Nakumatt shifts Sh330m fire claim to Kenya Power


Fire fighters battle the inferno that gutted Nakumatt Downtown in Nairobi in 2009. The retail chain has blamed Kenya Power for the fire. Photo/FILE

Nakumatt wants Kenya Power to deal with a Sh330 million claim lodged by owners of the collapsed building that housed the retail chain and was razed by a fire in 2009.

Woolworths (no relation with South Africa’s clothing and homeware retailer) has sued Nakumatt Holdings, its managing director Atul Shah and power utility Kenya Power, seeking compensation for alleged negligence and breach of statutory duty.

Nakumatt is shifting the blame to the power distributor and has accused the utility firm of linking the Nakumatt Downtown store with a faulty electricity cable that triggered the fire.

It also said Kenya Power technicians negligently repaired a transformer near the building that caused a power outage, prompting Nakumatt’s generator to explode.

READ: Generator may have caused Nakumatt fire four years ago

“The first defendant (Nakumatt) denies that it is responsible for the loss or damage to the plaintiff (Woolworths)... and further avers... if any loss or damage to the plaintiff, the 2nd defendant (Kenya Power) is fully liable for the loss,” notes Nakumatt in court documents.

Kenya Power is yet to respond to the claims, but earlier absolved itself from blame, saying an electric fault could not have caused the fire.

The electricity distributor argued that an electric fault would have affected buildings next to Woolworths House, noting that adjacent properties were unaffected.

At least 31 shoppers and workers died in the inferno that reduced the supermarket store at the junction of Nairobi’s Kenyatta Avenue and Kimathi Street to ashes on January 28, 2009.

Mr Shah was charged with three counts of failing to keep highly flammable substances in a fire-resistant store and to provide adequate means of escape to occupants.

Woolworths says in court papers that it had leased the premises to Nakumatt for 20 years from June 1, 1995 to May 31, 2015 at the rent of $40,600 (Sh3.5 million) per month.

The property owner urged the court to order the supermarket to pay for loss of rent amounting to $3 million (Sh259 million) from February 2009 until expiry of the lease on May 31, 2015, Sh58.5 million as value of the building, Sh2.9 million land rent and other costs it claimed to have incurred.

The court battle began after Woolworths failed to get Concord Insurance to reimburse it for expenses incurred through loss of lease and land rent, the building’s value, and cost of demolition of the building among other costs.

Concord Insurance at first declined to settle the claim by Woolworths but later agreed to after being threatened with a suit, according to a plaint filed by the building owner’s lawyer.

However, Concord still failed to settle the claim; an eventuality that Nakumatt blames on Woolworths.

“The plaintiff (Woolworths) should pursue its claim from the insurance office or underwriter with whom it insured this building if it did and not the 1st defendant (Nakumatt),” the supermarket chain adds in its defence.

However, this is complicated since, not only did the window period for Woolworths to file its claim lapse, but Concord Insurance was on February 6 placed under receivership.

The firm’s statutory manager has since placed a moratorium on any payments to policy holders a year from the receivership date, a freeze that could be extended even further.

The destruction of Nakumatt Downtown saw the retailer lose one of its key outlets given its strategic location within the central business district (CBD).

This prompted Nakumatt to acquire Woolmatt in 2010 for an undisclosed amount as it sought a larger share of the CBD market where rivals Tuskys, Uchumi and Ukwala had a presence.

READ: Nakumatt intensifies CBD market war

In 2008, Nakumatt’s prime store near Ruaraka was brought down to pave way for construction of the Thika Superhighway.

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