The Kajiado County government has been barred from shutting down the factory and premises of Tata Chemicals Magadi Soda Limited (TCML) over a fresh Sh358.74 million land rates row.
Environment and Land Court Judge Loice Komingoi said that disrupting Tata Chemicals’ operations would have profound and far-reaching consequences on the lives of communities supported by the firm's Corporate Social Responsibility (CSR) programmes, such as healthcare and education, which are fundamental human rights.
“This Court acknowledges that the intrinsic value of certain activities, such as education through schools and healthcare services provided by hospitals, transcends mere financial quantification. These services safeguard fundamental and basic human rights, which are enshrined in the Constitution,” the judge said.
“The interruption of these critical services would cause profound and far-reaching consequences that no monetary compensation could remedy. Therefore, this Court is persuaded that an injunction is necessary to prevent irreparable harm to the community.”
CSR is a self-regulating business model that helps a company to be socially responsible to itself, its stakeholders and the public. This includes supporting the community through projects in key areas such as education and healthcare. Tata Chemicals is currently the largest soda ash producer in Africa with an installed capacity of 350,000 tonnes per annum.
The Kajiado County government is embroiled in a dispute over land rates and mining royalties. On February 14, 2018, the county government wrote to the firm demanding Sh17,448,485,646 in arrears of land rates and royalties.
The matter was escalated to the High Court, where the petition was heard and judgment was delivered on May 3, 2019. Aggrieved by this decision, Tata Chemicals approached the Court of Appeal and the matter is pending determination.
Meanwhile, as directed by the High Court, the County Government has been in discussions but no agreement has been reached. On October 3, 2023, the County Government issued Tata Chemicals with an invoice for Sh358,748,000 in respect of land rates for a parcel of land known as LR No. 2241/R 2978/1.
On January 15, 2024, Regional Business Connections Limited, a debt collection company, served Tata Chemicals with a demand for payment of the rates as per the invoice dated October 3, 2023 and, in default, ordered the closure of its premises. Regional Business Connections Limited made good on its threat and closed the firm’s premises on January 16, 2024, triggering a fresh battle that ended up in Justice Komingoi's court.
Tata Chemicals, in its fight back, claimed that the notice of October 3, 2023 had no legal basis and that Regional Business Connections Limited had no authority to close its premises.
It further argued that closure was not one of the remedies provided for under the Rating Act or the Kajiado County Rating Act 2016, and that the nature of the lease did not allow the county administration to shut down its operations.
Tata Chemicals argued that shutting down its operations over the alleged arrears would affect the communities it serves through education and health programmes. The company cited the construction and operation of a school, a Level Four hospital, a dam and several boreholes, all of which contribute significantly to the well-being of the surrounding community.
Justice Komingoi said the company had raised legitimate concerns about the negative impact of a closure on its factory and premises.
“I find that the balance of convenience tilts in favour of the Defendant/Applicant (Tata Chemicals) who should be allowed to go on with its operations. The Plaintiff/Respondent (Kajiado County government) on the other hand will still be paid the land rates owing once the Court of Appeal renders its decision” the Judge said.
The court, however, dismissed an application by the county government to restrain it from deciding its latest feud with Tata Chemicals.
“The Plaintiff/Respondent has argued that this Court has no jurisdiction to determine this Application claiming that the issue question about land rates is before the Court of Appeal. To determine whether this position is accurate means that this Court would have to peruse the Memorandum of Appeal,” Justice Komingoi said.
“I am of the view that the fact that the issue of rate is pending in the Court of Appeal cannot constitute a preliminary objection in the true meaning of the word. No stay has been granted in the Court of Appeal to halt any discussion on the issue between the parties. I find that the Preliminary Objection herein is misplaced and the same is disallowed.”
