Kenya Railways Corporation, the national government, and the County Government of Kisumu have been ordered to pay more than Ksh76.8 million to the owners of the demolished Tilapia Beach Resort after the Environment and Land Court ruled that public bodies cannot escape court-awarded debts by citing a lack of budgetary allocation.
The court ordered payment of Ksh76,873,366 together with taxed costs of Ksh963,543 and accrued interest at court rates until the amount is paid in full.
The judge also awarded Ksh100,000 as costs for the judicial review proceedings.
Blow for Kenya Railways, Kisumu County
The ruling marks the latest chapter in a legal battle that began after the destruction of Tilapia Beach Resort on August 8, 2019.
The resort and its proprietor, Amina Achieng Ochieng, sued Kenya Ports Authority, Kenya Railways Corporation, the County Government of Kisumu, and the Attorney General, alleging they unlawfully demolished buildings and business facilities on the waterfront property.
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In a judgment delivered on February 24, 2022, the Environment and Land Court found fault with the manner in which the demolition was carried out and awarded compensation for destroyed structures and lost business assets.
Amina was awarded Ksh27 million while Tilapia Beach Resort Limited was awarded Ksh49,873,366. Kenya Ports Authority was cleared of liability, leaving Kenya Railways, the County Government of Kisumu and the Attorney General responsible for settling the award.
Despite obtaining a judgment and a Certificate of Order Against the Government, the successful litigants could not recover the money, prompting them to return to court and seek a mandamus order compelling the relevant public officials to pay the debt.
The court agreed with the applicants, holding that once a judgment has been entered against a public body, payment of the decretal amount is a legal obligation and not a matter of discretion.
The judge consequently directed the accounting officers of Kenya Railways, the national government and Kisumu County to settle the outstanding decree.
“It is not disputed that the respondents are the accounting officers of the defendants in the primary suit who are the judgment debtors to the applicants, and as such have a statutory obligation under Section 88 of the Kenya Railways Corporation Act and Section 21 of the Government Proceedings Act to settle the decretal amount due to the applicants,” the court stated in its ruling.
Kenya Railways’ Argument
Kenya Railways initially denied the plaintiffs’ claim to the land, maintaining that the disputed parcel belonged to the corporation and was therefore not available for private allocation.
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The agency argued that businesses had encroached on railway land and questioned the plaintiffs’ ownership claims.
A survey report presented in court indicated that Kenya Railways had owned the parcel since 1935.
In a replying affidavit, the corporation stated that it had “budgeted for the decretal sum and sought to be allocated the funds to settle the same” and was awaiting a response from the Cabinet Secretary for Finance.
Kenya Railways further maintained that the delay in settling the decree was not deliberate but was occasioned by factors outside its control.
Kenya Railways continues to face significant financial challenges despite operational improvements.
The corporation posted a net loss of about Ksh28.2 billion in the financial year ended June 2025, extending a long trend of losses.
Revenue remained strong at approximately Ksh30.3 billion, but heavy expenses continued to weigh on its performance.
Debt servicing has been a major burden, with the corporation paying nearly KSh26 billion in interest costs on loans used to finance the Standard Gauge Railway (SGR).
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