Shipping & Logistics

Court extends suspension of order to stop SGR cargo rule

sgr

A Kenya Railways cargo train. FILE PHOTO | NMG

The Kenya Ports Authority (KPA) got a reprieve on Tuesday after the High Court extended orders that suspended a decision that would allow importers to choose their preferred mode of transport for their cargo whether by the standard gauge railway (SGR) or trucks.

Justice Eric Ogola extended the interim orders until September 30 when a five-judge bench is expected to deliver its ruling on an application by KPA seeking a further stay for 90 days.

“The judges have not had time to sit and write a ruling,” said Justice Ogola on Tuesday, the day the bench was to give its judgment.

The ruling to quash the government’s directive requiring all cargo imported through the port of Mombasa be hauled to Nairobi and the hinterland exclusively by SGR was to take effect on May 7. But, KPA rushed to court and had it suspended until May 10 when its application at the Court of Appeal was to be heard.

However, the appellant court informed the parties that the hearing date had been set aside and no alternative date had been given prompting KPA to move back to the High Court to have the orders to quash the directive suspended.

On May 26, the High Court issued the orders pending the determination of KPA’s application on June 22.

On Tuesday, lawyer Billy Kongere for KPA who requested for the extension of the orders, told the court that on June 2 when they were to appear before the Court of Appeal, they were informed that three of the judges were dealing with the Building Bridges Initiative case.

Kenya Transporters Association (KTA) opposed the extension of the interim orders saying the court had no jurisdiction as it was functus officio (its mandate in the case had lapsed).

KPA was apprehensive that if the orders to quash the directives were not suspended, they would have disrupted its operations resulting in substantial loss.

“The directives support the National Government’s wider transport policy, their nullification will disrupt the implementation of the transport policy starting from the port of Mombasa all the way to the Inland Container Depot in Nairobi and Naivasha,” the application states.

In its argument, KPA argues that the directives are meant to operationalise the take and pay agreement which is a toll through which the loan for the construction of the SGR is repaid.

“It will be difficult and improbable to meet the contractual obligations under the take and pay agreement thus leading to default in the repayment obligations,” the authority argues.

KPA said within the 90 days it seeks, the Court of Appeal would have made its decision on its application for suspension of the execution of the orders quashing the directives.

In November last year, the High Court quashed the government’s directive and suspended them for 180 days.

During the suspension, the government was to regularise the situation (including conducting public participation on the directives).

The High Court comprising of Justices Lydia Achode, Eric Ogola, Anthony Mrima, Joel Ngugi and Pauline Nyamweya (now Court of Appeal) ruled that the directives were in violation of the Constitution as they were not subjected to public participation.

The judgment was as a result of two separate petitions which were consolidated, filed by Mr William Ramogi, Ms Asha Omar and Mr Gerald Kiti and KTA.

The five-judge bench further ruled that the directives by the government on the requirement to have cargo transported via SGR affected the rights of KTA and other stakeholders hence KPA and Kenya Railways were obligated to subject them to public participation.