Relief for Joho-linked firm as court stops state interference with business
Former Mombasa Governor Hassan Ali Joho before a Senate committee in 2021. Court has blocked two ministers from stopping a KPA deal with a Joho-linked freight firm.
What you need to know:
- The court heard that CS Chelugui threatened to instruct the Kenya Ports Authority (KPA) not to honour the agreement.
The High Court has temporarily blocked the government from interfering in a deal that allows a company linked to former Mombasa governor Hassan Joho to handle cargo destined for South Sudan.
Justice Alfred Mabeya issued an order restraining Transport Cabinet Secretary Kipchumba Murkomen and his Cooperatives and Micro and Small Enterprise Development counterpart Simon Chelugui from interfering with the existing arrangements between the government, Autoports Nairobi Freight Terminal Ltd and Compact Freight System.
The court heard that Mr Chelugui threatened to instruct the Kenya Ports Authority (KPA) not to honour the agreement.
"Having found that the petitioners' appointment was regular and having considered the evidence adduced in support of the various investments made by the petitioners after their appointment, the petitioners would suffer prejudice if they were prevented from carrying out their mandate," Justice Mabeya said.
The judge certified the application as urgent and granted a conservatory order restraining the government from interfering with the scheme pending the determination of the case. The companies, through lawyer Philip Nyachoti, said they were duly authorised by the Kenya Revenue Authority (KRA) to operate container freight stations (CFS).
And in a letter dated 13 December last year, CS Transport Kipchumba Murkomen instructed KPA that all cargo destined for South Sudan passing through the port should be handled and stored by the two companies after verification.
Mr Nyachoti further submitted that the companies had invested heavily to develop and improve the efficiency of their warehouses. He said Compact Freight had invested over Sh1 billion to put in place the necessary infrastructure to execute the contract.
He said with the current appointment, the companies should operate for 10 to 15 years to recoup the heavy investment.
The lawyer said it was not open to Mr Chelugui to undo what another cabinet secretary had done.
The government responded in a statement through Transport Principal Secretary Mohamed Daghar, saying, it had no mandate to appoint clearing and forwarding agents for any importer or exporter. The PS said the South Sudanese government had appointed the two companies as its preferred CFS in a letter dated November 9, 2022, which was accepted by the Kenyan government.
Mr Daghar said it was in Kenya's interest that the landlocked states use the inland container depots in Nairobi and Naivasha until President William Ruto's directive that they return to the port of Mombasa.
On this basis, he said, the Government of Kenya recommended to the Government of South Sudan to continue using the Nairobi and Naivasha inland container depots, although South Sudan is free to choose its preferred cargo clearance point.
The PS said the firms had failed to prove that the Government of Kenya had acted in a manner that amounted, or was likely to amount, to a violation of their constitutional rights as alleged. Furthermore, the case is based on rumours whose source has not been disclosed, Mr Daghar said.
