Saudi Arabian Airlines in cash row with Nairobi agent

Saudi Arabian Airlines (SAA) has sued its Kenyan agent for Sh261 million ($3 million), an amount the carrier claims arose from sales made between February and March 2012. The airline wants the Nairobi High Court to compel Sean Express Services to pay the sum, which it says was in the possession of the agent when it terminated an agreement the two parties had.

Justice Francis Gikonyo last week ruled that a counterclaim for $3.2 million (Sh278 million) by Sean Express filed last November raised merited issues, and will determine the application. The airline had accused Sean Express of lodging the counterclaim in a bid to annoy and embarrass it, and urged the court to throw out the application.

Sean Express had told the court that it had incurred several operational costs on behalf of Saudi Arabia Airlines. The agent had asked the judge to throw out the suit lodged by the airline, and award it the amount it had asked for in its counterclaim.

“I find the defence and the counter-claim raises triable issues and I hereby sustain the defence and the counter-claim. I reserve the merits for the trial. Accordingly, I dismiss the plaintiff’s application,” said Mr Justice Gikonyo in his ruling.

The judge said that the main suit would determine which of the two parties breached the contract, and whether Saudi Arabia Airlines followed the right procedure in terminating its agreement with Sean Express. Mr Justice Gikonyo said he would give mention date to give directions for the case.

He, however, declined to grant Sean Express its request to compel Saudi Arabian Airlines to deposit security of Sh5 million, which it said it would incur in costs of defending the suit. Mr Justice Gikonyo said the sales agent had not shown reason for him to award it the security for costs.

Sean Express had told the judge through its lawyer Joshua Nyawaro that the airline was a foreign company, and that it could easily evade the payments in the event that the judge ruled in favour of the sales agent.

Saudi Arabian Airlines, however, said it had an office in Nairobi, and had accounts in local banks, hence would pay the sum in the event that it lost the case.

“There is not reasonable cause why the court should exercise its discretion in favour of the defendant,” the judge added. “It will, therefore, not call up for any security for costs from the plaintiff. The upshot is that the defendant’s application is dismissed.”

The two applications were filed before the judge had given any directions on the hearing of the main suit.