The Court of Appeal has rejected an application by a company linked to the late tycoon Francis Mburu seeking to place a caveat on the 60-acre parcel of land on Ngong Road, Nairobi, where the newly built Talanta Sports Stadium stands.

A caveat is a warning or notice advising individuals or organisations to consider potential risks or special circumstances before taking action.

A three-judge bench found that Exclusives Estates Limited had failed to demonstrate that its intended appeal would be rendered useless if the orders sought were not granted.

The company, through its director Mark Mungai Mburu, had sought orders restoring a caveat over the property and stopping Telkom Kenya Ltd from seeking payment of Sh11.4 billion, being the portion of the Sh15 billion compensation awarded to the telecommunications company for the compulsory acquisition of the land.

It also wanted the court to order that the Sh11.4 billion be deposited in a joint interest-earning account in the names of the advocates representing the two parties if the government paid the compensation before the appeal was determined.

The Court of Appeal noted the property had already been compulsorily acquired by the Ministry of Sports, Culture and Heritage and that the public project had since been undertaken.

The court said if Exclusives Estates eventually succeeds in its appeal, the consequence would be the reinstatement of its suit for hearing and determination on its merits.

“Any loss that may ultimately be established is compensable in damages, and the applicant has neither alleged nor demonstrated that the 1st respondent (Telkom Kenya) would be incapable of satisfying any decree that may ultimately issue,” the judges said.

The court also faulted the company for seeking orders that would affect the Ministry of Sports, Culture and Heritage, yet the ministry was not a party to the proceedings.

“Granting the relief sought would inevitably affect the rights and obligations of persons or entities who are not before the Court without affording them a hearing,” the judges said, adding that such orders would effectively reverse actions already undertaken through the compulsory acquisition process.

The application arose from a long-running dispute over the ownership of the land, which was at one time associated with the defunct Kenya Posts and Telecommunications Corporation (KPTC).

Postel Housing Co-operative Society has claimed that KPTC transferred part of the land to it in 1993 for the construction of staff houses after it paid about Sh21 million.

KPTC was dissolved in 1998, resulting in the creation of the Postal Corporation of Kenya, the Communications Authority of Kenya and Telkom Kenya.

Postel later entered into an arrangement with Exclusives Estates to develop residential houses on the property, but the project stalled.

In 2001, Exclusives Estates sued Postel seeking payment for development plans it had prepared. While the case was pending, Postel agreed in January 2009 to assign its interest in the property to Exclusives Estates.

Telkom has disputed that transaction, arguing that the transfer was undertaken without its knowledge or consent.

The dispute was subsequently taken to arbitration, resulting in an award in September 2019 directing Telkom Kenya to hand over the 60-acre parcel to Exclusives Estates.

The High Court later nullified the arbitral award in 2021.

During the litigation, the government moved to acquire the property for a public project.

The National Land Commission published a Gazette Notice in 2017 expressing the government's intention to compulsorily acquire the land, initially for the establishment of informal Jua Kali operations.

The process, however, stalled, prompting Telkom in 2019 to ask the government to withdraw the acquisition notice.

The dispute resurfaced in 2020 when the Ministry of Sports invited bids for construction of a sports complex on the property, then known as Posta Sports Grounds.

Telkom moved to court and obtained orders stopping construction pending determination of the ownership and compensation dispute.

In December 2020, the court directed that the status quo be maintained, specifically barring further excavation, digging of foundations and trenches, or construction on the land.

Telkom later complained that construction proceeded despite the order, with the contractor setting up a site office and mobilising excavation machinery and other equipment.

The telecommunications company argued that the construction amounted to unlawful deprivation of its property rights under Article 40 of the Constitution because the government had not completed the compulsory acquisition process or paid compensation.

In a 2023 judgment, the Environment and Land Court ruled in favour of Telkom, finding that the government had violated the company's constitutional right to property by taking over the 60-acre parcel without compensating it.

The judge awarded Telkom Sh15 billion in compensation, to be paid by the Ministry of Sports, and ordered interest at 14 per cent from the date of judgment until payment in full.

The judge also directed Telkom to surrender its certificate of lease to the Chief Land Registrar within 180 days, failing which the title would be cancelled and a new one issued in favour of the Ministry of Sports.

Justice Mboya dismissed petitions filed by Postel Housing Co-operative Society, Aftraco Ltd and Exclusives Estates challenging Telkom's claim to the property.

The judgment paved the way for the government to proceed with the sports project, which has since culminated in the construction of Talanta Sports Stadium.

skiplagat@ke.nationmedia.com