The Supreme Court has handed the Kenya Wildlife Service (KWS) a major reprieve in a long-running legal battle over hotel construction near the Malindi Marine National Park, setting aside earlier findings that had held it liable for over Sh 120 million in damages.
In a judgment delivered on Friday, the apex court allowed KWS’s appeal, faulting both the Environment and Land Court (ELC) and the Court of Appeal for wrongly treating a prior judicial review ruling as conclusive on the issue of liability.
At the heart of the dispute is a 1997 directive by KWS halting the construction of a hotel by Sea Star Malindi Limited, which had received municipal approval to develop its beachfront property near the protected marine park. KWS claimed the project encroached on a sensitive marine ecosystem and directed the company to stop construction a move the developer challenged in court.
While the High Court’s judicial review decision in 2002 quashed KWS’s stop order as procedurally unfair, Sea Star Malindi later sued for damages, claiming the action had caused it massive financial loss and violated its property rights.
The ELC awarded the company a total of Kshs. 120 million, including Kshs. 90 million for reconstruction and Kshs. 30 million in general damages, along with interest at commercial rates. The Court of Appeal upheld the liability finding and reconstruction costs but reduced general damages to Kshs. 3 million and applied lower court interest rates.
However, the Supreme Court held that the earlier judicial review judgment which only assessed procedural fairness could not be used to conclusively determine liability in a separate civil suit for compensation.
“The trial court’s reliance on the judicial review decision as the sole basis for determining liability denied the appellant [KWS] a hearing,” the Supreme Court ruled, adding that civil claims must be evaluated independently on their own merits and evidence.
The court emphasized that while findings from the judicial review case could support Sea Star’s compensation claim, they could not substitute the trial court’s obligation to conduct a fresh, merits-based hearing.
As a result, the Supreme Court set aside the liability ruling and remitted the case back to the Court of Appeal for a fresh evaluation of the evidence and pleadings to determine liability and any appropriate reliefs.
The case has spanned nearly three decades and spotlighted the tension between environmental protection and property development along Kenya’s ecologically sensitive coastline.
