The Kenya National Highways Authority (KeNHA) has received a significant reprieve in a high-stakes legal battle over KES769 million in compensation related to land acquisition for the Mombasa Southern Dongo Kundu bypass project. The Court of Appeal has temporarily halted the payment to Fort Properties Ltd, a move that underscores the ongoing complexities surrounding the case.
The court’s decision came after KeNHA argued that the immediate disbursement of the funds would severely impair its operations. The case revolves around two parcels of land, measuring approximately 2.217 and 7.333 hectares, which were compulsorily acquired by the government to facilitate the construction of the Dongo Kundu bypass and Kipevu terminal link road.
In their ruling, Appellate Judges Agnes Murgo, Kibaya Laibuta, and George Odunga concurred with KeNHA’s assertion that the release of the funds could cripple the agency’s statutory duties. “Since the applicant is a public corporation undertaking statutory duties, and neither the applicant nor the respondents stand to benefit if the sums in question remain frozen, we hereby direct that the attachment be lifted forthwith,” the judges stated.
KeNHA had previously sought the court’s intervention, arguing that there was no assurance the substantial sums would be recoverable if paid to Fort Properties Ltd. The agency expressed concern that the private firm’s directors might disappear if the intended appeal succeeded, leaving KeNHA with no recourse.
The dispute dates back to an Environment and Land Court (ELC) ruling in Mombasa, where Fort Properties Ltd was awarded KES242 million plus interest for the compulsory acquisition of its land. Following the ELC judgment, the firm sought and obtained a garnishee order for KES931.6 million, leading to the freezing of KeNHA’s accounts.
KeNHA’s appeal challenges this ruling, citing statutory immunity against the execution of its funds. The agency also highlighted the potential harm to public interest, noting that its operations, including the payment of employee salaries and fulfillment of contractual obligations, were at risk.
