Dubai firm loses court case, paving way for duty free shops at JKIA

By Leonard Mutinda; October 19th 2014

The High Court this week dismissed a case by a Dubai firm paving the way for development of duty free shops at Jomo Kenyatta International Airport. Zusan Trading went to the court mid-last month to challenge a decision by airports watchdog, Kenya Airports Authority (KAA) to float afresh a contract for the shops. This was after the Public Procurement and Oversight Authority (PPOA) blocked the award of contract to Nuance Group AG, a Swiss firm, saying the tender was mired by irregularities.

Zusan had told the court that KAA had not made the tender more inclusive to all bidders as directed by the procurement watchdog. It said the documents presented by KAA had the same technical specifications. The investor also wanted the re-tender blocked on grounds that the airports authority had not thoroughly scrutinised the tender documents of some participants. “Credentials of all bidders, specifically relating to the minimum three years’ operating as a duty free shops retailer and a master concessionaire in at least three airports each were not verified,” said Zusan’s general manager Arif Hafiz. Zusan Trading runs the duty free shops at Moi International Airport Mombasa as well as the Mombasa Seaport. Justice Weldon Korir however, ruled that Zusan could not challenge the re-tender since it was not part of the group that showed interest in developing and managing the facilities when KAA called for expression of interest. “The ex-parte applicant never submitted any tender documents and therefore is not a candidate,” said the judge. He added that in rushing to the court, the firm had failed to follow the laid down process arguing it should have first raised the matter with the PPOA review board. Further delay See also: Dubai firm loses court case, paving way for duty free shops at JKIA Justice Korir also declined to issue orders against KAA noting that Zusan had taken too long to challenge the tender and only did so when the process had been concluded. “The applicant did not offer any reason why he did not challenge the tender immediately. I find that the applicant came to court too late in the day,” said Justice Korir. After the judgment was read out, the firm applied for 14 days stay orders to file an appeal. It was however opposed by both KAA and Hoggers Ltd which won a contract to operate a fast food restaurant at the airport after re-advertisement. It had been enjoined in the case as an interested party and argued that it was against public interest since a lot of time had passed since the court ordered against further implementation of the project until the case was determined. “JKIA is currently operating without a duty free facility. The first award was nullified by the board in December 2013. Any further delay will cause immense loss and damage to KAA,” said the company through its lawyer. Hoggers said it was ready to serve the duty free shops any time pointing out that their competitiveness would be hindered by any further delay. It pointed out JKIA was the only airport of its kind in the region without the duty free shops. Kamlesh Pattni “The applicant did not submit a tender and therefore had nothing to lose or protect,” said Mr Gachuba, the interested party’s lawyer. The management of the lucrative tax-free shops became vacant when former owner businessman Kamlesh Pattni withdrew cases challenging their seizure by the government last year. The shops are expected to pump in Sh172 million into the economy annually.