Moi Referral asset ownership row now moves to lands court

A longstanding dispute pitting a private health company against the government on ownership of the Moi Teaching & Referral Hospital (MTRH) will now be handled by the Environment and Lands Court.

While referring the dispute to the lands court Thursday, the Supreme Court also reversed a compensation of Sh1.7 billion awarded to the company, Uasin Gishu Memorial Hospital Ltd, by the court of appeal in 2017.

The compensation was for land, properties, the hospital and related facilities taken over by the Kanu government in 1998 for establishing the Moi Teaching & Referral Hospital.

The Supreme Court judges cognizant that the dispute has been in the corridors of justice for more than two decades, directed that the Environment and Lands Court hears and determines the matter on a priority basis.

The five-judge bench led by Acting Chief Justice Philomena Mwilu specified more than ten issues that the lands court should address in determining the legitimate owner of the hospital.

Among the issues to be determined by the lands court is who is the owner of the two pieces of land occupied by the hospital and how were they acquired.

The court will also find out who owns the investments situated on the land, and by what means were the investments made.

Additionally, the lands court will determine the legal status of Legal Notice No. 78 of 1998 that was used to acquire the health facility and establish the MTRH.

The legal notice was published on June 12, 1998 when retired President Daniel Arap Moi, by an order known as “The Moi Teaching and Referral Hospital Board Order, 1998”, established the MTRH as a State corporation and appointed its board to take over the private facility and properties including rights, duties, obligations, assets and liabilities.

Evidence tabled in court shows that following the promulgation of the Legal Notice, the government compulsorily acquired the company’s hospital and the suit properties by ordering that its assets, rights and interests be transferred and managed by MTRH Board. The move was made without following the due process of the law, the firm says.

In March 2001, the court papers show, the MTRH Board forcefully entered the health facility’s premises and took over possession of the hospital and the suit properties.

Later in August 2004 the Registrar of Companies published a notice of intended dissolution of the company. This was followed by a Gazette Notice through which the company was dissolved and struck off the register.

The dispute escalated to the Supreme Court following an appeal filed by the Attorney General and the Ministry of Health challenging decision of the Appellate Court to nullify the legal notice and declare it unconstitutional, illegal, null and void.

Appellate judges Asike Makhandia, William Ouko and Agnes Murgo had found the legal notice was an illegality to the extent that it purported to vest or transfer the company’s rights, duties obligation, assets and liabilities of its hospital and the suit properties to the MTRH Board.

They said such inclusion was in violation of the company’s fundamental right to ownership of property under Sections 70 (a) and (c) and 75 of the Constitution. Likewise, the court ordered the Ministry of Health to compensate the company Sh1, 738, 630,267 for deprivation of the suit properties, the hospital and related facilities.

However, the Supreme Court found that the Appellate court erred in determining issues which had not been exhaustively determined by the High Court.

The Apex bench also found that both the superior courts denied the parties their right to be heard on some of the contested issues in the dispute.

“We do agree with the argument that the Court of Appeal ought to have referred the matter back to the High Court for determination of contested issues. Consequently, we find error on the part of the Court of Appeal in determining the matter as it did,” said the judges while setting aside the Appellate court’s decision.

They directed the lands court also determine whether the hospital occupies the disputed land, is it a public or a private hospital and if it is a private hospital when was it licensed to operate as such. If it is public, does it have a license to operate as such, when was the license given and how has the hospital been running?

The court will also find out whether the Uasin Gishu Memorial Hospital Ltd is a public body or a private entity, has it been paying taxes and if not, why?

Further, who have been the Board Members of the company and have they ever changed. If yes, why and when did the changes happen?

Another issue for determination is on why did the District Commissioner significantly chair the affairs of the private company over the years, on whose authority did District Commissioner chair and how did the directorship of the company move to the government.

If the company were to be found to be entitled to compensation and can claim the same, what mechanism should be used to quantify the same.