A simmering commercial dispute between the Lake Basin Development Authority (LBDA) and the operators of Fairways Hospitality Kisumu has escalated into a public controversy, with authorities insisting the matter is strictly a landlord–tenant disagreement and not a political or ethnic conflict as suggested in some quarters.
At the centre of the row is Fairways Hotel Kisumu, a hospitality facility located on land owned by LBDA, a state corporation mandated to spearhead development projects in the Lake Victoria basin.
In a detailed statement issued on March 11, LBDA said the dispute stems from a lease agreement signed in 2019 between the authority and Fairways Hospitality Kisumu Limited, the company associated with businessman Irungu Nyakera.
According to LBDA, the hotel operator accumulated substantial rent arrears over time. The authority says the tenant formally acknowledged an earlier debt of Sh27.4 million in a consent agreement signed on June 3, 2025, committing to a repayment plan for the outstanding rent.
However, LBDA says the company failed to honour the repayment terms and has not paid current rent since May 2025. As a result, the arrears have continued to grow, now standing at over Sh25.9 million.
The authority says it subsequently initiated lawful recovery proceedings as permitted under the lease agreement.
The dispute has since moved through several judicial forums in Kisumu.
LBDA states that when it began distress proceedings to recover the debt, the hotel operators moved to court and obtained temporary orders halting the action. However, the authority says the High Court in Kisumu later dismissed the tenant’s application for an injunction on February 12, 2026, affirming LBDA’s contractual right to recover the outstanding rent.
The same day, according to LBDA, the tenant obtained fresh ex-parte orders from the Magistrate’s Court, which were later set aside after the court determined it had not been informed of the earlier High Court ruling.
The dispute was subsequently taken to the Business Premises Rent Tribunal (BPRT), where the orders obtained by the tenant were later stayed after the tribunal was apprised of the full circumstances of the case.
LBDA maintains that following the High Court decision and formal termination notices, the lease agreement was lawfully terminated on February 12, 2026, and that the current occupation of the property is therefore unlawful.
Nyakera has offered a different account of the dispute, saying his company invested heavily in developing the facility and that the business faced financial challenges during the COVID-19 pandemic that affected the hospitality sector.
He has also alleged that the hotel has recently been attacked by groups of individuals who vandalized property and intimidated staff. Nyakera claims he was forced to fire warning shots into the air to disperse attackers during one such incident.
He estimates losses running into tens of millions of shillings.
LBDA dismisses political and ethnic narratives
LBDA has strongly rejected attempts to politicize the dispute or portray it as an ethnic conflict.
The authority emphasised that the matter is strictly a commercial landlord–tenant disagreement between LBDA and Fairways Hospitality Kisumu Limited and should be treated as such.
It also clarified that Interior Principal Secretary Raymond Omolo has no involvement whatsoever in the dispute, dismissing claims in sections of the media linking him to the controversy as misleading and unfounded.
“The dispute is purely contractual and subject to the legal process. Attempts to drag unrelated public officials into the matter are inaccurate and risk unnecessarily inflaming public sentiment,” the authority indicated.
LBDA further cautioned against efforts to frame the disagreement along ethnic lines, warning that such narratives are reckless and detract from what is essentially a commercial dispute governed by a lease agreement and court processes.
With several court proceedings already having taken place and others potentially pending, the fate of the hotel property will ultimately be determined through the legal system.
Both parties maintain their positions, with Nyakera insisting the business has legitimate interests in the property, while LBDA says it will pursue all lawful avenues to recover public funds and enforce the termination of the lease.
As the dispute unfolds, authorities are urging restraint and cautioning against misinformation, insisting the matter should be resolved through the courts rather than through political or ethnic mobilisation.
