Troubled Nakumatt Supermarkets has been directed to deposit Sh40 million as security in a case where it has sued its former landlord in Diani, Kwale County.
Justice Anne Omollo directed the retailer to deposit the money in a joint account to be opened in the names of its advocates and those of South Coast Holdings Ltd, the landlord, within the next 60 days.
“The proceedings herein shall be stayed (suspended) until the deposit has been paid into the account,” said Justice Omollo.
South Coast Holdings Ltd sought to have the supermarket deposit Sh150 million as security for costs in a case where it has been sued by the retailer who wants it (landlord) restrained from utilising and dealing with its equipment at the premises it used to operate its outlet in Diani. In her ruling, Justice Omollo said that since the financial status of the retailer to meet the former landlord’s costs is in doubt, it serves the interest of justice that Nakumatt be ordered to provide security for expenses.
“The defendant has provided an audit report to demonstrate that indeed the plaintiff will not be able to pay its costs,” said Justice Omollo.
She also noted that Nakumatt has not made any submissions on its financial ability to meet South Coast Holdings Ltd’s costs in the event the suit fails.
South Coast Holdings Ltd also wanted Nakumatt Holdings Ltd administrator Mr Peter Kahi restrained from paying any legal fees to its own lawyers until he deposits the security.
Through lawyer Kinyua Kamundi, South Coast Holdings Ltd argued that it already has judgment against Nakumatt Holdings Ltd for arrears of rent and service charge which the retailer has been unable to satisfy.
Mr Kamundi argued that it would be unfair for the ELC court to order that South Coast Holdings Ltd deposit Sh20 million with regard to an application by Nakumatt which he argued is deemed to have been withdrawn.