Kenya has been awarded Sh326.2 million in a case filed by Cortec Mining at a World Banks' arbitration institution.
The International Centre for Settlement of Investment Disputes (ICSID) dismissed the case on grounds there was no legitimacy to the claims made by Cortec.
The firm was among businesses that were run by controversial businessman Jacob Juma. The latter was shot dead on May 5, 2016.
Cortec sued the government for $1 billion (Sh100 billion) in damages after then Mining CS Najib Balala, in 2013, cancelled a licence for mining rare earths in Mrima Hill, Kwale county.
Read:
Related:
In a ruling dispatched to parties on Monday, the ICSID, however, declined to award the government the entire amount requested saying that this was overstated.
"The Tribunal declines to grant the respondent’s claim for costs of US$6,452,858 (Sh652.4 million) but reduces the award by 50%. In the result, the government will be entitled to recover costs in the sum of US$3,226,429 (Sh326.2 million)," reads the ruling.
The Tribunal said that it had concluded that former Commissioner of Mines Moses Masibo purported to exercise a discretion he did not possess.
"In any event, the Tribunal does not accept that Masibo performed his statutory functions in good faith and for their intended purpose," the ruling reads.
Cortec contended that their investment in the Mrima Hill project was 'nationalised' in August 2013, after they had expended six years and millions of dollars in exploration and development.
They argued that the issuance of a Special Mining Licence was within the discretion of Commissioner Masibo, and nothing in the evidence justifies the Tribunal in interfering with the exercise of that discretion.
"The government responds that Commissioner Masibo’s discretion was confined by the purpose and subject matter of the Mining Act and that his issuance of SML 351 was entirely ultra vires (beyond his legal power)," the Tribunal says.
It adds: "Because Masibo purported to exercise a discretion he did not possess and ignored statutory requirements he had no authority to ignore, the Tribunal concludes on the merits that the government has demonstrated that SML 351 is not, in any event, a protected investment."
Also see: