All leases of prime plots inside the Port of Mombasa allocated to private firms are under review.
This was revealed in an affidavit filed in the High Court in Mombasa challenging a case filed by a firm owned by the family of former Mombasa Governor Hassan Joho against KPA’s decision to suspend its lease.
On March 3, this year, KPA stopped the Johos’ firm, Portside Freight Terminal from developing a plot measuring 70,000 square feet inside the Port of Mombasa saying it wanted to review the lease agreement.
KPA claims the lease did not comply with the constitution and particularly the provision of the public procurement and Assets Disposal Act 2015.
KPA General Manager Corporate Evelyne Mwamure said in the affidavit that the new KPA board wants to probe whether the leases are in compliance with KPA corporate land policy and whether it can be varied or reviewed.
“On March 3, this year KPA issued instructions to the plaintiff to suspend any developments on the leased portions to allow the board of directors review the two leases,” said Mwamure.
According to court documents before Justice Ogla Sewe, the firm leased the plot from KPA for 20 years in July 2022 to construct a modern warehouse at BP Shed 6 and 5.
Portside has now filed a case at the High Court in Mombasa to challenge the move by KPA saying it went against their agreement. Portside’s lawyer Paul Buti said KPA leased his client plot number Mombasa/block1/492. He said the agreement states that in the event of any dispute, arising out of the lease agreement, it should be settled through negotiation by the parties within 21 days.
“If negotiation fails, an arbitrator shall be appointed by chairman of the National Centre for International Arbitration,” said Buti, according to the documents. Mr Buti said as construction commenced, Portside received a letter from KPA stating: “You are hereby informed to suspend the ongoing development for next 30 days from the date of this letter as the lease at hand that culminated to this development is being reviewed.”
KPA’s lawyer Paul Munyao in reply, admits that Portside leased two portions of the property but insists the company despite having signed the lease agreement had not started construction work on one of the sheds in dispute.
KPA General Manager Corporate Evelyne Mwamure says in an affidavit that the lease was suspended because Portside failed to start construction of the warehouse in January.
She says despite the company having started developing another portion of the plot BP 5 which is also part of the lease KPA board of directors wants the leases in question reviewed.
Munyao insists his client has the right to review the lease over its property and that is why they want work to remain suspended until the KPA board of directors comes up with the legal position of the lease. But Portside’s lawyer, Butti, says KPA had gone against the agreement by suspending construction of his client in the port, and yet in the lease, there is a clause that does not allow either party to go against the agreement.
Buti said Portside wrote to KPA asking it to invite an arbitrator but it ignored the letter. This forced Portside to approach an arbitrator Simon Saili Malonza to intervene. [Willis Oketch]
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He said after their letters were ignored by KPA, he decided to approach the court for protection. “An Arbitration is taken to be commenced when one party to the arbitration serves to the other party a notice requiring him to appoint an arbitrator or to concur in the appointment of an arbitrator,” said Buti.
Buti complained that on April 3 2023 KPA again wrote a letter to his client the previous suspension which had been communicated to them on March 3 this year extended the suspension to 30 days, which made his client move to court for protection.