Telkom Kenya has been sued for allegedly tried to cancel a Sh1.5 billion land transaction with a real estate company.

Aftraco Limited went to court under a certificate of urgency, seeking to stop the telecommunication provider from cancelling the transaction.

Telkom Kenya will not withdraw from its obligations under the transaction contract, and cannot sell the land to a third party until Aftraco’s application is heard and determined, the High Court ordered on Tuesday.

Judge Daniel Musinga issued the injunction after lawyer Ahmednassir Abdullahi, acting for the real estate firm, told him that Telkom Kenya “purported to wriggle out of the contract and attempted to rescind it.”

That attempted cancellation was informed by greed, according to Mr Ahmednassir, who told the court that Telkom intended to sell the property to third parties who offered prices higher than the Sh1,520,000,000 his client had bargained for.

“A court of equity must arrest such unconscionable (morally unacceptable) action and rightly address it,” he told the judge, who proceeded to issue the interim injunction, pending the determination of the suit.

Justice Musinga, who is now the president of the Commercial and Admiralty Division of the High Court, also ordered that the application be served for a hearing of the parties on October 13.

The real estate company says it had already paid Sh152 million — 10 per cent of the agreed purchase price — for the land, and negotiated with its financiers for “billions of shillings to start construction of high-end residential properties”.

The 79-acre land parcel is situated in a prime location on Ngong Road, bordering the Nairobi Polo Club and close to the posh Karen suburb, according to court documents.

Transaction contract

Aftraco wants Telkom Kenya to fully honour its part of the bargain and complete the sale as agreed under the transaction contract.

Telkom offered to sell the land to Aftraco on June 7 after lengthy negotiations, the real estate firm’s director, Mr Salim Sadru, says in a sworn statement filed in court.

The company accepted the offer and the parties prepared a formal sale agreement, which was signed on July 5.

But on September 13, Telkom Kenya’s chief executive Michael Ghossein allegedly wrote to his firm indicating that Telkom had cancelled the contract.

Mr Sadru said the attempted cancellation was not hinged on any term of the contract.