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Sh1 bn Telposta land row heads to Supreme Court
The land initially belonged to the defunct Kenya Post and Telecommunication Corporation (KPTC), before it was transferred to the registered trustees of Telposta Pension scheme.
A private firm has been allowed to escalate a fight for a Sh1 billion prime parcel of land in the Upper Hill, Nairobi with Telposta Pension Scheme to the Supreme Court.
A bench of three judges of the Court of Appeal said the dispute between Intercountries Importers and Exporters and the registered trustees of the scheme raises substantial questions of law that should be addressed by the apex court.
Telposta pension scheme and Intercountries have been fighting over the two-acre parcel of land since 2016.
The scheme lost the battle for the land in July 2016 when the High Court ruled that Intercountries Importers and Exporters was the lawful owner, having purchased it from Trust Bank (in liquidation) through an auction.
The decision was, however, reversed by the appellate court last year as a bench of three judges ruled that the commissioner of lands had no powers to allocate the public land to a private company.
Intercountries Importers successfully sought permission to challenge the decision at the Supreme Court, arguing that charges constitute an essential security in financing or lending arrangements.
And upon default of a borrower, a lender has recourse against the borrower by exercising their power of sale, subject to the provisions of the law.
Lawyer DBM Mosota for Intercountries said that in recognition of the special nature of the remedy, which makes charges commercially viable securities, certain provisions were enacted to insulate purchasers from any irregularities committed by charges.
“In our view, these are substantial issues of law, which arise both from the trial court’s judgement and this Court’s decision and require determination by the Supreme Court,” Justices Daniel Musinga, Pauline Nyamweya, and George Odunga said.
The judges agreed that the issues raised were matters likely to affect a substantial number of members of the public, and in particular those who obtain land sold through auctions.
They added that the Supreme Court decision will also clarify the issue of the extent to which such a purchaser ought to go in investigating the root of the title.
“We accordingly find the application dated 8th August 2024 merited only to the extent that the intended appeal by Intercountries Importers and Exporters Limited is certified as raising matters of general public importance, and we accordingly grant it leave to appeal to the Supreme Court against the judgment of this Court,” said the judges.
The Supreme Court had stated in previous decisions that possessing a title deed was not sufficient proof of ownership if the initial allocation of the land was unlawful.
The land initially belonged to the defunct Kenya Post and Telecommunication Corporation (KPTC), before it was transferred to the registered trustees of Telposta Pension scheme.
The land was, however, acquired by Park Avenue Investments Ltd, associated with businessman Ken Boit, in 1996, two years before KPTC passed its ownership to the Scheme.
Evidence tabled in court showed that Park Avenue charged the property to Trust Bank Limited (in liquidation) as security for a loan of Sh40 million.
Park Avenue allegedly defaulted on repayment, and the bank sold it to Intercountries Importers and Exporters Ltd for Sh28 million. During the hearing at the High Court, Mr Boit faulted the bank, saying it fraudulently and without his knowledge, transferred the property to Intercountries Limited.
The scheme, which has more than 9,000 former workers of the KPTC, first lost the case when the High Court ruled that Intercountries Ltd was the rightful owner.
The managing director of Intercountries Ltd, Mr. Arif Madhani, said the company had plans to convert the property into several high-rise apartments and had therefore lost revenue after Telposta contested its ownership.
In the appeal, Telposta faulted the commissioner of lands, saying he acted against the law and in violation of procedural requirements, by alienating the property to Park Investments, while being fully aware that the property belonged to it.
Telposta also contested the sale, arguing that the market value of the property then was Sh240 million.
Last year, Court of Appeal judges Hannah Okwengu, John Mativo, and Grace Ngenye-Macharia reversed the decision and said the commissioner of lands had no right to cause the property to be resurveyed or allocated as unalienated land.
“As observed earlier in this judgment, the Court cannot protect a title that is irregularly obtained. In this case, the Commissioner of Lands had no jurisdiction to reallocate land that was placed at the disposal of a public body by the government and vested in the public body through powers emanating from an Act of Parliament,” said the judges.
