Taxpayers have been spared the burden of paying the owners of Orbit Chemicals Sh20 billion as compensation for alleged failure by the State to evict squatters from its 95.2-acre land in Embakasi, Nairobi.
Court of Appeal judges Erastus Githinji, Fatuma Sichale and Sankale Ole Kantai held that the caveat placed on the land did to not stop the owners from using the property, and that it was not the responsibility of the State to evict squatters from private land.
The company, which is owned by Dhiren Chandaria, Ashok Chandaria and Sachen Chandaria — relatives of industrialist Manu Chandaria — won the compensation after the High Court found that Land ministry officials had colluded to illegally take possession of the parcel and subdivide it.
Orbit was awarded Sh6 billion but the amount had ballooned to Sh19.9 billion in 2017 owing to interest that continues to accumulate on it until it is settled.
The State appealed the High Court judgment on grounds that the officials who originated the compensation deal were not authorised to take such action.
The appellate judges reckon that the firm's “loss of use” was not based on failure to transfer or charge the title.
Nothing, they observed, prevented Orbit Chemicals from using the land, adding that, in the event that the firm suffered losses on account of invasion by squatters, such a loss would not be attributed to the government, but to the invaders.
“We say this because the placement of a caveat may hinder transactions touching on title but not the operations on the ground,” ruled the judges.
Orbit purchased the prime land from National Bank of Kenya in 1987, but discovered that the then Registrar of Titles, Jemimah Munjuga, had placed a caveat on it on behalf of the government.
Orbit got the green light from the commissioner of lands in January 2000 lifting the caveat.
The land had been occupied by squatters and Orbit demanded compensation for economic loss during the 13 years the property was under caveat.
State Counsel Waigi Kamau successfully argued that Mr Tuamwari, who computed and negotiated the award, lacked the authority to do so.
“Under Section 8(1) of Government Contracts Act, no contract entered for or on behalf of the government shall bind it unless such contract is signed or countersigned by the Permanent Secretary, Deputy Permanent Secretary to the Treasury or a person or persons specially or generally authorised by either of them in writing,” Mr Kamau said.