has engaged with the 2nd Respondent for additional funds.

13. This Tribunal has previously discussed the responsibilities placed on the 1st Respondent as the acquiring authority in relation to compulsory acquisition in the case of Thuo & 151 othersv National Land Commission & 5 others (Land Acquisition Petition 3 of 2024) [2024] KELAT 1142 (KLR) (12 August 2024) (Judgment) where we held as follows:“58. The Commission as the body mandated to acquire land on behalf of the State is also under a legal obligation to ensure that the acquiring authority has set aside funds for the said acquisition. This requirement which is a statutory one under section 111(1A) of the Land Act flows from the Constitutional imperative under article 40(3) to ensure that compensation is promptly done. It is also necessary for the Commission to have confirmation of the funds in order to be satisfied that the intended use of the land by the acquiring authority is not “fanciful” but has been budgeted for and funds have been allocated for the project.59. ...60. In summary, we find that the Commission is under a legal obligation to ensure that acquiring authorities comply with the Constitution and the law before an acquisition is commenced. ....”

14. The High Court in Republic v National Land Commission & 2 others Ex-parte Samuel MN Mweru & 5 others [2018] eKLR, underscored this requirement as follows:... before the Commission acquires land on behalf of any authority it must ensure that the funds required for the said acquisition are placed at the disposal of the Commission so that as soon as the process is completed but before possession of the land is taken the person interested in the land is fully compensated.

15. In this case, we have been told that the 2nd Respondent deposited with the 1st Respondent the compensation funds before the acquisition was undertaken. We have also been told that the same was done pursuant to the 1st Respondent’s compensation entitlement matrix attached to the 1st Respondent’s letter dated 27th January 2015.

16. This case presents a most unfortunate situation. The 1st Respondent acts as an agent of the 2nd Respondent in receiving funds and paying out compensation to the project affected persons. In a nutshell, the principal and agent should never be seen to be reading from different scripts. To our minds, this is a matter that should have been resolved by reconciliation of accounts between the Respondents so as to save the Petitioner an unnecessary litigation process.

17. We note that the 1st Respondent has indicated that it engaged with the 2nd Respondent for additional funds. No evidence of such engagement or what became of it has been availed before the Tribunal. It is important to note that the buck stops with the 1st respondent when it comes to payment of compensation. On matters of compulsory acquisition, the role of the 2nd Respondent as an acquiring authority is peripheral even though they are obligated to provide funds for a project. It is the 1st Respondent who has the legal responsibility of ensuring that project affected persons are compensated promptly. This is pursuant to Section 125(1) of the land act which provides that, “The Commission shall as soon as is practicable, pay full and just compensation to all persons interested the land.”

18. In Republic Vs National Land Commission & 2 Others Ex-Parte Samuel M.N. Mweru& 5 Others [2018] Eklr, the High Court affirmed that the Commission has the duty and liability to pay compensation thus:“…….before the commission acquires land on behalf of any authority it must ensure that the funds required for the said acquisition are placed at the disposal of the Commission so that as soon as the process is completed but before possession of the land is taken the person interested in the land is fully compensated. Where the Commission fails to do so and the land is possessed by the acquiring authority before payment is made, the obligation to ensure payment is made falls squarely on the commission. It follows that the commission cannot escae liability in such circumstances by simply contending that the acquiring authority has not availed the funds.”

19. In this case, we have been told that the 2nd Respondent deposited with the 1st Respondent the compensation funds before the acquisition was undertaken. We have also been told that the same was done pursuant to the 1st Respondent’s the compensation entitlement matrix attached to the 1st Respondent’s letter dated 27th January 2015.

20. This was not the correct position, though. The 1st Respondent’s letter dated 27th January 2015 and the attached compensation matrix both indicate that the total compensation for the listed properties, which included the Petitioner’s property was KShs. 1,325,110,449. 55/-. However, vide a letter dated 6th February 2015, the Ministry of Transport and Infrastructure – on whose instructions the 2nd Respondent was undertaking the instant project – instructed the 2nd Respondent to withhold some compensation money for reasons that the 1st Respondent did not provide the minimum critical information in regard to certain parcels of land. The withheld amount as per the said letter was KShs. 5,523,775. 00.

21. Accordingly, the contention by the 2nd Respondent that it remitted the entire amount for compensation funds for the project is not correct. We also note that the withheld amount is almost equivalent to the compensation sum due to the Petitioner as per the compensation matrix. Whereas the question before us is not the reconciliation of the Respondents’ accounts, we must observe that the entire requested amount for the project was not remitted to the 1st Respondent.

22. Even though the responsibility to ensure payment of compensation lies with the 1st Respondent, the 1st Respondent must work with acquiring authorities to ensure that it discharges that responsibility. In some cases, the 1st Respondent may be faced with a situation where the acquiring authority has not remitted the funds for compensation. In such cases, it is not a reasonable expectation that the full responsibility to compensate will lie with the 1st Respondent. The 1st Respondent is merely an agent of the acquiring authorities. As we observed in Registered Trustees of Ruiru Sports Club v Kenya National Highways Authority & another [2024] KELAT 891 (KLR):14. In our view, an order directing the 1st Respondent to pay the part of the compensation amount that it had failed to remit to the Commission for purposes of compensation was the appropriate one considering the Commission had also failed to pay the part compensation from the money that had already been remitted to it. It should be borne in mind that in ordering relief in enforcement of the bill of rights, a court of law has the discretion to grant a relief it considers appropriate. The list under Article 23(3) is non-exhaustive.

23. In exercising the responsibility to ensure that compensation is promptly paid to project affected persons, the 1st Respondent is under a duty to ensure that it has received sufficient funds before an acquisition process is commenced. In a case where the whole amount has not been remitted to its accounts, the 1st Respondent is under a duty to obtain the remainder of the funds from the acquiring authority. This requires a constant engagement between the Commission and the acquiring authorities. In the instant case, unfortunately, the two parties don’t seem to be reading from the same page. Inevitably, the Petitioner has been the victim of the failure by the Respondents to reconcile their accounts.

24. The law requires that any person whose property has been taken through the process of compulsory acquisition ought to be paid promptly. This has not been the case. The fault doesn’t lie with the 2nd Respondent, though. It is upon the 1st Respondent to take active steps to ensure that a project affected person is paid promptly. Facts in this case do not demonstrate that the 1st Respondent has discharged that burden. It is our finding, therefore, that the 1st Respondent has violated the Petitioner’s rights under Article 40(3) and Article 47(1) of the Constitution of Kenya, 2010.

F. Final Orders 25. The upshot of our analysis and findings above is that the Petitioner’s case is merited and the same is allowed as follows:a.A declaration be and is hereby issued that the Petitioner’s rights under Article 40(3) and 47(1) of the Constitution of Kenya, 2010 have been infringed by the 1st Respondent;b.An order be and is hereby issued directing the Respondents to reconcile their accounts in respect of the compensation due and owing to the Petitioner within 14 days, hereof;c.An order be and is hereby issued directing the 1st Respondent to pay the Petitioner, within 30 days of the reconciliation in (b) above, the compensation awarded to the Petitioner being the sum of Kenya Shillings Five Million Three Thousand Seven Hundred and Seventy-Five (KShs. 5,003,775. 00) for the compulsory acquisition of the Petitioner’s parcel of land Title No. Lamu/Hindi Magogoni/1270. d.Interest on (b) above shall be paid at court rates from the date of this judgement until payment in full;e.The 1st Respondent shall bear the Petitioner’s costs.

DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 25TH DAY OF MARCH 2025……………………………………DR. NABIL M. ORINA - CHAIRPERSONGEORGE SUPEYO - MEMBER