Talanta Stadium: Court Rejects Fresh Bid in Sh11.4 Billion Land Compensation Dispute

The Court of Appeal has dismissed an attempt by a company linked to the late tycoon Francis Mburu to place a legal warning on the 60-acre parcel of land in Nairobi that now houses the Talanta Sports Stadium.

A three-judge bench ruled that Exclusives Estates Limited failed to prove that its intended appeal would be rendered meaningless if the court did not grant its request.

The company, represented by director Mark Mungai Mburu, had sought to restore a caveat on the property and block Telkom Kenya Ltd from receiving Sh11.4 billion in compensation.

This amount is part of a larger Sh15 billion award to the telecommunications firm for the compulsory government acquisition of the land.

Exclusives Estates also requested that if the government paid the compensation before the appeal was heard, the Sh11.4 billion should be held in a joint interest-earning account.

However, the appellate court noted that the Ministry of Sports, Culture and Heritage had already acquired the land and the public project was underway. The judges stated that if Exclusives Estates were to win its appeal, the result would simply be the reinstatement of its original lawsuit for a full hearing.

"Any loss that may ultimately be established is compensable in damages, and the applicant has neither alleged nor demonstrated that the 1st respondent (Telkom Kenya) would be incapable of satisfying any decree that may ultimately issue," the judges concluded as quoted by Business Daily.

The court also criticised the company for seeking orders that would impact the Ministry of Sports, which was not a party to the proceedings.

"Granting the relief sought would inevitably affect the rights and obligations of persons or entities who are not before the Court without affording them a hearing," the bench added, noting it would reverse actions already completed through the compulsory acquisition.

The case stems from a protracted ownership battle over the land, once associated with the defunct Kenya Posts and Telecommunications Corporation (KPTC).

Postel Housing Co-operative Society claims KPTC transferred part of the land to it in 1993 for staff housing after a payment of approximately Sh21 million.

Following KPTC's dissolution in 1998, which created Telkom Kenya, the Postal Corporation of Kenya and the Communications Authority of Kenya, Postel entered an agreement with Exclusives Estates to develop the property. The project later stalled.

In 2001, Exclusives Estates sued Postel for payment related to development plans. During the legal proceedings, Postel agreed in 2009 to assign its interest in the property to Exclusives Estates, a transaction Telkom Kenya disputes, claiming it occurred without its knowledge or consent.

The matter went to arbitration, which in 2019 awarded the 60-acre parcel to Exclusives Estates. However, the High Court nullified this arbitral award in 2021.

Amid the legal wrangling, the government initiated the compulsory acquisition of the property. A 2017 Gazette Notice announced the government's intent to acquire the land, initially for "Jua Kali" informal sector operations. The process stalled, and in 2019, Telkom requested the government to withdraw the notice.

The conflict reignited in 2020 when the Ministry of Sports sought bids to build a sports complex on the site, then known as Posta Sports Grounds.

Telkom successfully obtained a court order to halt construction pending the resolution of the ownership and compensation dispute. In December 2020, the court ordered that the status quo be maintained, prohibiting any further construction.

Telkom later alleged that the contractor defied the order, setting up a site office and mobilising heavy machinery, arguing this violated its property rights as compensation had not been paid.

In a landmark 2023 decision, the Environment and Land Court ruled that the government had unlawfully acquired a 60-acre parcel of land from Telkom, violating the company's constitutional property rights by failing to provide compensation.

The court ordered the Ministry of Sports to pay Telkom Sh15 billion in compensation, alongside interest at 14 per cent per annum from the date of the judgment until the full amount is settled.

As part of the ruling, Justice Mboya instructed Telkom to hand over its certificate of lease to the Chief Land Registrar within 180 days. The judge stipulated that if the company failed to comply, the existing title would be cancelled and a new one issued directly to the Ministry of Sports.

The court also dismissed competing claims to the property filed by Postel Housing Co-operative Society, Aftraco Ltd and Exclusives Estates, solidifying Telkom's ownership prior to the government's acquisition.

The judgment ultimately cleared the path for the government's development plans on the site, which have since led to the construction of the Talanta Sports Stadium.