The decision of the Environment and Land Court in Safeway Hypermarkets Limited v National Social Security Fund Board of Trustees & Others [2022] KEELC 13327 (KLR) constitutes a further articulation of the principle that title founded upon an unlawful allocation of land is void ab initio and incapable of conferring proprietary rights, even upon a purchaser who acted innocently and for value. The judgment interrogates the intersection between constitutional land governance, statutory indefeasibility of title, and private law remedies arising from defective conveyancing transactions.

Safeway Hypermarkets Limited acquired the suit property from the National Social Security Fund in 2005 at a consideration of Kshs. 30.7 million, with registration effected in 2013. The title held by NSSF traced its origin to a 1995 allocation through entities associated with the 2nd Third Party. In 2016, the National Land Commission, acting pursuant to its mandate under Article 67 of the Constitution, revoked Safeway’s title by Gazette Notice after establishing that the land had been reserved for public use as part of a transport corridor intended for the expansion of Jogoo Road and Outer Ring Road. The Commission concluded that the land was not available for alienation and that the allocation process was unlawful.

Safeway’s attempt to challenge the revocation through judicial review proceedings was unsuccessful, the Court declining to interfere with the NLC’s decision on grounds of public interest. This prompted the institution to seek restitution of the purchase price and related reliefs.

In determining the dispute, the Court affirmed the findings of the National Land Commission and anchored its reasoning on Article 40(6) of the Constitution, which expressly withholds constitutional protection from property that has been unlawfully acquired. The Court held that land reserved for public purposes cannot be the subject of lawful allocation and that any title arising therefrom is void from inception. Consequently, such a title is incapable of passing a valid proprietary interest, regardless of subsequent transfers or the good faith of downstream purchasers.

The Court rejected the argument that Safeway’s status as a bona fide purchaser for value insulated it from the consequences of the illegality at the root of the title. It reiterated that the doctrine of indefeasibility does not operate to sanitize an unlawful allocation and that registration cannot cure a foundational defect in title. The judgment thus aligns with the established jurisprudence that illegality at the point of allocation vitiates all subsequent transactions in the chain of title.

In addressing the role of the National Social Security Fund, the Court found that NSSF failed to conduct adequate due diligence prior to acquiring and disposing of the land. A proper inquiry into the planning history of the property would have revealed that it was reserved for public use and therefore incapable of lawful transfer. By purporting to sell the land and warranting a good and marketable title, NSSF was found to have breached its contractual obligations to Safeway.

The Court ordered restitution in the form of a full refund of the purchase price paid, reasoning that retention of the consideration would amount to unjust enrichment. However, it declined to award general damages or loss of user, reaffirming the orthodox position that general damages are not ordinarily recoverable for breach of contract and that no party may derive additional benefit from a transaction tainted by illegality.

On the question of indemnity, the Court examined the conduct of the 2nd Third Party and found that it acquired no valid title and was fully aware that the land had been reserved for public purposes. Evidence before the Court demonstrated illegality, abuse of office, and conflict of interest, including the involvement of the then Director of Physical Planning, who was simultaneously a director of the 2nd Third Party and played a role in the unlawful replanning process. In light of these findings, the Court ordered the 2nd Third Party to indemnify NSSF for all sums payable to Safeway, including interest and costs, as well as the costs incurred by NSSF in defending the suit.

The Safeway Hypermarkets decision reinforces the constitutional imperative to protect public land from unlawful alienation and affirms the authority of the National Land Commission to review and revoke titles founded on illegality. It further clarifies the legal consequences of such revocation, distinguishing between proprietary claims, which fail in the face of illegality, and contractual remedies, which may be available to prevent unjust enrichment. In doing so, the Court contributes to the continued refinement of Kenyan land jurisprudence on void titles, the limits of indefeasibility, and the allocation of liability arising from defective land transactions.