Troubled Dubai Bank debtor wins Sh3bn war against KDF  

A private firm linked to the recent collapse of Dubai Bank has won a Sh3 billion land battle against the Kenya Defence Forces (KDF).

The debt arose from disputed ownership of a 90-acre piece of land that the military appropriated 11 years ago and is now part of the Embakasi Army Barracks.

Torino Enterprises had filed a petition claiming that it owned the prime land before the Department of Defence (DoD) forcefully occupied it in 2005, thwarting the real estate firm’s plan to build residential housing units for sale.

The DoD has since built a demining college on the disputed land, making it impossible for Torino to repossess it.

High Court judge George Odunga issued an order compelling the DoD to pay Torino Sh1.53 billion with accrued interest from 2011, when the firm first won its battle for compensation, taking the total sum owed to Sh3.01 billion as of December 2016. The DoD must also pay Torino’s legal costs.

Torino had initially sued the government in 2011, claiming it had not been compensated for compulsory acquisition of its land.

READ: Firm wants State to pay Sh3bn for Nairobi army barracks land

ALSO READ: Dubai Bank borrowers stop repaying Sh4.4 billion loans

Jirongo named in list of six behind collapse of Dubai Bank

Justice Jean Gacheche had awarded the firm the Sh1.53 billion together with 12 per cent interest from the date of judgment until the DoD settles the amount.

Torino in August filed an application before Justice Odunga, seeking to compel the DoD to release the money.

The judge last week dismissed the DoD’s claim that the award had not been catered for in the 2016-2017 budget hence could not be paid, and ordered the military to immediately release the funds to Torino.

“In my view, the reasons advanced by the respondent for the failure to satisfy the decree are flimsy excuses meant to deny the applicant the fruits of its judgement and I have no reason to decline to grant the orders sought herein.

“In the premises I hereby issue an order against the respondent compelling him to pay Torino Enterprises the sum of Sh1,530,000,000 together with interest at the rate of 12 per cent per annum from July 4, 2011 till payment in full, being the decretal sum due and payable to Torino Enterprises in respect of Nairobi High Court Petition No. 38 of 2011,” Justice Odunga ruled.

Torino was last year listed as one of the politically connected firms that caused the collapse of Dubai Bank, having not serviced loans for more than three months.

A report on Dubai Bank prepared by audit firm Crowe Horwath says Torino owes the lender Sh138 million and is being pursued by the receiver manager — the Kenya Deposit Insurance Corporation (KDIC)— to recover the loan.

Justice Odunga argued that failure to allocate money in the budget cannot be used as a reason for not settling a court award, but can be used to request for more time to pay the liabilities.

Torino had requested the judge to compel the DoD to pay the full amount within seven days of the judgment and have Defence principal secretary Peter Kaberia jailed for contempt of court in the event of default.

But Justice Odunga held that the request for contempt proceedings was premature as they could only hold water after the DoD defied the orders issued in the judgment.

The DoD has since challenged Torino’s award in the Court of Appeal, but Justice Odunga held that an appeal is not reason to stop execution of a court award.

The court found that the DoD should have sought an order barring execution of the judgment as that would be the only barrier to his issuing one for payment of the Sh3 billion to Torino.

“With respect to the pending appeal the law is clear that the mere existence of an appeal does not amount to stay of judgement. If the respondent was aggrieved by the decision he had the options of seeking stay of execution either before this court or the Court of Appeal,” Justice Odunga said.

Torino is owned by businessmen Kenneth Boit, James Cheruiyot and Patrick Osero.

Mr Osero, a former chairman of the Agricultural Finance Corporation (AFC), is a co-owner of Nairobi’s Weston Hotel on Langata Road alongside Deputy President William Ruto.

Mr Boit has through another firm — Darkwood Investments — filed a separate suit against the Interior ministry seeking compensation for 988 acres that are also part of the Embakasi Barracks.

Mr Boit, through his Darkwood Investments, is seeking a Sh40 billion compensation for the land in the suit that is before the High Court.

Torino reckons that it bought the land from another real estate firm — Renton Company Limited — for Sh12 million in January 2000.

The DoD had claimed that it acquired the land from the defunct Nairobi City Council in 1984 and that it should never have been registered to Torino or any other private firm.

But Justice Gacheche held that Torino had furnished the court with legitimate documents to prove ownership hence could not be denied its rights to the prime property.