Pattni-link company loses grip of large section of duty free shops

A company associated with businessman Kamlesh Pattni has lost grip of a large section of duty free shops at the Jomo Kenyatta International Airport.

The High Court on Monday revised a ruling which, in October, had stopped KAA from repossessing the entire area of duty free shops initially leased out to the World Duty Free Company in 2003.

Mr Pattni is one of the directors of the company, which claims to have the exclusive right to operate duty free shops at the JKIA and all other airports.

Mr Justice Alfred Mabeya ruled that the October injunction can apply only to the area currently being occupied by the duty free company and not the entire larger area under the 2003 lease agreement.

Injunction

In October, the World Duty Free Company obtained an injunction stopping the Kenya Airports Authority (KAA) from repossessing duty free shops at the airport.

The injunction covered 2,047 squared metres, where the duty free company was operating shops as per a lease agreement between it and the government signed in 2003.

However, the KAA returned to court to have the ruling clarified, arguing that the court was ambiguous by placing the injunction on the entire area but finding that the duty free company had surrendered parts of the leased area and its demands for renewal of the leases could apply only to a smaller portion, which it remained occupying.

The company has been engaged in court battles to prevent KAA from granting the leases to any other company, and in October obtained the injunction.

However, the court in Nairobi revised its ruling, effectively making it possible for KAA to repossess the majority of the shops and lease them to third parties.

The entire area under the 2003 lease was 2,047.23 squared metres, but after surrendering parts of it, the World Duty Free Company is currently occupying 61.3 squared metres.

The KAA had informed the court that the parts were surrendered by mutual consent of the parties, and that it had started leasing them out to other companies, including the Diplomatic Duty Free Company.

However, the World Duty Free Company contended that it surrendered the portions under pressure, threats and deceit from KAA.

The dispute between the duty free company and the KAA started in 2008 after the latter indicated its intention not to renew the lease to the former, and advertised for other operators to apply.