Economy

Court refers Linturi, hotel investor Sh337 million award fight to judge

linturi

Agriculture Cabinet Secretary Mithika Linturi. PHOTO | DENNIS ONSONGO | NMG

A case filed by former Senator Mithika Linturi to block payment of Sh337 million awarded to an investor whose hotel was taken over by the Meru County government two years ago has been referred to a judge who adopted the award.

Justice Edward Muriithi referred the case to his colleague Justice Thripsisa Cherere, who adopted the judgment made by an arbitrator in June.

Whereas Mr Linturi and others oppose the decision and want a review, the investors of Leopard Rock Hotel -- Mr Michael and Gabriel Dechauffour-- want the court to issue an order to the county government to enforce the award.

“The need to avoid the prospect of contradictory decisions of courts of the same jurisdiction over the same subject matter cannot be over-emphasised. It goes to the root of administration of justice, good order and confidence in the Judiciary,” Justice Muriithi said as he directed the case to be handled by Justice Cherere.

The proprietors of Leopard Rock Lodge, situated at Meru National Park, successfully argued that the takeover in May 2018 was in breach of a lease agreement, signed between them and the county government.

The arbitrator, Mr Calvin Nyachoti, ordered the county government to pay Sh329,881,985 for the cost of facilities the investors built and a further Sh7,436,500 for the cost of assorted assets such as furniture and fittings. The award was adopted by Justice Cherere in June.

Documents filed before the arbitrator were that Dechauffour entered a deal to lease the lodge for 25 years from January 1999.

Initially, the investors were required to pay a monthly rent of Sh30,000 plus a five percent bed occupancy to the defunct Nyambene County Council, the predecessor of Meru County Government. The rent would increase by 10 percent every two years on the anniversary of the lease.

As part of the deal, the investors were barred from using any part of the lodge for any other purpose other than as a tourist lodge, not to make alterations without the written consent of the County government and to keep the lodge in good condition among other covenants.

The county council also allowed the investors to build structures subject to approval, to carry out business as a tourist lodge.

All was well until May 2018 when Governor Kiraitu Murungi’s government entered the facility and forcibly took over the lodge, before the expiry of the lease.

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