Kenya Ports Authority in Mombasa has effectively been shut down by the High Court.
All its bank accounts were frozen last Thursday by the High Court in Mombasa and it cannot make any payments, including December salaries.
The court froze the KPA bank accounts at Citi Bank, Equity Bank and National Bank. Justice Patrick Otieno was enforcing a judgment for Sh1.9 billion that he gave in September in favour of Modern Holdings (EA).
Modern Holdings is a large Tanzanian company that distributes Masafi energy drinks and fruit juice. It brought in 21 containers to Mombasa from Dubai between December 2007 and January 2008.
During the post-election violence, consignments could not be cleared from the port within the stipulated time so KPA, in consultation with KRA, moved long stay containers to Makupa private port to ease congestion and allow more cargo to be received at the port. Notices to that effect were published in local dailies and at the port. However Modern Holdings argued in court that the transfer of its containers to Makupa was illegal.
Modern Holdings cleared six containers with waivers from KRA and KPA but 15 containers were delayed and their contents valued at Sh60 million went bad.
Justice Otieno found in favour of Modern Holdings and awarded them Sh890 million, 14 times the value of the consignment. The additional Sh1 billion constituted interest and loss of business.
Once the judgment was delivered in September 2016, the proceedings continued at a high speed to realise the judgment sum. Modern Holdings filed their bill of costs on November 3 and were allocated a date for hearing on November 28. The bill of costs was adjourned for taxation on December 6,
After a short delay, on December 13
Modern Holding’s bill of costs was taxed at a staggering Sh72 million. A Mombasa lawyer described the amount as “way above what the scales prescribing the remuneration of advocates stipulates”.
The case continued at top speed. Modern Holdings then filed an application to attach all the bank accounts belonging to KPA. On December 15, last Thursday, Justice Otieno, who delivered the judgment in September, issued a ‘garnishee order nisi’ that effectively stopped KPA making any payments pending the hearing of the application. The application was fixed for yesterday, December 19, four days after the order was issued. The order requires that the banks show cause why they should not pay Modern Holdings Sh1.9 billion within seven days.
In contrast to the speedy hearing of Modern Holdings case, KPA’s attempt to appeal has dragged through the courts. KPA filed an application for stay of execution pending the hearing of its appeal in November 2016 before the Court of Appeal. That application, certified as urgent, was allocated a hearing date of today December 20.
“It appears that there was some urgency at the High Court to beat the date allocated for the hearing of the KPA application before the Court of Appeal,” said the Mombasa lawyer who expressed concern over the plight of KPA employees and other strategic operations.