Telkom Kenya has won a court battle for a Sh6 billion property sold during the Moi-era. Justice Ngenye Macharia nullified an arbitration award of September 2019 that ordered Telkom Kenya to hand over the 60-acre land in Jamhuri Estate along Ngong Road in Nairobi to Exclusive Estates Limited (EEL), which is associated with Mr Mburu. This gave the Telkom the right to retain the land or receive at least Sh 6billion to cede the property to Mr Mburu.
The telecoms operator, which recently put on sale multi-billion shilling properties to fund its Kenya operations, challenged the Sh21 million deal and termed it grossly undervalued. Justice Macharia agreed with Telkom that the arbitrator Zehrabanu Janmohamed re-wrote a contract between the parties by directing Telkom to accept Sh 21million for the controversial land.
“The court hereby finds that the arbitrator exceeded her jurisdiction by re-writing the contract between the parties and hereby sets aside the award dated September 6, 2019,” ruled the judge.
Re-writing of contract
Although Mr Mburu did not purchase the plot, the arbitrator handed him the land on grounds that a deal he had entered into with a State agency to develop the property about 30 years ago gave him legitimate claim to the land. Ms Janmohamed ruled that Mr Mburu is entitled to 60 acres from the 79-acre parcel of land.
The 60-acre parcel of land was valued eight years ago at Sh6 billion by Camp Valuers at Sh100 million per acre. In 1993, KPTC excised part of its land and transferred it to Postel Housing Cooperative Society Ltd on January 19, 1993, for the construction of houses for its workers.
Postel Housing Cooperative Society Ltd then entered into an agreement with Mr Mburu’s EEL for construction of the homes in a deal that offered the tycoon’s firm the 60 acres for Sh21 million. The housing project collapsed and the transfer of the land was frozen.
Biased findings
Ms Janmohamed termed the deal valid and directed Telkom to subdivide the land within 90 days and for Exclusive to pay Sh 21million for the property. However, Telkom Kenya through Mr Kamau Karori argued that the award wrongly offered the land to Exclusive for a paltry Sh21 million, arguing that the land is worth more than Sh 6billion. He argued that an Act of Parliament had then barred KPTC from selling its assets without the consent of the Minister for Transport and Communication.
He also pointed out that the arbitrator failed to consider crucial evidence but based her decision on issues introduced later. The court also heard that the arbitrator demonstrated bias through offering Exclusive the multi-billion shilling property for less.
“The award is replete with inconsistencies and biased findings which amount to depriving the applicant of the right to have its dispute resolved before an unbiased tribunal and the application of the rules of natural justice,” he submitted.
Mr Mburu defended the arbitrator, arguing that the sale agreement was clear on the purchase price upon transfer of the land. Telkom Kenya has been seeking to sell properties spread across the country as it raced to raise cash for contribution to its failed merger with Airtel.
