Duty-free shop tender winner not listed in Kenya, Kamlesh Pattni firm claims

The new Terminal 1A at JKIA that will be used by Kenya Airways and its Sky Team partner airlines. Two firms are locked in a bruising battle for control of duty-free shops here and at the Mombasa airport. FILE PHOTO | JEFF ANGOTE |  NATION MEDIA GROUP

In Summary

• Kenya Duty Free Complex accuses rival Dulfry of operating illegally citing this as grounds to annul the bid.
• Two firms locked in battle over control of facilities at Kenyan airports.

By ABIUD OCHIENG
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A company awarded the tender to operate duty-free shops in Kenya is not registered here, a rival has said.

World Duty Free, which trades as Kenya Duty Free Complex, said in court papers that it discovered that Swiss concessionaire Dufry International AG, as a foreign registered company, has not complied with the law hence it is operating in the country illegally.

This, it said, makes the tender award illegal.

“It is apparent KAA was not transparent and was biased in favour of Dufry International AG. KAA did not do a proper or any due diligence check on Dufry International AG and concluded agreements with a party who was not eligible to do any business in Kenya,” World Duty Free said.

AWARD OF CONTRACT

The two companies are fighting for the award of a contract to operate duty-free shops at Jomo Kenyatta International Airport in Nairobi and at Moi International Airport in Mombasa.

World Duty Free wants the court to quash the contract the Kenya Airports Authority awarded to the Dulfry, claiming that a deal it had entered into with the authority in 1989 to exclusively operate duty-free shops in the airports is still valid.

“We believe that the Jomo Kenyatta Terminal Unit 4 which is now called Terminal 1A is covered by the 1989 agreement since it included future airports,” World Duty Free said in response to arguments by Dufry that the contested area is a new terminal, constructed by KAA, and not covered by the “controversial” agreement.

Dufry said the Public Procurement and Disposal Act and the 2010 Constitution established the mandatory procedures to be followed as a measure of ensuring efficient purchase systems, as well as mechanisms of challenging such procurement by aggrieved parties.

World Duty Free has, however, claimed that the laws came into force well after the 1989 agreement was executed and could not affect the existing exclusive rights it enjoys.

KAA, in its papers, said that in 2013, World Duty Free by itself and through its principal agents, including Kamlesh Pattni, entered into settlement discussions with it in respect of its various suits, claims and arbitral award arising from the various leases signed.

“The said settlement discussions culminated in a press conference on September 16, 2013 and Mr Pattni publicly and freely announced that he had by himself and his companies including World Duty Free, relinquished all his claims over the duty free shops,” KAA said.

KAA said it has honoured its end of the settlement agreement with World Duty Free and the company should not be allowed to renege.