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Companies

Orbit loses Sh1bn claim against NBK

Mary Kasango
Justice Mary Kasango. FILE PHOTO | NMG 

National Bank of Kenya (NBK) has escaped paying a manufacturer of chemicals more than Sh1 billion in a protracted land dispute in Mukuru Kwa Njenga after a judge ruled that the suit was time-barred.

In the case, which has been in court for close to two decades, Justice Mary Kasango said Orbit filled the case against NBK beyond the six year window for bringing disputes to the courts.

The manufacturer of chemicals accused NBK of selling it 38.54 hectares in Embakasi for Sh10 million in March 1987 without evicting squatters who had invaded the property.

Orbit was seeking Sh3 million monthly compensation since 1987 on claims that it was unable to use the property for economic gain.

Justice Mary Kasango agreed with Orbit on NBK’s responsibility to evict the squatters, but argued the suit was time barred and should be dismissed.

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“Indeed it did seem to me that there was never an intention to give orbit vacant possession. NBK’s intention, it seems, was to abandon Orbit and to leave it struggle with the removal of squatters who seemed to have been on the property, even as NBK sold the property to Orbit,” the judge said.

“It is common ground that the cause of action in this matter was based on contract and that section 4 of the Limitation of Actions Act prohibits suits filed after the end of six years from the date on which the cause of action accrued,” the Judge said.

Orbit brought the NBK suit to court in 1999, which the judges says came 12 years after the breach.

Before the NBK suit, Orbit had sued the government for placing caveats or restriction on the property, but the Court of Appeal last year overturned a Sh6 billion compensation to the firm.

The High Court had in 2012 awarded the company Sh6 billion plus interest, after the government placed caveats on the land.

But on appeal, a Bench of three judges said whereas it is not disputed that the Registrar had placed a caveat, it was not the same as saying that the government encouraged squatters to move on to the land.

“If anything, the obligation to ward off squatters never shifted to the government but remained the responsibility of the respondent (the company). We also note that the respondent's “loss of use” was not based on failure to transfer or charge the title but on loss of use of land,” the court said.

The company had accused NBK of breaching the terms of the contract, which resulted in squatters invading the land. The company said it could not access the land, incurring losses.

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