Court orders Kenya's aviation authority to pay an airline Sh1.4 billion for cancelling licence

NAIROBI, KENYA: Aviation industry regulator Kenya Civil Aviation Authority (KCAA) will have to pay an airline operator more than Sh1.4 billion for cancelling its operations certificate back in 2003.

This is after the High Court dismissed the argument by KCAA that the monies demanded by African Commuter Services Ltd would cripple its day-to-day operations being a State owned entity. In a ruling delivered by High Court Judge Alfred Mabeya, the authority will have to pay Sh1,421,671,718 being an award for damages and loss of business.

“I agree with the authority that when this court is enforcing the law it should do so while having in mind public interest that operations of public corporations are not unnecessarily interfered with and that monies payable by such corporations belong to the taxpayer and to ensure that public interest is always protected and safeguarded,” Justice Mabeya said.

“However, at the same time, this court must have in mind that Kenyans have given themselves a Constitution to govern them and that they have also given themselves a Parliament that has passed laws which must be administered and applied without favour or discrimination.”

The 11-year old dispute that led to the award emanated from the decision by KCCA to cancel African Commuter Services Ltd’s air operation certificate. With this, the company had to close shop and seven airplanes it operated were grounded. The firm went to court on November 12, 2003 seeking to have the authority compelled pay Sh1.3 billion for the losses that it had incurred due to the action.

The High Court ruled in favour of African Commuters and awarded it more than Sh1.3 billion. However, the authority moved to the Appeal Court which reduced the amount to be paid. The Appellate court had waived the monies to slightly below Sh400 million. “There can be no special category of citizens or corporations in this country who would operate outside the law. No litigant should be allowed the luxury of complying with the law or court order at his or its own terms, time and pleasure,” Justice Mabeya said in his ruling.

The authority did not honour the orders of the two courts, prompting African Commuters through their lawyer Ahmednassir Abdullahi to move again in the High Court in a bid to enforce the award. The company in its suit argued that the regulator had enough money in its accounts to satisfy the ruling entered against it.

However, KCAA in their defence said the money demanded belonged to the taxpayers and that if it paid, it would have to stop its operations which would have an adverse effect to even its international operations. The court also heard that another reason KCCA had not paid was because it intended to challenge the decision in the Supreme Court. KCAA further defended itself by saying that the monies in its two bank accounts are operating capital only and thus it could not raise the sought award.

PUBLIC INTEREST

“If the monies sought to be attached are so attached, it will disrupt KCAA’s operations which might lead to blacklisting by the International Civil Aviation Authorities. There is a duty on the part of this court to ensure the operations of an important public body such as this are not disrupted or its performance interfered with,” it argued.

Justice Mabeya in his ruling noted that despite the fact that the upper court had lowered the amount to be paid, the authority had not taken the initiative to pay. He said that KCAA should have disclosed the money in its accounts for the court to gauge the truth of the arguments that the monies held are operating capital.

“To my mind, it will be the saddest moment in the history of this country, and more so for the principle of the rule of law and constitutionalism, when a court of law will permit a litigant to comply with court orders at the litigant’s own pace, time and pleasure. Eleven (11) long years are enough waiting for the Applicant (African Commuters) to be compensated for a wrong done to it,” he ruled.

He said the law did not allow properties belonging to State entities to be attached but the corporation ought to have complied with the orders. “I hold that the greater public interest requires the Applicant be allowed to enforce its rights and thereby maintain and sustain the Constitutional value and principle of governance of the rule of law than to uphold narrow interests of allowing a public corporation to suspend the rule of law,” he ruled.