Pattni takes battle for Sh8.5bn to Appeal Court

What you need to know:

Dispute stems from an arbitration award that a local court set aside in ruling on duty-free shops at the Jomo Kenyatta International Airport.

Businessman Kamlesh Pattni has taken his fight for a Sh8.5 billion tribunal award against the Kenya Airports Authority (KAA) to the Court of Appeal in an indication that taxpayers are not yet off the hook in the long-running case.

Mr Pattni’s World Duty Free Company Limited (WDF) has filed a notice of appeal against the High Court judgement, which has been served on E.K Mutua and Company, the law firm representing KAA.

The arbitrator, retired Ghanaian judge Edward Torgbor, had in December 2012 ordered KAA to pay the Kenya Duty Free (KDF) Complex the amount in settlement of the protracted battle with the airports authority.

But Justice Francis Tuiyot found that the award was based on an agreement that was procured through bribery and corruption between KAA and Mr Pattni’s World Duty Free Company Limited (WDF).

“Take notice that the world duty Free company Limited T/A Kenya Duty Free Complex, the respondent/applicant herein being aggrieved by and dissatisfied with the ruling of the Justice Francis Tuiyot delivered at Nairobi on the October 5, 2017, setting aside the arbitral award intends to appeal to the court of appeal against whole of the said decision,” reads the notice filed by WDF.

At the centre of the dispute is an advertising concession and permission to operate duty-free shops that the KAA is alleged to have granted third parties without consultation.

Mr Pattni accused the KAA of breaching his company’s sole and exclusive rights to construct, maintain, furnish and operate duty-free shops by granting concessions to third parties at JKIA and Moi International airports.

The International Centre for Settlement of Investment Disputes (ICSID) ruled that the agreement dated April 27, 1989 between KAA and WDF was obtained through corruption and bribery and should not be respected. Justice Tuiyot in his ruling noted that the arbitrator ignored the ICSID ruling while awarding Mr Pattni the colossal amount.

Justice Torgbor on December 5, 2012 ruled in favour of Mr Pattni and gave KAA two months to pay Mr Pattni Sh4.2 billion in full. The amount had accumulated interest of Sh8.5 billion by the time the latest judgment was made.

The Sh8.5 billion claim included Sh2.4 billion in lost and unearned revenue, Sh860 million general damages, Sh430 million aggravated damages, Sh275 million special damages, Sh247 million as revenue collected by KAA between 2005 and 2011 from advertising concessions granted to third parties and Sh5 million lost income from rent in 2011.