Court bars Telkom from Karen land

A judge has extended court orders restraining Telkom Kenya from selling a piece of land in Nairobi’s Karen area pending the hearing of a Sh1.5 billion dispute on July 4. 

Aftraco Ltd has sued Telkom for alleged breach of an agreement involving the sale of 79 acres of prime land for Sh1.52 billion.
Mr Justice Joseph Mutava is hearing the case. 

The investor was last October granted interim orders restraining Telkom from selling, alienating or mortgaging the property until the dispute is determined.

Commercial Court Judge Daniel Musinga also tied Telkom Kenya to the terms of the agreement for the sale of the prime land that was earmarked for housing development.

Aftraco through its managing director Salim Sandru is accusing Telkom of acting against the terms of the contract for the sale of the land along Ng’ong Road.

Mr Sandru says he paid Telkom Sh152 million being the 10 per cent deposit of the purchase price and was to pay the remaining Sh1.37 billion when Telkom cancelled the sale.

He argues that the commercial value that stands to be lost if the agreement was not effected could not be compensated through monetary damages or another piece of land.

“The suit property is distinctively unique in Nairobi and Telkom cannot compensate the losses that the plaintiff will suffer,” says Mr Sandru in court documents.

By paying Sh152 million deposit, the businessman said he fulfilled part of his bargain as in agreement.

Aftraco claims it had hired a panel of consultants for preparatory work on the housing project ahead of ground breaking when Telkom Kenya chief executive Mickael Ghossein rescinded the agreement.

Mr Ghossein informed Aftraco that since a third party by the name Exclusive Estates Ltd had obtained an injunction against the Registrar of Titles, the contract between Telkom and the developer had been frustrated.

Mr Ghossein said he informed Mr Sandru that Telkom was willing to refund the Sh152 million deposit and cancel the deal. But Aftraco contends that Telkom Kenya intends to sell the property to a third party at a higher price.

Thereafter, Postal Housing Co-operative Society joined the court case claiming legal ownership of the property.

The society was made a party after arguing that it purchased 60 acres from the defunct Kenya Posts and Telecommunications Corporation (KP&TC) in 1993 for Sh21 million and entered into an agreement with an agent, Exclusive Estate Ltd, to build 514 houses.
Court papers filed by the Sacco indicate that it purchased the property from a loan of Sh21 million from KP&TC and the amount was deducted from the members’ salary by way of check-off system over the years until 2006 when the full amount was recovered by KP&TC successor (Telkom).

The co-operative society alleges that Telkom failed to disclose to the investor that it had no right over the property and the same was subject to a court case and arbitration proceedings.