A lawyer who represented the Kenya Airports Authority in its fierce battles with tycoon Kamlesh Pattni has disclosed why the parastatal remains at odds with the businessman.
Mr Fred Ngatia, who was at the heart of the dispute when Mr Pattni was evicted in August 2003 — but who later differed with KAA over a Sh250 million fee note — now says that his advice on how to keep Mr Pattni out of the airports was not fully taken into account.
Although he was advising KAA when suspended Transport Cabinet Secretary Michael Kamau and Mr Pattni announced that the businessman had stopped his multiple court battles with KAA before a formal consent had been signed, the lawyer now says KAA remains entangled with the billionaire because of “a miserable little shop” at the Moi International Airport in Mombasa.
Mr Pattni and Mr Kamau announced the stoppage of the court cases at the Ministry of Transport offices in September 2013.
“Today I am here by the will of Almighty to give up on my long-running disputes over the Duty Free with KAA,” said Mr Pattni.
Mr Kamau said Mr Pattni had renounced the controversial Sh4.2 billion award given to him by judge Edward Togbor. KAA has been battling the award in court.
“After a struggle spanning the last 25 years, Kenya Airports Authority has reclaimed its premises,” announced Mr Kamau.
But it turns out that there was no legal backing for the assertion, a reason Mr Pattni still lurks in the shadows of KAA.
In meetings with the Public Investments Committee last week, suspended heads of the Transport ministry and KAA’s former lawyer Fred Ngatia painted the picture of a parastatal that appeared to deliberately enter into bad deals with Mr Pattni.
The “miserable” shop was among five duty free premises — four of them in Nairobi — which should have been leased to Suzan General Trading, a company also associated with Mr Pattni.
But a year after September 2013, when the deal which had a realistic chance of ending the protracted toxic relationship between KAA and the businessman was sealed, the authority had done nothing.
Mr Ngatia and KAA have since been embroiled in a dispute over Sh250 million legal fees. The senior counsel said the fee could be negotiated with a view to reducing it.
The lawyer said he had charged Sh58 million as legal fees for the case filed in the High Court to stop World Duty Free and Diplomatic Duty Free from attaching KAA property for the $49 million award.
KAA says the total sum of fees for the local cases is Sh73 million, with Mr Ngatia telling the committee that they had so far been paid Sh62 million.
Mr Ngatia said the charges for advising on the eviction and the work that followed, which included drafting the deeds of settlement, filing settlements among other things, were charged Sh250 million, which has not been paid.
“The long and short of it is that the issue of outstanding fees is not an issue. Let us not make a mountain out of nothing. Not a single coin has been paid, there is no loss of revenue,” said Mr Ngatia.
Mr Ngatia told PIC last week of the confrontation he had with the KAA board, when he walked into its meeting in August 2014.
“You offered a miserable shop in Mombasa. This shop is still vacant. Nobody wants to go to Mombasa Duty Free. There is low traffic. You are not giving him (Pattni) and therefore his lawyers are telling me that because we are not fulfilling this side of the bargain, they are not going to sign the consents we are preparing. ”
Mr Ngatia was in January 2013 given the job to head a high-powered team to advise KAA on what to do after Justice (Rtd) Edward Torgbor awarded World Duty Free and Diplomatic Duty Free, both related to Mr Pattni, $49 million (Sh4.2 billion) after arbitration.
The senior counsel worked with lawyers Eric Mutua, Waweru Gatonye, Issa Mansour, Tom Macharia and Ahmednassir Abdullahi and would later advise KAA to kick Mr Pattni’s companies out of Jomo Kenyatta International Airport on the expiry of their lease on the night of July 31, 2013.
Suspended Transport PS Nduva Muli told PIC that after the eviction, representatives of Suzan Trading advised KAA that the merchandise removed from JKIA belonged to them and not World Duty Free or Diplomatic Duty Free.
Mr Ngatia was also told that Mr Pattni said he had sold WDF to Arif Hafiz, the owner of Suzan Trading.
Mr Pattni said that because not all the then-empty space at JKIA would be used and because of the loss suffered, he would assign his rights to Mr Hafiz, meaning Suzan would get the shops.
“KAA accepted it and instructed me that the leases would be in the name of Suzan. I was as baffled as you are but you must go by the client’s instructions. You’re not bigger than your client. You’re actually subordinate to your client,” said Mr Ngatia.
Suzan Trading were to be leased, for five years and three months each, four shops at JKIA and a warehouse plus the shop in Mombasa and a store.
This was among the reasons, he said, that Mr Pattni, Mr Hafiz, Transport CS (suspended) Michael Kamau, Mr Muli and KAA management appeared at a press conference at the Transport ministry’s headquarters.
Mr Pattni would put his knowledge of the Bible to good use, saying: “What good is it if we were to gain the whole world but lose our souls? So I say, what good is it if I were to gain the whole duty free monopoly for eternity but lose my soul, peace and have to keep fighting the same authority under whose rule I live in this Kenya of ours.”
According to Mr Ngatia: “The most important thing was to publicly say, ‘Hii mambo imeisha. The shenanigans have come to an end.’”
That would never be, he said, because even after Mr Mutua drew up the leases and the ones for the four shops in Nairobi were taken up, the shop in Mombasa was never made available despite having been vacant.
This would result in the dramatic encounter with the KAA board and a month later, in September 2014, he was asked to prepare the lease and it was done and registered.
At that point, he said, World Duty Free’s lawyer lawyers Adan Ahmed said KAA were harassing their clients and were not willing to give them the shops.
KAA was in the meantime involved in leasing out space at Terminal 1A, the shiny new building which became operational this and originally referred to as Terminal 4.
That concession to set up duty-free shops was given to Dufry International, a Swiss firm, after a second tender was floated, with the four firms that lost unsuccessful in their bid to have the tender review board quash it.
In February, World Duty Free, the firm associated with Mr Pattni, sued KAA over the concession to Dufry on the grounds that it had a similar contract to that given to the Swiss firm.
Dufry on its part argues that World Duty Free’s tender was only for the running of the concessionaire shops A, B and C at JKIA. The Swiss firm holds that the deal to run a duty free shop at the recently completed terminal 4 was not part of the contract awarded to World Duty Free in 1989.
World Duty Free, which now denies any links with Mr Pattni, has revived two other cases it filed against KAA in 2012 and 2013 fighting the cancellation of its concessionaire shops tender.
Back at PIC, whose vice chairman Kimani Ichung’wa says wants to have KAA rid of all its liabilities, Mr Ngatia said that all the problems with Mr Pattni’s various forms- Suzan, WDF or DDF- would have been cleared had the shop at the airport in Mombasa been given to Suzan as agreed.
“What to me, to me only, is not correct, is starting that process and not finishing it. You start that process, you must finish it. If you don’t finish it, you are inviting a problem,” he said.
PIC’s inquiries continue, with KAA expected to give their side of the story.
