DISPUTE

KPA has appealed Sh715m award to Memphis – management

Dismisses claims it has failed to protect taxpayers

In Summary

•The authority and Memphis Limited entered into a lease agreement dated April 17, 2009.

•It provided land for the construction of a Container Freight Station.

The KPA headquarters
The KPA headquarters
Image: FILE

Kenya Ports Authority has appealed the Sh715 million arbitration award to Memphis Limited over a disputed land lease, dismissing claims it has failed to protect taxpayer’s interests.

The authority and Memphis Limited entered into a lease agreement dated April 17, 2009, which provided the construction of a Container Freight Station for loading and clearing cargo.

It was required to develop the land within two years of the lease failure to which the land was to revert to the lessor.

The firm was also to fund the cost of constructing street lighting, sliding roads, drain waters and sewers and to maintain the same.

Aggrieved by the award, the authority lodged an appeal September 1, 2020 in Mombasa Environmental and Land Court Civil Appeal No. 23 of 2020 between Kenya Ports Authority and Memphis Limited 
KPA management 

Under the agreement, it was agreed that all disputes arising from the agreement would be referred to arbitration and upon a dispute arising between the two parties, over delays on the project, it was referred to arbitration for resolution where Memphis was rewarded the Sh715 million.

It has been alleged that authority has failed to appeal against the arbitrator’s decision, and that KPA has been working in cahoots to defraud the public, thus the authority’s inertia to appeal against the award which includes interest and costs.

The attention of the Kenya Ports Authority has been drawn to incorrect mainstream and social media reports alleging failure by KPA to protect taxpayer’s interests in a dispute over a lease with a local company,” it said in a statement yesterday.

Through its corporate affairs department, KPA affirmed that it has filed an appeal on the award delivered in the arbitration on June 11, 2020.

“Aggrieved by the award, the authority lodged an appeal September 1, 2020 in Mombasa Environmental and Land Court Civil Appeal No. 23 of 2020 between Kenya Ports Authority and Memphis Limited (‘the Appeal’),” the statement by KPA reads in part.

Through the appeal, the authority has challenged the propriety of the substantive legal findings in the award and more specifically, the legal basis upon which the award of Sh 715 million was made and that therefore, the said amount is not payable.

“It is therefore untrue and malicious for it to be alleged that the authority did not appeal against the award or that therefore the authority is not intent on protecting the public interests,” management said yesterday.

Activist Caleb Ngwena and Millicent Adhiambo recently filed a case at the Mombasa High Court against the authority and Memphis Limited ( Petition NO. 10 of 2021) seeking to compel the authority to appeal against the award.

“Given that the proceedings in the appeal and the petition are currently pending determination in court, the authority is precluded from discussing the merits of the pending court proceedings to not prejudice the interests of justice or bring the administration of justice into disrepute,” it said yesterday.

The port management has affirmed its commitment to "act in the best interests of the public", adding it will abide by the outcome of the final court’s decision.