A company associated with businessman Kamlesh Pattni has lost a Sh.9.4 billion claim against the Kenya Airports Authority (KAA) over eviction from the Jomo Kenyatta International Airport (JKIA).
Commercial Division Judge Francis Tuiyot Monday set aside the award that was granted in an arbitration presided over by Justice (Rtd) Edward Torgbor and delivered on December 5, 2012.
In that award, KAA was directed to pay Mr Pattni’s World Duty Free (WDF) company USD 49,096,557 together with a 12 percent interest.
His claim against KAA was USD 94,096,078 (KSh9.4 billion).
But KAA, through lawyer Eric Mutua, appealed against the award by the former judge of the High Court who had declined a request to recuse himself during the arbitration.
In the appeal, Mr Mutua told the judge the award was unconstitutional and against public policy.
Mr Pattni had stated in the dispute that he had been denied use of facilities both at the JKIA and the Moi International Airport in Mombasa.
The businessman told the arbitrator that his company had been evicted from its premises.
He therefore claimed damages for goods destroyed and loss of business.
SET ASIDE AWARD
Mr Mutua had asked the judge to set aside the award entered against KAA permitting Mr Pattni to exclusively operate duty free shops in the country’s’ airports.
“I concur with Mr Mutua for KAA that it is contrary to public policy given that Justice Torgbor ignored, disregarded and or misinterpreted the legal effect of the 2006 decision by the International Centre for Settlement of Investment Disputes (ICSID) between World Duty Free Company Limited and the government of Kenya,” ruled Justice Tuiyot, adding that this was hostile to the national interests of the country.
The judge said an agreement entered between the government of Kenya and WDF was based on an illegal contract of April 27, 1989.
Neither WDF nor Mr Pattni have any right to operate duty free shops or to advertise at the JKIA and Moi International Airport.
The judge said the decision of ICSID was binding.
He added that KAA is now not liable to settle or to pay WDF the Sh9.4 billion pronounced by the former judge.
World Duty Free Company, trading as Kenya Duty Free Complex, sought to stop KAA from awarding the contract to Swiss concessionaire Dufry International or any other company.
Kenya Duty Free Complex had been battling with KAA, stating it was the only company with exclusive rights to manage duty-free shops at the Nairobi and Mombasa airports based on an April 27, 1989 agreement.