Meat company wins Sh1.8bn in 27-year dispute with State

The Court of Appeal has awarded a local firm Sh1.8 billion as compensation for the government’s compulsory acquisition of its slaughter house in 1988 following a vicious 27-year legal battle.

Judges Alnashir Visram, Wanjiru Karanja and Jamila Mohammed have ruled that the government illegally took over Halal Meat Products Limited’s abbatoir in 1988 without offering the firm any financial compensation and consequently denying it profits.

Halal Meat Products built the abattoir in 1978 after taking a long-term loan of Sh47 million from the government but was unable to open it following a standoff with the State over appointments to the slaughterhouse’s board of directors.

The government, under retired president Daniel arap Moi’s regime, took over the Kajiado slaughterhouse following a massive nationwide drought in 1984 through the Kenya Meat Commission.

Mr Moi’s government promised to buy the slaughterhouse from Halal Meat Products but changed its stance and in 1988 attempted to hand the facility back to the firm.

Halal Meat Products, however, moved to court seeking compensation, arguing that the takeover of its slaughterhouse was compulsory acquisition hence it was entitled to compensation.

The Court of Appeal has dismissed the government’s challenge of a High Court ruling delivered in 2005 opposing the Sh1.8 billion award to Halal Meat Products.

The three-judge bench ruled that it has no authority to interfere with Justice Jean Gacheche’s discretion, as she stuck to fair valuations of the slaughterhouse in arriving at the Sh1.8 billion figure.

“We find that the trial Judge properly assessed and awarded the respondent the sum of Sh1,807,772,000 inclusive of opportunity costs up to October 31, 2004 and restoration costs. We also find that she was correct in granting further compensation on a pro rata basis for the period after October 31, 2004 up to and including the date of judgment,” the judges held.

Mr Justice Gacheche’s judgment, however, ordered that the government also be repaid Sh27 million which it loaned to Halal Meat Products, with interest of 12 per cent from 1989 to 2004.

The government’s claim comes to about Sh1.1 billion with interest, which is to be deducted from Halal Meat Products’ award.

The abattoir despite being completed in 1978 remained closed until the government’s occupation following the standoff with Halal Meat Products. The government wanted some of KMC’s board members to added to the abattoir, dubbed Bul Bul, which the firm refused to do.

Mr Moi’s government in 1993 attempted to settle the matter out of court by offering Sh287 million to the firm which held that its abattoir was valued at Sh350 million.