Blow for Joho firm in court dispute with KPA on tariffs
Former Mombasa Governor Hassan Ali Joho.
A court has declined to issue orders barring the Kenya Ports Authority from charging a firm linked to former Mombasa Governor Hassan Joho user tariffs.
KPA charges $4.40 per tonne for stevedoring and $5.50 per tonne for wharfage, which Portside Freight Terminals Ltd claims is in breach of the licence agreement.
The firm has sued KPA, accusing it of overcharging it on user tariffs contrary to the provisions of a licence agreement.
In its case filed at the High Court in Mombasa, Portside Freight Terminals Ltd says that, by the time of filing the case, KPA had overcharged it for both stevedoring and wharfage a total of $215,372.00 (Sh31.2 million).
The company wanted the order issued pending hearing, determination and delivery of an award in the Arbitration proceedings it (company) has already commenced.
But Justice Anne Ong’injo yesterday directed Portside to file a further affidavit and submissions within the next seven days and also gave KPA a corresponding period to also file its documents.
The case will be mentioned on September 19.
In the suit, the firm says that by a licence agreement dated December 10 2020, it was granted licence by KPA relating to the handling of fertiliser and dry bulk cargo at the port of Mombasa.
It says that in July, it received and handled various vessels pursuant to the terms contained in the license agreement and upon discharge (of the vessels) KPA charged it user tariffs other than those set out.
The company says that KPA is now charging stevedoring charges at $4.40 instead of the contractually agreed $1.65 and wharfage at $5.50 instead of $2.20 as set out in the licence agreement.
“The defendant is now overcharging the plaintiff at the rate of $2.70 per tonne for stevedoring and a further sum of $3.30 per tonne for wharfage. This overcharge is contrary to and in breach of the licence agreement,” the company argues in its court papers.
Portside Freight Terminals Ltd says it put out a notice invoking the provisions of the licence agreement and called on KPA to appoint four senior managers to deliberate on the dispute.
“The defendant did not respond, thereby declining to act in accordance with clear dictates and provisions of the binding agreement between both parties,” says the company.
The company further says that, on August 18, it notified KPA that it had appointed an arbitrator to resolve the dispute.
“The plaintiff required the defendant to either agree on the choice of appointment or propose an alternative for the plaintiff to consider whether to agree or not. The defendant has done neither of the two,” the company goes on to say.
Portside Freight Terminals Ltd says that, in terms of law, arbitration commenced in the dispute when it appointed an arbitrator and requested KPA to either agree on the appointment or propose its own for Portside’s consideration.
The company is seeking protection by grant of, among others, orders of injunction to restrain KPA from derogating from the provisions of the licence agreement signed between parties on December 10, 2020.
Portside Freight Terminal Ltd also wants a declaration that arbitration proceedings between it and KPA were properly instituted by its letter requiring the ports agency to agree to the appointment of the arbitrator it (Portside) appointed for consideration for appointment.
