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Troubled Nakumatt sued by its lawyer over Sh126 million legal fee

By Joackim Bwana | October 27th 2021

A teller serves a customer inside the Nakumatt supermarket within the Village market complex mall, in Nairobi, Kenya, on November 7, 2017.  [File, Standard]

Troubled Nakumatt Holdings Limited and its director Atul Shah have been sued for the non-payment of Sh126 million legal fees.

The firm's lawyer, Daniel Ngonze, has filed several suits against Nakumatt, which was declared insolvent in 2017, to recover his legal fees.

According to court documents, the lawyer claims he represented the firm and its director in seven cases, some up to the Supreme Court.

Ngonze is seeking Sh60 million for two cases he litigated before the Supreme Court and Sh40 million for two other matters in the Court of Appeal.

He is also demanding Sh20 million for two cases he appeared for the firm in the Environment and Lands Court (ELC) and Sh6 million for a matter in the High Court.

The cases, according to the documents, stem from Nakumatt’s battle against its former landlords in Mombasa and Diani in Kwale.

Ideal Location and Nova Holding Limited in Mombasa and South Coast Holdings Limited in Kwale had sued Nakummatt over Sh200m rent arrears.

Ngonze filed a case on behalf of Nakumatt at the Court of Appeal and subsequently the Supreme Court seeking orders to stop the eviction of his client.

Justice Charles Yano had in 2018 issued an order for Nakumatt to be evicted from Nyali Cinemax Mall in Mombasa.

Ngonze said he also submitted before appellate judges, Justices Daniel Musinga, Agnes Murgor and Gatembo Kairu, that ELC judge Charles Yano lacked jurisdiction to order Nakumatt eviction from Nyali Mall in 2018.

Justice Yano had found Nakumatt in breach of the sub-lease agreement dated June 14, 2009, with Ideal Location Limited owners of City Mall in Nyali and had accrued arrears amounting toSh27,812,108 as of November 1, 2017.

Ngonze argued the eviction orders were issued in total disregard of orders of the court in Nairobi that barred landlords from evicting the supermarket pending determination of the case.

Ngonze, in his litigation, said the court in Nairobi had also declined to grant the application by the landlords to re-enter into the premises before the Nakumatt administrator Peter Opondo Kahi had sorted out the issue with the company's creditors.

Nakumatt ran into financial trouble in 2017 and was declared insolvent by the High Court in Nairobi.

The supermarket chain later went under in 2020 with a debt of Sh40 billion with creditors voting last year to have it liquidated.

Kahi was only able to raise Sh5.2 billion and applied for an extension to help in the recovery of between Sh3 billion to Sh4 billion that is tied to ongoing court cases for and against the retailer.

Justice Alfred Mabeya ruled in favour of the administrator, arguing that there were debts and court cases that required to be “managed for the benefit of the retail chain”.

Ngonze now wants Nakumatt to pay for the time and effort he spent in defending it.

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