Court orders devolved unit to pay hotelier Sh500 million

Meru Finance Executive Titus Ntuchiu

Meru Finance Executive Titus Ntuchiu who, together with the county’s Finance Chief Officer Kabii Chabari, has been ordered by court to pay Sh500 million to Leopard Rock Lodge for illegal eviction from Meru National Park.

Photo credit: File | Nation Media Group

A Meru High Court has ordered the county government to pay a hotelier Sh500m for wrongfully evicting him from a hotel facility situated in Meru National Park.

Justice Thripsisa Cherere issued the order compelling Meru Finance Chief Officer Kabii Chabari and Finance Executive Titus Ntuchiu, to honour an earlier arbitral award against the devolved unit.

An arbitrator had on December 19, 2019 found the county government liable for illegally evicting Leopard Rock Mico Limited - the owner of Leopard Rock Lodge from its hotel facility and ordered it to pay Sh445,022,388.28.

However, the county government appealed the verdict arguing that it was in conflict with the law but lost. The hotelier moved to court to compel Mr Chabari and Mr Ntuchiu to settle the amount.

The court heard that the amount accumulates Sh2.2 million interest per month, currently adding up to Sh500million which should be paid to Mr Michael Dechauffour-the hotelier.

Suffer losses

Through lawyer Peter Wanyama, the hotelier had protested that he continued to suffer losses through non-payment of the amount yet a decision had been made.

Mr Dechauffour told court that despite serving the county government with a demand letter in May 2021, there was no action taken and asked the court’s help to get his money.

“The applicant obtained a decree for the principal sum of Sh445,025,388.28 together with costs and interest, which sum remains unsettled to date,” read part of the application.

On January 22, 2021, Justice Patrick Otieno dismissed an application by the county government seeking to set aside the 2019 arbitral award.

The arbiter had awarded the hotelier of Sh329.6 million for cost of the facilities built by Leopard Rock Mico Limited and Sh7.4 million as cost of movable assets.

"...the court finds no reason to set aside the award with the concomitant finding that if it cannot be faulted then there is nothing to hold back the enforcement of the award as a judgment of the court," the judge ruled.

The dispute started in 2015 when the former county administration issued a termination notice to Leopard Rock Mico Limited but it was not executed.

Another notice was issued by the current administration in 2018 before the county government forcibly took over the lodge in March 2019 leading to the court case.

According to court documents, Leopard Rock Mico Limited, which entered a lease agreement with the defunct Nyambene County Council for the development of the 40 acre hotel, in 2001 and 2008, was to use the facility until 2034.

The matter was referred for arbitration by a Meru court and in 2019, the arbitrartor Calvin Nyachoti awarded Leopard Rock Mico Limited Sh329.6 million.

But Mr Dechauffour argued that the 2001 lease was backdated to 1997 since his company had taken over the liabilities of the previous owner, Meru Adventure Limited and improved the lodge into a modern hotel.

No mandate

He argued that the award was based on valuation done by Barker and Barton Kenya, LLP, which was approved by both parties at pre-arbitration.

Mr Dechauffour told the court that the 1997 and the 2008 leases were inseparable.

In his ruling, justice Otieno ruled that the arbitrator acted within 'his mandate, power and jurisdiction.'

He further dismissed the county government's argument that the issue of who built the facility was not addressed.

The judge said the High Court has no mandate to review proceedings of arbitration.

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