Court orders Mining CS to intervene in Kajiado-Tata Chemicals rates dispute

A court has ordered Petroleum and Mining Cabinet Secretary John Munyes to resolve the Sh17 billion land rate dispute between Kajiado County Government and Tata Chemicals Magadi Ltd within six months.

Mr Munyes is supposed to immediately convene an arbitration between the two parties under the supervision of the court, High Court Judge Reuben Nyakundi has ruled.

Justice Nyakundi said the arbitration should determine the exact acreage of land leased by Tata Magadi Ltd that the county government is supposed to charge land rates.

Not rateable

The court has also averred that the area covered by Lake Magadi and the 145-km railway land stretch from Magadi to Konza are not rateable by the county government as they belong to the national government and the Kenya Railways Corporation respectively.

“The parties shall hereby submit themselves to a comprehensive consultative process under the supervision of the court and in conjunction with the lead ministry (Petroleum and Mining) with a view to negotiating the amount of land rates payable by the company since the Finance Act (2014) took effect.

"The process should also determine the exact acreage on which the company should pay its rates,” ruled the judge.

To further buttress the urgency of the process, Justice Nyakundi said the dispute must be resolved within six months, meaning it should be concluded by November this year.

In an apparent legal score against the multinational, the court validated the County’s Finance Act (2014), the basis of which the devolved unit uses to claim Sh17 billion as land rates from the 224,991 acres of land which the company has leased.

The rate as per the Act is Sh14,000 an acre.

Due process

In a case filed at High Court in Kajiado, Tata Chemicals Magadi Ltd wanted the County’s Finance Act declared null and void saying it was enacted without following due process.

The company, represented by the firm of Walter Kontos, further wanted the court to grant permanent injunction restraining the county government from ever demanding land rates arrears for the period in contention (2013-2018).

In one submission, it actually put it across that the county government’s best remedy would be to await the expiry of its lease on November 1, 2053, for them to negotiate new terms of the land lease.

The county government’s lawyers Mumo Matemu and Mayian Sankale put up a spirited objection against this position.

The multinational also wanted a debt collector appointed by the county government stopped from demanding the arrears.

The company questioned the legality of the appointment, saying the matter that should have been dealt with by the Public Procurement Administrative Review Board and not the court.

Risk collapse

In its submissions, the company stressed that charging the land rates at per the Finance Act would make them collapse as they have been surviving through bailouts by their parent company in India.

Justice Nyakundi averred that it was not the business of the court to determine the right or affordable rates but the responsibility of the county assembly, which made the law.

The company further noted that it had spent Sh276 million on corporate social responsibility especially on water, health, education and infrastructure for the local community.

It argued that it could be exempted from tax obligations because the role were supposed to be carried by the devolved unit.

In addition, the firm said it had already paid Sh187 million to the county government in rates and royalties over the years.

The judge further prohibited interference of the company’s operations by the county government or its agents.

This order seems to have been given to protect the company from invasions by local community members as happened on January 17 and March 29, where Governor Joseph Ole Lenku and several MCAs staged a demonstration within the premises.

The county government had earlier threatened to shut down the giant soda ash processor.