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<blockquote><div class="quotetitle">Quote from <a class="profile-link highlight-moderator" href="https://lawguide.co.ke/understanding-law/legal-forum/profile/lawyer/">Lawyer</a> on July 21, 2025, 9:00 am</div><div id="pl-7094"  class="panel-layout" ><div id="pg-7094-0"  class="panel-grid panel-no-style" ><div id="pgc-7094-0-0"  class="panel-grid-cell"  data-weight="1" ><div id="panel-7094-0-0-0" class="so-panel widget widget_sow-editor panel-first-child panel-last-child" data-index="0" data-style="{&quot;background_image_attachment&quot;:false,&quot;background_display&quot;:&quot;tile&quot;,&quot;background_image_size&quot;:&quot;full&quot;,&quot;background_image_opacity&quot;:&quot;100&quot;,&quot;border_thickness&quot;:&quot;1px&quot;}" ><div
			
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	<p dir="ltr" data-pm-slice="0 0 []">In a significant ruling, the Supreme Court of Kenya has sent a 27-year-old legal battle between Sea Star Malindi Limited and the Kenya Wildlife Service (KWS) back to the Court of Appeal for further review. The dispute centers on a prime piece of land in Malindi, adjacent to the Malindi Marine National Reserve and Park, where Sea Star intended to construct a luxury tourist hotel. The decision marks a pivotal moment in a case that has navigated the Kenyan judicial system since 1998, highlighting issues of property rights, environmental conservation, and governmental authority.</p>
<p dir="ltr">The conflict began in 1994 when Sea Star Malindi Limited, owned by Gianluigi Cernuci and Pizzigoni Mania, purchased a plot of land, identified as LR 3170 Malindi, with the goal of developing a high-end hotel. The land, registered as private freehold property, was surveyed in 1914 and had no prior disputes over ownership. In 1996, the now-defunct Municipal Council of Malindi approved Sea Star’s building plans, and construction commenced, reaching approximately 40 percent completion by April 1997 with an expected completion date of December 1, 1997.</p>
<p dir="ltr">However, KWS intervened in April 1997, ordering Sea Star to halt construction. The agency claimed the development encroached on a protected area within 100 feet of the Indian Ocean’s high-water mark, part of the Malindi Marine National Reserve and Park. KWS argued that the hotel’s construction, including a septic tank on porous coral reefs, threatened the delicate marine ecosystem. In June 1997, KWS granted temporary permission for Sea Star to complete the existing structure under strict conditions, prohibiting additional constructions or further encroachment. By August 1997, KWS revoked this permission, alleging non-compliance, and deployed armed wardens to occupy the site, effectively stopping all work. This action led to significant financial losses for Sea Star, which had secured a Sh70 million loan at a 35 percent annual interest rate to finance the project.</p>
<p dir="ltr">Sea Star sought legal redress, arguing that the land was private property and not subject to government control under Legal Notice 99 of 1968, which designated certain areas for marine park protection. The company contended that KWS’s actions were unjust, lacked legal basis, and caused substantial economic harm, including construction delays, material deterioration, and the inability to repay the loan. In 2002, the High Court ruled in Sea Star’s favor, quashing KWS’s order to stop construction and affirming the land’s private status. The court found that KWS’s actions were based on a misapprehension that the government had jurisdiction over the property, which was not part of the protected marine park.</p>
<p dir="ltr">The case progressed to the Court of Appeal, where a majority ruling by Justices Pauline Nyamweya and George Odunga upheld the High Court’s decision, ordering KWS to pay Sea Star Sh454 million in damages, covering construction costs and reduced general damages from Sh30 million to Sh3 million with interest. Justice Gatemba Kairu dissented, suggesting the case be remitted to the Environment Court for further evaluation. KWS appealed to the Supreme Court, challenging the liability and damages awarded.</p>
<p dir="ltr">On June 27, 2025, the Supreme Court issued its judgment, overturning the Court of Appeal’s decision and remitting the case back for a re-evaluation of evidence on liability and related issues. The court found that the appellate court had not adequately assessed KWS’s liability or the extent of damages owed to Sea Star. The ruling aims to ensure a thorough review of the evidence, balancing the private property rights of Sea Star with KWS’s mandate to protect Kenya’s natural resources.</p>
<p dir="ltr">The Supreme Court’s decision underscores the complexity of the case, which pits private property rights against environmental conservation. Sea Star maintains that it held absolute ownership of the land and was entitled to develop it as approved by the Municipal Council. KWS, however, insists that the construction posed a significant ecological risk to the marine park, justifying its intervention.</p>
<p dir="ltr">The referral back to the Court of Appeal prolongs a dispute that has already spanned nearly three decades, raising questions about judicial efficiency and the financial burden on taxpayers. The Sh454 million in damages, if upheld, will be borne by the public, as KWS is a state agency. The case also highlights the challenges of reconciling development with environmental protection, particularly in ecologically sensitive areas like Malindi’s marine reserve.</p>
<p dir="ltr">For Sea Star, the ruling offers another opportunity to secure compensation for losses incurred due to the halted construction and subsequent deterioration of the partially built hotel. The company has argued that KWS’s actions not only delayed the project but also necessitated costly demolition and reconstruction efforts. Conversely, KWS’s defense hinges on its responsibility to safeguard Kenya’s biodiversity, a critical mandate in a country renowned for its wildlife and natural heritage.</p>
<p dir="ltr">As the Court of Appeal prepares to revisit the case, legal analysts anticipate a detailed examination of the evidence, including the precise boundaries of the protected marine park and the legality of KWS’s actions in 1997. The outcome could set a precedent for how Kenya balances private land rights with environmental conservation, particularly in coastal regions where tourism and ecological preservation often intersect.</p>
<p dir="ltr">The Supreme Court’s decision to send the Sea Star Malindi and KWS dispute back to the Court of Appeal reflects the judiciary’s commitment to ensuring a fair and evidence-based resolution. As the case moves forward, it will continue to draw attention to the broader issues of land use, environmental protection, and the role of state agencies in regulating private development. For now, Sea Star Malindi Limited and KWS await the next chapter in a legal saga that has already shaped Kenya’s judicial and environmental landscape for nearly three decades.</p>
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