Kenyan taxpayers are set to pay a firm owned by relatives of industrialist Manu Chandaria Sh19.9 billion as compensation for land that was illegally acquired and sub-divided by Land ministry officials.
High Court judge George Odunga has ordered the Ministry of Land and Physical Planning to honour a 2012 compensation to Orbit Chemicals, which was awarded Sh6 billion but the amount has now ballooned to Sh19.9 billion owing to interest that continues to accumulate on it until it is settled.
The company, which is owned by Dhiren, Ashok and Sachen, all relatives of Mr Chandaria, won compensation for the 95.2 acres in Embakasi, Nairobi after the High Court found that ministry officials had colluded to illegally take possession of and sub-divide it.
The interest, which has now more than doubled the principal, was to start accumulating from the judgment date until it is fully paid.
Orbit last year returned to court arguing that the government has since 2012 refused to settle its award, and asked Justice Odunga to compel the Treasury to pay.
The firm argued in suit papers that out-of-court negotiations with Attorney-General Githu Muigai had failed to kick off as no offer is yet to be placed on the table for it to consider.
The Lands ministry had said that its failure to pay Orbit this year was because the firm only furnished it with a certificate of order against the government on March 30, the same day that the budget for the current financial year was read.
But Justice Odunga held that the reasons advanced by the ministry were not satisfactory.
“In my view, the reasons advanced by the respondent for the failure to satisfy the decree are flimsy excuses meant to deny the applicant the fruits of its judgment and I have no reason to decline to grant the orders sought herein,” said the judge.
“In the premises I hereby issue an order of mandamus against the respondent compelling him to pay the applicant the sum of Sh6,015,113,000.00 with accrued interest with effect from the date of the Judgment till payment in full and costs as agreed between the parties in the settlement agreement.”
The judge held that the ministry did not seriously deny claims by Orbit that it had taken the firm through cat-and-mouse games since 2012 when the initial judgment was delivered, which was a sign of laxity on the government’s part.
Orbit, founded in 1972, produces industrial chemicals and sells them to other players in the manufacturing industry.
The firm’s website lists Unilever, Johnson Diversey, Reckitt Benkiser, Farmer’s Choice and Del Monte as part of its vast clientele. Dhiren serves as Orbit’s chief executive.
The Lands ministry argued that there is an elaborate procedure for processing of court awards against the government, which entails the production of pleadings, certified copy of the judgment and decree, certificate of order against the government, approval and allocation, among others.
It added that the process is aimed at ensuring accountability. But Justice Odunga ruled that the financial constraints cited by the ministry are not reasons for evading payment, but should only be a factor in determining the mode of payment of the debt.
Orbit purchased the prime land from National Bank of Kenya #ticker:NBK in 1987, but discovered that the then Registrar of Titles, Jemimah Munjuga, had placed a caveat on it on behalf of the government.
Orbit, after years of pursuing land officials, finally got the green light from the commissioner of lands in January 2000 lifting the caveat. But the property’s file had by the time gone missing at the Land registry.
Orbit’s lawyer, Michael Eustace Aronson, later said that he had investigated the matter with the help of then deputy commissioner of lands, Abdi Osman. He added that high-level consultations with the then Lands permanent secretary got him the message that “the matter was political and emanated from a higher source”.
Justice Odunga’s decision has opened the door for Orbit to pursue Land principal secretary Nicholas Muraguri for contempt of court if its award is not settled.
The process would, however, require Orbit to return to court if the money is not paid within the agreed time.