Reprieve for Joho family in warehouse lease fight with KPA

Former Mombasa governor Hassan Joho. The former county chief has sued Kenya Ports Authority (KPA) accusing it of a plan to breach a contract they entered into for the construction of a warehouse on the authority's property. [Edward Kiplimo, Standard]

The High Court has barred Kenya Ports Authority (KPA) from interfering with the operations of a firm associated with former Mombasa governor Hassan Joho.

Justice Florence Wangari directed that KPA should not interfere with the construction of warehouses by the Portside Freight Terminals Limited on shed six until the application filed by the firm is heard and determined.

 “A temporary injunction is hereby granted ex-parte for 14 days, restraining the defendant, its workers, servants, or agents from suspending, stopping, or interfering with the construction works of warehouses undertaken by the plaintiff or in any other matter hindering the plaintiff, its contractors, workmen, agents, and servants from carrying out works of warehouses and other development,” ruled Justice Wangari.

Shed five

At the heart of the battle between Portside and KPA is a 20-year lease granted to the firm on June 30, 2022.

KPA leased shed five, which is 100,000 square feet, and shed six which is 70,000 square feet, in a deal that was to start from July 1, 2022.

“After these events, the plaintiffs commenced construction works of building a warehouse and other development on this property being BP shed five, with the knowledge, consent, and full approval of the defendant. Further, the defendant (KPA) allowed the plaintiff’s contractor and workmen unlimited access to the port and construction site for purposes of construction of the warehouses,” said Portside’s lawyer Paul Buti.

According to Portside, the agreement further says in case any party is aggrieved, the arising dispute would be resolved through arbitration.  It now accuses the authority of turning around without notice or availing itself of negotiations or arbitration.

Portside Freight Terminals Limited is asking the court to bar KPA from disrupting its operations until the arbitration process is finalised. [iStockphoto]

According to court records, Portside had suggested Simon Saili Malonza as the arbitrator and asked KPA to suggest its own arbitrator if it was not comfortable with Siali.

“On March 3, 2023, the defendant wrote to the plaintiff informing it to suspend the ongoing developments for the next 30 days as the lease at hand that culminated to this development is being reviewed. These proceedings are therefore purely for the grant of such interim measures as ordained by the law cited herein,” stated Buti.

The judge heard that even after Portside wrote to KPA, the government parastatal has remained silent to date.

According to Buti, the arbitration process has begun and it is for KPA to avail itself before the arbitrator.

Court documents indicate that the warehouses are to handle tea cargo. KPA consented that Portside is free to sublease the warehouses to private tea cargo handlers. However, this would be after consulting each other.

Written notice

They also agreed that KPA would only terminate the lease by giving Portside three months’ written notice. At the same time, Portside committed that it would not use the property for three months in the event there is war, civil commotion, unrest, or force majeure (an act of God).

The agreement was signed by the former KPA MD, the corporation secretary on one hand, while on the other Joho’s brother Abubakar Joho and Salim Sadrl represented Portside.

The firm is asking the court to bar KPA from disrupting its operations until the arbitration process is finalised.