Retailer says Ideal Locations Ltd, the landlord at City Mall building, filed the case in a "wrong court".
The landlord argues Nakumatt has breached the terms of lease agreement by defaulting in the payment of rent, service charge and promotion fund when the same have fallen due.
He says Nakumatt's continued occupation of the premises has no useful purpose since it no longer does any meaningful business and the shelves are virtually empty.
Cash-strapped Nakumatt Holdings wants a case by its landlord in Mombasa seeking an eviction order over Sh27.8 million unpaid rent as at November struck out.
The supermarket chain says Ideal Locations Ltd, the landlord at City Mall building, filed the case in a "wrong court".
Lawyer Lawrence Ng’ang’a for Nakumatt said the Environment and Land Court (ELC) has no jurisdiction to preside over a matter relating to commercial and contractual issues.
Mr Ng’ang’a on Monday told Justice Charles Yano that the ELC is not the court contemplated by the Insolvency Act.
“The court lacks constitutional jurisdiction to hear a matter that is the subject of insolvency proceedings,” said Mr Ng’ang’a.
Through lawyer Willis Oluga, Ideal Locations Ltd, which seeks an order to have Nakumatt immediately vacate the premises or in default to be at liberty to evict it, said the issues fall within the jurisdiction of the ELC.
Mr Oluga said Nakumatt has breached the terms of lease agreement by defaulting in the payment of rent, service charge and promotion fund when the same have fallen due.
“The defendant is an anchor tenant in the premises and its performance has a direct and indirect impact on other businesses within the shopping mall,” said Mr Oluga.
Mr Oluga argued that business owners within the mall who are all tenants have complained about the negative impact Nakumatt's poor performance has had on them, with some threatening to either vacate the premises or stop paying rent.
“The rent collected from the property is assigned to service a credit facility of Sh545 million advanced to the plaintiff by Prime Bank Ltd with the premises as security,” said argued Mr Oluga.
The plaintiff further argues that it developed the mall for investment and not charity purposes and since Nakumatt is no longer in a position to pay rent, it should vacate the premises immediately.
Mr Oluga further told the court that Nakumatt's continued occupation of the premises has no useful purpose since it no longer does any meaningful business and the shelves are virtually empty.
The plaintiff argued that the possibility of Nakumatt paying rent is very remote especially after its much touted merger with Tuskys supermarkets was rejected.
Ideal Location Ltd argued that if Nakumatt continues to occupy the premises, the mall is likely to turn into a deserted and ghost structure with no traffic.
This, it said, will affect the overall value of the prime commercial enterprise.
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