An Orange products outlet in Nairobi. Photo/ANTHONY KAMAU

An Orange products outlet in Nairobi. Photo/ANTHONY KAMAU 

 

Postel Housing Co-operative Society has joined a court case involving the sale of 79 acres of prime land to an investor by Telkom Kenya for Sh1.5 billion.

The society is claiming legal ownership of the property in Karen, Nairobi.

It has been enjoined in the court dispute as an interested party saying it purchased 60 acres from the defunct Kenya Posts and Telecommunications Corporation (KP&TC) in 1993 for Sh21 million and entered into an agreement with an agent, Exclusive Estate Ltd, to build 514 houses.

The latest twist comes in the wake of a dispute between Telkom and Aftraco Limited after the latter moved to court over alleged breach of an agreement involving the sale of the property.

Through lawyer Ahmednasir Abdullahi, Salim Sandru, the managing director of Aftraco, moved to court accusing Telkom of acting against the terms of the contract entered on July 5 for the sale of the land along Ng’ong Road.

Mr Sandru told the court that he had paid Telkom Sh152 million being 10 per cent deposit of the purchase price and was in the process of paying the remaining Sh1.37 billion when it cancelled the sale.

Justice Daniel Musinga last week granted Aftraco interim orders restraining Telkom from selling, alienating or mortgaging the property pending determination of the dispute and temporarily tied Telkom to the terms of the agreement for the sale.
But on August 13, Justice Joseph Mutava allowed an application by Telkom seeking to settle the dispute out of court and adjourned the case until November 15 to allow the negotiations between the parties.

Court papers filed by the Sacco say it purchased the property from a loan of Sh21 million from KP&TC and the amount was deducted from the members’ salary by way of check off system over the years until 2006 when the full amount was recovered by KP&TC predecessor (Telkom).

The society alleges that Telkom failed to disclose to the investor that it had no right over the property and the same was subject to a court case and arbitration proceedings.

“Telkom Kenya cannot therefore purport to sell the property when there is a court dispute and arbitration proceedings which are yet to be determined,” said a member of the Sacco Geoffrey Mutisya in sworn affidavit.

Further the co-operative society argues that the current value of the property is Sh4.2 billion “and the agreement to sell at Sh1.5 billion in secrecy is a clear indication of fraud by the parties.”

Through its lawyer, Alloys Kwengu, the Sacco submitted that it was the lawful owner of the property and any consequential orders made by the court would adversely affect them.

And Salim Sandru, the managing director of Aftraco, through his lawyer, Ahmednasir Abdullahi, moved to court accusing Telkom of acting against the terms of the contract entered on July 5 for the sale of the land along Ng’ong Road.

Mr Sandru told the court that he had paid Telkom Sh152 million being 10 per cent deposit of the purchase price and was in the process of paying the remaining Sh1.37 billion when it cancelled the sale.

Mr Sandru argued that the commercial value that stands to be lost if the agreement was not effected could not be compensated through monetary damages or another piece of land.

“The suit property is distinctively unique in Nairobi and Telkom cannot compensate the losses that the plaintiff will suffer,” said Mr Sandru in court documents.

After paying a deposit of Sh152 million, the businessman said he fulfilled part of his bargain as it clearly spelt out in the written agreement.

Consequently, Aftraco hired a panel of consultants for preparatory work on the housing project ahead of ground breaking.

He accused Telkom Kenya chief executive Michael Ghossein for unilaterally rescinding the binding agreement after the Telkom boss informed Aftraco that since a third party by the name Exclusive Estates Ltd had obtained an injunction against the Registrar of Titles, the contract between Telkom and Mr Sandru had been frustrated.

But Mr Abdullahi submitted that the mere fact that a court has issued temporary stay or injunction in favour of a party that is not privy to the contract, “cannot in law frustrate the agreement between Telkom and Aftraco.”

Mr Ghossein further told Mr Sandru that Telkom was willing to refund the Sh152 million already paid as deposit and cancel the deal.

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