Kamlesh Pattni surrenders duty-free shops at airport, stops cases

Goods dumped outside Jomo Kenyatta International Airport after eviction of Pattni’s duty-free shops. [PHOTO: FILE/standard]

By MACHARIA KAMAU

Kenya Airports Authority (KAA) and controversial businessman Kamlesh Pattni yesterday called a truce on their long running battle over the control of duty-free shops at the Jomo Kenyatta, Wilson and Moi International Airports in Nairobi and Mombasa.

KAA walked out of the tussle like a winner as the businessman unconditionally gave back the duty free shops and other premises to the authority.

Pattni also renounced Sh4.2 billion that was awarded to him by an arbitrator, retired justice Edward Torgbor late last year.

In the awards, KAA was to pay Pattni for breach of contract in relation to termination of contracts for running duty free shops and occupying some of the airports’ premises.

Not lay claim

Pattni further said he would withdraw all cases against KAA currently before the courts.

The move ends a 25-year stay at Kenya’s airports, where firms associated with the businessman have been running the lucrative duty free shops amid protests by KAA.  The award of the tender in the late 1990s has all along been subject of scrutiny and has led to the long running battles with KAA.

Transport and Infrastructure Cabinet Secretary Michael Kamau yesterday said Pattni’s Diplomatic Duty Free Company that has been running the duty free shops and a Dubai based World Duty Free Company – which recently bought a controlling stake in Pattni’s firm – would withdraw all the cases in courts, renounce the Sh4.2 billion award and would not lay claim in future to the duty free shops at the different Kenyan airports.

“World Duty Free Company has today renounced the arbitral award that was made by retired Justice Torgbor in which KAA was ordered to pay Sh4.2 billion. That award has been renounced and lawyers have been instructed to set it aside in its entirety,” said Kamau.

He spoke at a briefing yesterday attended by Pattni, Attorney General Githu Muigai, senior KAA staff and lawyers representing both sides.

Kamau said World Duty Free Company and Diplomatic Duty Free Company have both agreed and undertaken never to claim and demand compensation now or in future regarding repossession of the shops and the passenger lounges, which was carried out by KAA.

“World Duty Free Company and Diplomatic Duty Free Company agreed to withdraw the multitude of cases pending in various courts against KAA and the government,” he disclosed. T

The premises, which the World Duty Free and Diplomatic Duty Free had occupied for the last 25 years were repossessed in the early morning of August 1.

Public interest

Muigai said the winner in the situation was the public, adding that the government was intent on creating an environment conducive for business and at the same time safeguard public interests.

“The government is committed to the rule of law and wants businesses to compete fairly and on a level playing field,” he said.

Pattni is no stranger to controversy and has in the past been accused of fleecing the country.

In the early 1990s, the businessman was involved in the Goldenberg scandal where billions of shillings was lost to a firm associated with Pattni — Goldenberg International — that was supposed to be exporting gold.

And after numerous reports and investigations, the government decided to take possession of the Laico Regency Hotel — then Grand Regency — in 2010. After a legal tussle, Pattni handed over the hotel to the government, which later sold it to the Libya Africa Investments Company (Laico).