Absa Kenya lost a bid to have Sh68.5 million paid in 2018 as a result of the compulsory acquisition of its land in Changamwe, Mombasa County, which increased to Sh132 million.
The parcel was purchased by the Kenya National Highways Authority (KeNHA) for the expansion of the Mombasa-Nairobi highway.
The bank, formerly known as Barclays Bank of Kenya, filed a lawsuit against the National Land Commission (NLC) and KeNHA, claiming that the Sh68.5 million it paid for its land was far below market prices.
The lender requested that the award be increased to Sh132 million for the land and building that were demolished to make way for the dualing of the carriageway.
Judge Sila Munyao of the Environment and Land Court dismissed the petition, stating that the valuation report used by the lender was unreliable.
“…the valuation by Tysons Limited, having been done on August 10, 2015, about two years before the intention to compulsorily acquire a portion of the lender’s land, and before KeNHA had marked off the ground to ascertain the acreage, is unreliable and insufficient to challenge the valuation done by the NLC that formed the basis of the award,” said Justice Munyao.
The lender wanted KeNHA compelled to pay 14 percent interest per year until the clearance date.
The lender claimed to be the registered owner of a parcel on Mainland North that housed its Changamwe Branch.
The court heard that KeNHA approached the lender in 2017 with the intention of converting the Mombasa-Nairobi highway into a dual carriageway.
According to the bank, the authority then published a gazette notice announcing its intention to acquire a portion of the property measuring 0.937 hectares.
However, the lender noticed that the acreage quoted in the notice was not accurate and sought to correct it but received no response.
The lender claimed that the award was unreasonable and unlawful because it failed to indicate the value of the land and developments demolished to make way for the highway, as required by section 113(2)(a) of the Land Act.
The bank also stated that the NLC, which acquired the land on behalf of the government, failed to account for 15% statutory disturbance.
Absa Kenya told the court that the award was not fair and just, as required by section 111(1) of the Land Act, because its valuation report dated March 9, 2017 considered all relevant factors and valued the property at Sh132,050,000.
Absa also relied on Tysons Limited’s valuation report.
KeNHA stated that it discovered an error in the acreage of some of the properties and published another gazette notice with the correct acreage on January 12, 2018, inviting the public to attend an inquiry.
NLC, for its part, stated that it inspected the property in March 2017 to determine the extent and nature of the developments, as well as the corridor that the road would traverse.
The court heard that NLC made its representations and issued the award as required by Section 112 of the Land Act.
The NLC concluded that Sh68.5 million was just and fair compensation for the compulsory acquisition of land, subsequent improvements, and a 15% disturbance allowance.
The lender, according to NLC, exaggerated land prices, putting the price of an acre at Sh146 million when the market value in the area was Sh70 million.
“The plaintiff has failed to prove its case against the defendants to the standard required and the suit is hereby dismissed,” ruled Justice Munyao.
