Kenya Airways and multi-national DHL have been sucked into the fight for control of space at Jomo Kenyatta International Airport involving businessman Kamlesh Pattni and the airports authority.
Diplomatic Duty Free Limited has won temporary reprieve after the High Court stopped the Kenya Airports Authority (KAA) from taking over space from the firm associated with Mr Pattni.
The KAA was seeking to renew its leasing contract with the duty free firm for one year to July next year and on a smaller space, but Diplomatic Duty Free Limited reckoned that the move was in breach of an earlier pact that called for a six year extension.
Diplomatic Duty Free Limited said in court documents that KAA wants to offer part of space to Kenya Airways, a location that the firm has already sub-let to courier giant DHL.
“The applicant (Diplomatic Duty Free) was required to surrender its passenger duty free lounge at terminal 1 on grounds that other airlines are complaining,” says Abhimanyu Garwal, Director of Diplomatic Duty Free in an affidavit.
“It transpired at the meeting this was a ploy on the part of the respondent which in truth wished to lease the lounge to Kenya Airways Limited.”
The company alleges that KAA in February notified it of its intention to repossess additional space from the Diplomatic Duty Free to give way for renovation and construction work at JKIA.
This was to happen before the renewal of two leases whose expiry dates were February 28 and July 31.
The firm says the space meant to be ceded to Kenya Airways hosts a lounge, a bonded warehouse that has been sub-let to DHL and two duty free shops.
It accuses KAA of forcing it to accept a one year lease extension on the remaining shop space instead of six year automatic renewal as provided in a 2007 contract.
Justice Jonathan Havelock has stopped KAA from repossessing the shops pending the hearing and determination of the suit. The matter will be heard on August 9.
“A temporary conservatory prohibitory injunction do issue against the respondent restraining the respondent whether by itself, its servants agents or otherwise from repossessing or attempting to repossess the premises occupied by the applicant under the leases dated March 5, 2007 and September 14, 2007,” said Justice Havelock.
The company claims KAA has failed to renew the leases despite its numerous applications against the provision of the lease agreement.
This is the latest in a number of court disputes involving KAA and firms associated with Mr Pattni including the World Duty Free—which was awarded Sh4.2 billion for breach of an airport deal that the authority is fighting.
World Duty Free allege KAA terminated a contract that gave it exclusive rights to run shops at JKIA.