Ruaraka land row moves to Supreme Court as Mburu's companies fight Sh1.5bn recovery

Afrison Import and Export Limited Managing Director Francis Mburu when he appeared before the Senate County Public Accounts and Investments Committee(CPAIC) at parliament on Monday 30/04/18 on the disputed Ruaraka Land 

The Sh3.2 billion Ruaraka land battle pitting the government against businessman Francis Mburu has landed  in the Supreme Court.

 Afrison Export Import Limited and Huelands Limited, which are both associated with Mburu in their appeal argue that the Court of Appeal erred by finding that the government bought its own land.

The two firms assert that they had not surrendered any land to the government, adding that they were justly entitled to be compensated.

This comes as the two firms filed a separate case before the High Court, seeking to block Ethics and Anti-Corruption Commission (EACC) from pursuing them to recover Sh 1.5 billion paid by the government.

 Afrison and Huelands argued that the anti-graft agency had jumped the gun when it publicly declared that it would recover the money following the judgment by Court of Appeal Judges Wanjiru Karanja, Francis Tuiyott and Weldon Korir.

 The two firms’ lawyer Duncan Okubasu insisted that his clients had a legitimate expectation that the commission would have to wait for the apex court to settle the case before deciding to act or not.

“Notwithstanding the pendency of the intended appeal and before the appellate process has been exhausted, the respondent has moved with unusual haste to commence recovery proceedings founded solely upon the impugned judgment, thereby treating the issues in dispute as conclusively determined,” argued Okubasu.

Mburu’s sons- Mark Mburu and Justin Mburu are the co-directors of the two companies after he passed.

They claimed that the EACC’s move was premature, contrary to the principles of fair administrative action. According to the two, the commission was enforcing a judgment which had already been challenged before a higher court.

In their judgment, Justices Wanjiru, Tuiyott and Korir unanimously agreed with the Environment and Lands Court that the National Land Commission (NLC) should not have paid for the property, noting that it was money paid by mistake since the same had already been surrendered to the government in 1983, in exchange for Mburu’s firms getting approval for development plans.

“ The State cannot acquire what it already owns. The purported acquisition was, therefore, without legal foundation. Consequently, the payment of Sh 1.5 billion to the appellants was illegal, null, and void. It was money paid under a mistake both in law and fact,” the bench headed by Justice Wanjiru said.

 They observed that although NLC had suggested that since Mburu’s companies- Afrison Export Import Limited and Hueland Limited had been partially paid for the property, then, it ought to be paid the remainder, the boiling issue was whether the property had been handed over for public schools or not.

“ The argument is, in our view, not persuasive. The appeal before us was narrowed down to the question as to whether the sites upon which the public schools are established were surrendered in 1983 in exchange of the approval of the appellants’ development plan. We are not asked to examine the process and legality of the acquisition of the other portions,” they continued.

The Ruaraka parcel is part of a prime chunk of land in a puzzling dispute that now spans close to four decades.

It is a story that dates back 45 years to November 6, 1981, the day Mburu registered Huelands Limited with an eye on acquiring prime real estate.

He planned to build hundreds of houses for the now defunct Kenya Posts and Telecommunications Corporation (KPTC) - then one of the country's biggest parastatals.

Two weeks later, he incorporated yet another firm - Afrison Export and Import Limited - which would own half of the 96 acres he would buy from Israeli-owned Joreth Limited.

One month later, on December 29, Mr Mburu, through his two firms, acquired the land registered as 7879/4.

Consideration for the property was Sh14 million, a princely sum even now.

The next day, Afrison Export and Import Limited was granted a six-month mortgage worth Sh21 million by Continental Credit Finance Limited to fund the construction of 600 government houses.

There are no publicly available records on whether the mortgage provided by the credit firm, which later collapsed, was repaid.

The proposed houses were also never completed, meaning the borrowed funds could well have been spent to pay for the land and make a handsome profit for the owner.

After the project stalled, KPTC, then headed by Kipng’eno arap Ngeny, entered into another mortgage arrangement worth Sh165 million.

It is worth noting that the parcel had never been subdivided formally and records at the national survey offices confirm this.

There were, however, informal subdivisions carried out by the defunct City Council of Nairobi, whose then senior officials were among the beneficiaries, having put up huge commercial and residential properties.

Mburu claimed that the land still legally belongs to his two firms because no transfers have happened, KPTC’s mortgage, which was secured against the land, meant the ownership would have changed hands.

At the same time, he asserted there were records to indicate that the State Corporation serviced the mortgage for a while before it ran into headwinds.

Some 198 houses had been completed before it went broke, homes that would be bought by the police department for its General Service Unit (GSU) personnel. The GSU later fenced off another 19.5-acre tract around the houses as a buffer zone.

Then, there is the 17.7 acres of land where two public institutions, Ruaraka High School and Drive Inn Primary School, sit and the chief’s camp.

What followed was a series of controversies that have lingered in the courts to date. At the heart of it were the two companies, which were demanding Sh 3.2 billion from the government, claiming that the land belonged to them.

At the Environment and Lands Court (ELC), Justices Elijah Obaga, Bernard Eboso and Kossy Bor unanimously agreed that the property was a public utility. They ruled that Mburu had illegally received Sh 1.5 billion because the land had changed from private property to one for the public benefit.

Aggrieved, Afrison and Hueland moved to the Court of Appeal. They repeated the same story that the land was never surrendered to the government; hence, the remainder of the money ought to be paid to the Whispering Palms Estate Limited, which had been appointed. In total, they sought Sh 1.769 billion.

In his statement, Mburu alleged that initially, the idea was to subdivide the property where the schools sit, but he, as the director of Drive-In Estate Developers Limited, decided otherwise.

Mburu’s companies sued the National Land Commission (NLC), the County Government of Nairobi, the Director of Surveys, the Chief Land Registrar, the Lands Cabinet Secretary and his education counterpart, the Director of Public Prosecutions.

He also accused the Ethics and Anti-Corruption Commission of a witch hunt, claiming that it had refused to Pay the remainder of the money.

NLC took a neutral position in the case while the rest argued that upon surrender of the property, the government could not go ahead and re-purchase the same.