A multi million shillings worth compensation to real estate developer for the compulsory acquisition of five plots in Nairobi’s posh Karen neighbourhood for the construction of the SGR has run into a headwind after a partner in a joint venture lodged a suit at the high court in whicvh he seeks to block the payment.
Gamal Shoeib Soliman of Urban Solutions Real Estate Limited has sought recourse after learning that his former partner Halal Meat Products with whom they were in a joint venture to develop Karen heights is about to be paid the compensation individually through a calculated process, and apparent non-disclosure after the joint venture was rendered untenable by the SGR.
He is seeking the intervention of the court after after learning that his former partner Halal Meat Products with whom they were in a joint venture to develop Karen heights is about to be paid the compensation individually and has on the other hand refused to refund Ksh 100, 000,000 he advanced Halal to secure the plots in question for the proposed Karen Heights.
Gamal seeks an injunction against the National Land Commission to be stopped from remitting any amount considered for compensation for the compulsory acquisition of four parcels of land or that it may be deposited in a joint interests earning account to beheld in joint names of the advocates of the parties until a hearing and a determination is made in the matter.
Urban Solutions Real Estate Limited entered into a joint venture agreement with Halal in September 2015 for the mega construction of commercial and residential developments to be known as Karen heights on the parcels on land in question.
His lawyer Eddy Orinda in court filing states that under the Joint venture agreement Halal would provide parcel so land for the mega construction while Urban would provide requisite finances and that Halal would subsequently transfer the said property to Urban under lease agreements.
For the purposes of effecting the joint venture agreement, Urban advanced Ksh100,000,000 to ” enable Halal discharge the various encumbrances(liabilities) that were laden upon the various titles while additionally expending approximately Ksh800,000,000 toward change of user, obtaining of consents, public advertisements of the project in the dailies, project designs, consultation, professional fees and other services for purposes of the said project.
“In spite of the foregoing, GoK through a Kenya Gazette Number 12526 dated December 22 2017 through NLC has since compulsorily acquired all those plots that Karen Heights was to be constructed on.
Having your cake
The effect of the compulsory acquisition is that Karen heights Development project became untenable thus effectively terminating the Joint Venture Agreements and causing immense losses to Urban Solutions Real Estate Limited.
But the annoying twist is that “despite copious inquiries Halal has elected not to disclose any information to Urban with regard to the compensation details while at the same time refusing to return the Ksh100 million- the amount Urban advanced to halal so as to discharge its financial obligations!”
“The applicant herein has since been able to discern that the form of M/S Abib and associates, Advocates ostensibly acting on the first respondents instructions filed for compensation from the second respondent(NLC) in the name of Halal only without considering that the applicant also had an interest in the said properties on account of the money already advanced/ expended by virtue of the Joint Venture Agreement,” the lawyer states.
He said for the sake of justice Halal should also be compelled to return the Ksh100 million advance.
“It has come to the attention of the applicant that NLC has already published a Gazette Notice with details of the compensation amount to be paid to the first respondent(Halal),” the lawyer said, talk of having your cake and eating it!
Orinda said Urban remains apprehensive that Halal will never refund the monies advanced to it, moreso if NLC goes ahead and remits the compensation amount directly.
According to the suit Halal is guilty of failing to disclose information regarding the compensation plan, refusing to open an escrow account with Urban till their dispute is ironed out in court and failing to observe the terms of the agreement as to repay the money advanced to it in case of such an action as the compulsory acquisition for the Phase2A of the SGR.
The case will be heard on February 4 2019.