Tata Chemicals Magadi Limited v County Government of Kajiado (Civil Appeal 530 of 2019) [2025] KECA 1721 (KLR)
The bottom line
#Kenya's Court of Appeal cancelled Kajiado County's Kshs.17.4 billion demand against Tata Chemicals Magadi, ruling counties cannot levy mineral royalties or unprocedural land rates.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the respondent's demand for Kshs.17,448,485,646/= in land rates and royalties arrears for 2013-2018 was lawful
- 2.Whether the imposition of the rates and royalties by the respondent on the leased premises was within the obtaining statutes and constitutional
- 3.Whether by the imposition of the rates and royalties and the conduct of the respondent, the constitutional rights of the appellant had been infringed
Key legal issues
#Lawfulness of the demand for Kshs.17,448,485,646/= in land rates
The demand was arbitrary and illegal because the rates were never determined under the Rating Act and the Valuation for Rating Act, which mandated a formal valuation process, and breached Article 201's principles of openness and accountability
The Rating Act and Valuation for Rating Act required a formal process for valuing properties, including creation and maintenance of a valuation roll, public participation and a right to object to valuations. There was no evidence that the rates demanded resulted from any such determination. The respondent therefore imposed rates outside the statutory framework, denying the appellant an open and objective framework to challenge the rates, breaching Article 201 of the Constitution.
Whether the county could levy royalties on soda ash
The demand for royalties offended the Mining Act and Articles 62(1) and (3) of the Constitution; royalties on minerals are payable to the National Government, which prescribes the rate
Under both the repealed Mining Act and the Mining Act, 2016, mining activities are regulated by the National Government and royalties are payable to the National Government with rates prescribed by the Cabinet Secretary. Minerals are public land vested in the National Government under Article 62(1) and (3). The county's own Finance Act purporting to charge royalties on soda ash, and the inclusion of royalties in the demand, were therefore unconstitutional.
Whether the respondent's closure of the appellant's operations infringed constitutional rights
The closure breached the lease Agreement with the National Government, breached Article 209(5), and infringed the appellant's right to property under Article 40
Article 209(5) prohibits exercise of county taxation and revenue-raising powers in a way that prejudices national economic policies, economic activities across county boundaries or national mobility of goods, services and capital. By sending security and police officers to shut down the appellant's operations to force payment, the respondent paralysed those activities and thereby contravened Article 209(5) and infringed the property rights protected by Article 40.
Whether a county government may impose rates on properties exempted or on minerals
A county government acting ultra vires in imposing rates on exempted properties also contravenes Article 209(5), as held in County Government of Kwale v Kenya Airports Authority, which the court applied
The court adopted the reasoning in County Government of Kwale v Kenya Airports Authority, where this Court held that a county government imposing rates on exempted properties acts ultra vires and contravenes Article 209(5). It applied that principle to the present case, where the leased premises were held under leases with the National Government, rates and royalties were reserved to the National Government, and minerals were vested in the National Government.
Legal principles established
#- A county government may not demand or collect land rates that have not been determined in compliance with the Rating Act and the Valuation for Rating Act and Articles 201 and 209(3) and (5) of the Constitution; such a demand is arbitrary and illegal
- A county government cannot levy royalties on minerals; under the Mining Act and Article 62 of the Constitution royalties on minerals are payable to the National Government
- County taxation and revenue-raising powers may not be exercised in a manner that paralyses national economic activities across county boundaries, contrary to Article 209(5)
Court orders
#- 1.The appeal is allowed
- 2.The judgment dated 3rd May 2019 by the High Court of Kenya at Kajiado (R. Nyakundi, J.) is set aside
- 3.The petition dated 22nd January 2019 is allowed in terms of prayers 1, 3, 4, 5, 6 and 7
- 4.Each party will bear its own costs of the proceedings before the High Court and of the appeal
- 5.The judgment is delivered in accordance with Rule 34(4) of the Court of Appeal Rules following the death of the Hon. Mr. Justice Fred Ochieng
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Kajiado
- Constitutional Petition dated 22nd January 2019
- Jurisdiction invoked
- First appeal to the Court of Appeal under Rule 31(1)(a) of the Court of Appeal Rules, 2022
Relief refused
#General and punitive damages for loss of production (prayer 8)
The petition was allowed only in terms of prayers 1, 3, 4, 5, 6 and 7; prayer 8 for damages was not included in the orders granted
Costs
Each party will bear its own costs of the proceedings before the High Court and of the appeal.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
Without the rates having been determined under the Rating Act and the Valuation for Rating Act, we find that the demand made to the appellant was arbitrary and illegal.
the demand of Kshs.17,448,485,646/= that related to royalties was not payable under the Mining Act and Article 62 of the Constitution
The judgment dated 3rd May 2019 by the High Court of Kenya at Kajiado (R. Nyakundi, J.) is hereby set aside, and the petition dated 22nd January 2019 is allowed in terms of prayers, 1, 3, 4, 5, 6 and 7.
Each party will bear its own costs of the proceedings before the High Court and of the appeal.
The respondent did not put in place an open and accountable framework for determining the payable land rates, and the appellant as a landowner was not provided with an open and objective framework that allowed it the opportunity to challenge whatever rates that the respondent was proposing that it pays.
Issues in the judgment
#The judgment states the colonial lease was dated 20th March 1928 but later says 'It is common ground that on 20th March 2028 the Kenya Colony and Protectorate entered into a lease with the appellant', an apparent typographical contradiction in the date
The acreage measurements of the leased parcels differ between the factual background (211,104 acres and 11,678 acres) and the later recital (211,110 acres and 11,364 acres)
The respondent denied demanding royalties while its Finance Act and demand letter included royalties; the court noted the contradiction
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Tata Chemicals Magadi Limited v County Government of Kajiado (Civil Appeal 530 of 2019) [2025] KECA 1721 (KLR)", Case Analysis (2025). Court of Appeal at Nairobi (appeal from Kajiado Constitutional Petition). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1721/eng@2025-10-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.