NLC fights Sh1bn payout for police hospital land

The commission has also raised concerns that Carlisle has limited recoverable assets, warning that taxpayers could permanently lose the money if the compensation is paid out and the title is later found to have been unlawfully acquired.

The case marks a new turn for a long-running dispute linked to compensation for land acquired for the Nairobi-Mombasa Standard Gauge Railway, with NLC now directly attacking the developer’s title after suffering setbacks before the Land Acquisition Tribunal and the courts.

The commission has sued Carlisle and joined the Kenya Railways Corporation, the National Police Service and the Attorney-General as interested parties.

Court documents show NLC is seeking cancellation of Carlisle’s title and a declaration that a compensation award of Sh1 billion issued in favour of the company is unenforceable because it was allegedly obtained through fraud and misrepresentation.

According to NLC, the disputed property was originally reserved for the NPS and had been earmarked for construction of a police hospital.

“The suit property belonged to the second Interested Party and had been set aside for construction of the National Police Service Hospital whose designs were complete. Therefore, the suit property was public land and was not available for alienation to private entities,” NLC states in its pleadings.

The commission argues that Carlisle’s claim is based on a letter of allotment dated August 27, 1998, whose conditions were never fulfilled within the required period. “The plaintiff states that the defendant did not make payment within the prescribed period and only produced a receipt dated December 19, 2014, approximately 16 years after the offer,” he narrates.

It further claims that by the time the payment was allegedly made, the allotment had already expired and the land was no longer available for allocation.

According to the suit, Carlisle later obtained a title and proceeded to subdivide the land into 136 plots despite the property allegedly being reserved for public use.

The commission says the developer subsequently sought compensation after the government compulsorily acquired the land for the SGR project.

NLC acknowledges that compensation awards amounting to Sh1.654 billion were approved in May 2016 in respect of three parcels, including the disputed property, and that the Ministry of Interior later requested release of the funds to the NPS.

NLC warns that there is an imminent risk of losing public money if the award is enforced. The suit is pending hearing and determination.

However, the commission says Carlisle later moved to the Land Acquisition Tribunal and secured a judgment on February 7, 2025, awarding it Sh712.38 million in compensation and Sh18.75 million in general damages.

With interest accruing from the date of acquisition, NLC says the award has now risen to approximately Sh1 billion.

The commission argues that the tribunal was not told crucial facts concerning the land’s history.

Among the issues allegedly concealed were that the allotment had lapsed, the National Police Service had already been compensated for the property, and the land had been reserved for public purposes.

“The Plaintiff states that the Defendant’s claim constitutes a fictitious and fraudulent claim against public funds,” the suit says.

“There exists a real and imminent risk that public funds amounting to over Sh1 billion will be lost irrecoverably if the defendant is paid,” it says.

The commission further argues that Carlisle is a “briefcase company” and may be unable to refund the money if the payment is later found to have been made unlawfully.

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