Development of the Sh24 billion Tatu City can now start after the High Court declined to wind up the firm undertaking the construction instead asking the aggrieved minority shareholders to sell their stake.
Construction of the real estate project in Kiambu County has been in abeyance since 2010 when Rosemary Wanja and Stephen Mwagiru moved to court blocking its development and seeking orders for its wind up.
The petitioners accused the other shareholders of excluding them from the affairs of the companies, disregarding their views and sought court orders to have the company sold.
Force a buy-out
â€œThe petitioners are acting unreasonably by seeking to have the companies wound up so as to force a buy-out on their terms even where the court has no jurisdiction to make such orders regarding foreign registered companies,â€ the court ruled while dismissing their first prayer.
Instead, Mr Justice Daniel Musinga, urged the petitioners to pursue an alternative remedy â€” acquisition of their shares through arbitration.
Ms Wanja and Mr Mwagiru claim is for a 14.5 per cent stake on Tatu City and 15.8 per cent on its sister company Kofinaf.
â€œThe court has given us the alternative relief, so in effect, the petitioners have succeeded,â€ lawyer for the petitioners, Mr Paul Wamae said after the ruling was delivered.
The court ordered that the arbitration to determine their stake to be pursued in Kenya and at the London Court of International Arbitration.
The valuation of their shareholding is to be determined by a reputable accounting firm.
Project will continue
â€œThe company continues to exist. The project will continue as scheduled,â€ Mr Ochieng Oduol, lawyer for the real estate firms told Saturday Nation.
The proposed city is being constructed on over 1,000 hectares (2,400 acres). It will comprise of over 22,000 residential units and approximately two million square metres of office, retail, light industrial spaces as well as public amenities including transport service interchanges, health centres and recreational parks, according to the companies.
â€œWith the winding up petition behind us, we can now go full steam with the development of Tatu City, which will change the face of urban development in Kenyaâ€ said Arnold Meyer, the acting chief executive officer of Tatu City Limited.-Nation