On February 12, judges at the East African Court of Justice will rule whether the court will hear a suit filed by Arusha-based private firm Modern Holdings (EA) Ltd against the Kenya Ports of Authority or ask the claimant to seek legal redress elsewhere.

This is because Kenya does not have a trade tribunal to handle commercial disputes. This also is the first commercial case to be filed before the Arusha-based court since it started operations in 2001.

Arguing for the claimant, Nairobi-based lawyer Paul Muite told the second session of the preliminary hearing of the case that in the absence of a trade tribunal in Kenya, parties seeking to file commercial claims against the country’s institutions are forced to go to the East African Court of Justice.

He added that, while Tanzania and Uganda have either already established or are in the process of establishing their own trade tribunals, Kenya is lagging behind, making it difficult for foreigners to lodge trade-related complaints in the country.

Last October, Modern Holdings filed suit against the KPA for losses of $24 million on imports ordered from the United Arabs Emirates through Mombasa’s Kilindini port early last year that were never delivered, and which eventually expired.  

Geoffrey Imende of Mohammed Muigai Advocates for the respondent, quoted Article 30 of the Treaty for the establishment of the East African Community and argued that the suit need not be handled at the Community court.

Article 30, according to Mr Imende, restricts legal determination to apply only to institutions of the partner state governments or those formed under the EAC by the Community summit. This means private companies and individuals may not be charged at the court.

However, Mr Muite challenged Mr Imende by pointing out that the Article 30 was subject to the provisions of the previous Article 27 which states in section 1, that the East African court shall initially have jurisdiction over the interpretation and application of the Treaty.

According to the suit, Modern Holdings had imported 21 containers of juices and mineral water that were not cleared in time from the port last January and subsequent months, occasioning a $24 million loss to the company.

The company claims that port officials attributed the delay to the post-election violence that rocked Kenya in the aftermath of the December 27, 2007 disputed presidential election. It, however, contended that port operations were disrupted for only a few days.

Modern Holdings is the sole East African distributor for the Masafi brand of juice and mineral water products from the United Arab Emirates.  

Legal experts have termed the case against KPA as a challenge for the EA Court of Justice.

Modern Holdings director Mohamed Minja said 21 containers of various juices and mineral water imported via the Mombasa port, could not be cleared in time from the port by officials in January last year and subsequent months causing them to expire, incurring a loss of $24 million.  

Mr Minja, who said he had been importing Masafi juices and mineral water from Dubai since 2006, rejected KPA’s explanation and said the election violence disrupted port operations for only a few days.  

The Arusha businessman is represented by Mr Muite as lead counsel, and advocates Kioko Kilukumi, also from Nairobi, and John Umbulla from the Imboru Advocate Chambers based in Arusha.  

In his suit Mr Minja claims that every effort was made to have his cargo released since he started “negotiations” with the port authorities over the matter in February last year.

The company claims it paid Sh3 million ($38,961) to have the juices and mineral water cleared. Even before the imported goods expired, the cumulative storage charges had more than doubled, to Sh7 million ($90,909). 

Now, the Arusha-based company blames the KPA management for transferring the consignment to the Makupa Transit Shed, a container terminal at the Mombasa port.  

According to the claimant, all efforts were made to have the containers released, adding that at one time they sought the intervention of Kenyan Minister for Transport Ali Chirau Makwere, noting that even written waivers from KPA senior officials to the Makupa terminal to have the containers released were turned down, leading to the expiry of his goods.