The High Court has temporarily barred the State from obstructing an agreement that had permitted a company associated with former Mombasa governor Hassan Joho to handle cargo going to South Sudan.
Justice Alfred Mabeya issued orders prohibiting Kipchumba Murkomen, the Transport Cabinet Secretary, and Moses Kuria, the Cabinet Secretary for Trade, from altering the current agreement that permits Autoports Nairobi Freight Terminal Ltd. and Compact Freight System to handle South Sudanese cargo.
According to the 2 businesses, they manage, store, and warehouse general and containerized goods that travels from South Sudan to Kenya via the Mombasa port.
The court was informed that Mr. Kuria allegedly threatened to order Kenya Ports Authority to refuse to uphold the agreement, depriving the two companies of the chance to store cargo going to South Sudan.
“Having established that the petitioners’ appointment was regular and having considered the evidence tendered to support the various investments undertaken by the petitioners subsequent to their appointment, the petitioners would suffer prejudice should they be stopped from undertaking their mandate,” said the judge.
The court ordered conservatory orders, preventing the government from interfering with the agreement while the matter is being decided, and certified the application as urgent.
The companies asserted, through attorney Philip Nyachoti, that the Kenya Revenue Authority (KRA) has properly authorized them to run container freight stations (CFS).
He said that the businesses act as customs bonded warehouses for any cargo that the KPA has given to the two businesses to store, pending clearance and removal by the shipment’s importers.
According to Mr. Nyachoti, Transport CS and KPA hired the 2 companies in 2013 to handle, store, and warehouse all imported and containerized cargo going to South Sudan.
Mr. Murkomen instructed KPA in a letter dated 13 December, 2022 to have the two companies handle and store all goods headed for South Sudan that was passing through the port after being vetted.
The firms claimed that after the appointment, they made significant investments and signed contracts with other parties because they had reasonable and genuine expectations that the appointment would remain for a long period, barring any improper behavior.
Mr. Nyachoti further argued that the business made further expenditures after the appointment last year in order to develop and improve the productivity of its warehouses.
He said that Compact Freight had spent more than KSh1 billion to build the necessary facilities to complete the work.
Transportation services, container loading and unloading services, cargo warehousing space extension, upkeep of the most advanced data processing system, and increased security in the warehousing facility are all included in the infrastructure development. All of these services are necessary to assure the safety of the cargo.
According to him, the companies need continue operating for ten to fifteen years with the current appointment in order to return the significant investment.
The attorney asserted that Mr. Kuria was not authorized to reverse the actions of a previous cabinet secretary.
Through PS Transport Mohamed Daghar, the government refuted the claims in an application, claiming that it lacked the authority to appoint any clearing and forwarding agents or CFS for an importer or exporter of goods in transit.
The PS said the South Sudanese government had designated the two firms as its preferred CFS for its imports in a letter on 9 November, 2022, and the same was accepted by the Kenyan government.
