Lapfund takes over Mariakani estate as suit flops

The Local Authorities Pension Fund (Lapfund) has taken control and management of Mariakani residential estate in Nairobi after the Court of Appeal declined to grant a request to stop the takeover.

A three-judge bench said the applicant, Mr Benson Mutura (County Assembly Speaker), failed to prove his intended appeal against the High Court’s decision that allowed the takeover in April is arguable.

Justices Wanjiru Karanja, Daniel Musinga and Sankale Ole Kantai also found that the appeal bears no risk of being rendered inconsequential in the event it succeeds as the estate can always be re-transferred back to the City County government.

In urging court to stop the takeover, Mr Mutura had argued that tenants were afraid of being evicted from their houses for non-payment of rent.

The case started in 2018 when Mr Mutura and the estate residents moved to court seeking answers on how the estate was transferred to the provident fund to settle a Sh2 billion debt owed to the pension scheme by the defunct City Council.

The case was challenging the debt-swap deal that saw City Hall lose control and management of the estate to the pension scheme.

The half-century-old estate sitting on a 10.13-acre land is located in Nairobi’s South B has 30 blocks of eight flats. The County Government transferred the estate to the fund in March 2013 to offset the outstanding debt.

The debt was incurred after the defunct City Council failed to remit to the pension scheme the statutory deductions from its employees for several years. It remains unclear where the deductions went or who was receiving the money instead of Lapfund.

However, the petition was dismissed by the High Court in April under the principle of 'res judicata', meaning a similar case had been determined by another court.

A similar petition had been settled through consent at the Environment and Lands Court.

The trial judge said the case was a good example of the term “abuse of the court process.”

The disputed debt-swap deal was approved by the defunct Nairobi City Council’s special finance committee and involved the transfer of several other estates such as Jamhuri, Ring Road Estate in Westlands and Jevanjee Estate in Kariokor.

The case questions the agreement mainly on the ground that the transfer documents did not mention Mariakani Estate but listed several other estates.

According to the petitioner, transfer of public property requires the Ministry of Lands and two independent professional valuers to undertake valuations before the transfer.