Gavel illustrationA legal battle over a prime waterfront parcel in Tudor Creek, Mombasa, has slowly transformed from a private landownership dispute into a matter of national interest, with taxpayers potentially facing a hefty compensation bill.
The contested land, just over two hectares, sits strategically along the oceanfront at Port Reitz.
The dispute arose during the Mombasa Port Area Development Project, aimed at expanding transport and port infrastructure.
Several public agencies, including the Kenya Ports Authority (KPA) and the National Land Commission (NLC), identified Tudor Creek Limited’s land for possible acquisition.
Court documents show that complications began when the NLC issued notices of intention to acquire land but referenced the wrong parcel in the Gazette Notices.
Tudor Creek Limited clarified through an affidavit that the correct land was MN/VI/4158.
“It is the Complainant’s (Tudor Creek) case that NLC gazetted its intention to acquire the suit property on January 9, 2015, through Gazette Notice No. 149 of 2015, later issuing a correction on April 24, 2015, through Gazette Notice No. 2740 of 2015,” court documents read.
The company also noted that the Gazette mistakenly identified the mother title as MN/VI/2480 instead of MN/VI/2430.
Tudor Creek’s director, Abid Mahmud Alam, swore an affidavit confirming the correct parcel as MN/VI/4158.
Following this, the NLC reviewed grants and dispositions and, despite challenges from the County Government of Mombasa, upheld Tudor Creek’s ownership.
An award letter dated October 6, 2016, valued the 1.5124-hectare portion earmarked for acquisition at Sh171,908,458.
Despite the award, Tudor Creek claims compensation was never paid.
Public agencies, particularly KPA, proceeded with development, reclaiming the ocean frontage and integrating it into port and railway expansion works.
The reclamation resulted in the loss of approximately 258 metres of ocean frontage, described in the judgment as the “sole of the boot,” highlighting its strategic importance.
“As a result, the Complainant lost its 258-metre ocean boundary and the strategic attributes of the property and the residual land, constituting less than half the parcel, was rendered commercially unviable and unsuitable for the planned sugar refinery plant,” the judgment reads.
Tudor Creek, in the Lands Acquisition Tribunal, argued that the partial acquisition deprived it not only of physical land but also of the economic value and strategic use of the remaining parcel.
In response, the NLC argued that the remaining 1.47 hectares constituted a substantial and viable portion, suitable for commercial use.
The commission also stated that it had not compulsorily acquired MN/VI/4158 or any other interest in the land at the time, noting that the property was not included in the initial Gazette Notices and was explicitly deleted from the acquisition list in December 2018.
NLC emphasised that compulsory acquisition applies only to parcels requested by public institutions for demonstrable public purposes and dismissed claims regarding the residual land’s alleged uselessness or the proposed sugar refinery as speculative.
“They asserted that compensation should be limited to the portion actually acquired, together with any losses caused by injurious affection, rather than extending to the entire parcel,” the judgment noted.
KPA supported this position, denying liability for the alleged acquisition of Tudor Creek’s land and emphasising that it is not the acquiring authority under the Land Act, 2012.
The authority refuted claims of occupying or using the property, questioned the validity of the company’s valuation, and proposed sugar refinery plans.
KPA maintained that lawful compensation could only arise from an official award by the NLC and requested that the complaint against it be dismissed.
Court records also highlighted that KPA had occupied portions of the land since 2012, several years before formal acquisition notices were published.
Tudor Creek submitted that this prolonged occupation affected its ability to conduct any business activities on the property.
The tribunal considered the value of the acquired land, the loss of ocean frontage, and injurious affection on the residual property.
It acknowledged that the 258-metre ocean frontage, the most strategic section, had been lost, significantly reducing the land’s marketability and utility.
Based on valuations by Kenval Realtors, compensation for the 0.628 hectares directly and indirectly acquired was assessed at Sh70,218,950, with an additional 15% disturbance allowance, bringing the total to Sh80,751,792.50.
Compensation for injurious affection, accounting for the diminished value of the residual property, was assessed at Sh81,631,000.
The court also awarded damages for trespass due to KPA’s occupation since 2012, setting an annual payment of Sh20,000,000 until full payment, and added aggravated damages of Sh5,000,000.
In its final orders, the court directed the port authority to compensate Tudor Creek Limited for the unlawful acquisition, injurious affection, and trespass, and to settle interest at the Central Bank’s base lending rate from June 2012 until full payment.
The judgment also ordered annual compensation of Sh20,000,000 for trespass and aggravated damages of Sh5,000,000.
Taking all these components into account, the total financial obligation to Tudor Creek Limited exceeds Sh400 million.
The tribunal stated: “An order be and is hereby issued directing the 4th Respondent to, within 45 days of this judgment, pay the Complainant the sums assessed in respect of acquisition, injurious affection, interest, general damages for trespass, and aggravated damages.”
With KPA being a state agency funded by public revenue, the ruling raises the possibility that public funds could be used to meet this substantial payout.
