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Airline sues Kenya Civil Aviation Authority over Sh1.4 billion award

By Kamau Muthoni | February 20th 2015

NAIROBI: Aviation industry regulator Kenya Civil Aviation Authority (KCAA) is embroiled in a legal tussle with an airline operator over Sh1.4 billion award by the court for cancelling the airline’s operations certificate in 2003.

This is after African Commuter Services Ltd moved to court under a certificate of urgency, accusing KCAA of transferring its money to another account held by the Ministry of Transport and Infrastructure to allegedly not honour court orders. Through its lawyer Ahmednasir Abdullahi, the airline told High Court Judge Alfred Mabeya that it only managed to get Sh46 million from KCAA. “The judgement debtor (KCAA) has since moved its finances from its accounts to another account operated by the Ministry of Infrastructure with a view to defeat the order of the court and to solely subvert and defeat the course of justice,” Lawyer Ahmednasir told the court.

Both KCAA and the ministry have protested that the amount awarded was grossly exaggerated and that the transfer of the money by the aviation regulator was done as an ordinary process. Revocation of the licence saw the company close shop and seven airplanes it operated grounded and was awarded Sh1.4 billion for the losses that it had incurred due to the action.

KCAA Corporation Secretary Judith Ng’ethe and Transport Permanent Secretary Nduva Muli in separate responses argued that the amount by the court had been reviewed to Sh820 million and that the monies transferred to the ministry’s account were meant for repaying of loans owed to the World Bank.

“From the outset, the aforementioned decree is irregularly obtained and the amounts therein grossly exaggerated. The judgement debtor has had the decremental sum reviewed and the said amount is now stated to the total sum of Sh820.7 million as opposed to the amount claimed in the sum of Sh1.421 billion Ng’ethe told the court.

Nduva in his affidavit says the National Bank in contest was a joint one that was used even by the development partners and could not be attached to recover the money. “I am aware that KCAA did make funds transfer on November 14, 2014 in respect to monies accrued for payment and continuously crystallising as the property of the Ministry of Transport and Infrastructure, department of State for Transport as a custodian for the underlying loan guarantee agreements for scheduled payments to the development partners, ‘’Nduva argued in a sworn affidavit.

The PS said that the account was owned by his ministry and not by the regulator adding that the ministry was not bound to the judgement as it was not a party of the case.

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