Struggling retail chain Nakumatt Holdings wants an order issued last year directing it to vacate its former premises at City Mall in Nyali, Mombasa, set aside, even as South Africa-based retailer Shoprite recently signalled opening its third Kenya store at the premises next month.
In its appeal, Nakumatt wants all proceedings and orders given following an application by Ideal Locations Ltd, its former landlord, after the commencement of an insolvency suit in Nairobi, set aside.
Through lawyer Mutiso Ngonze, Nakumatt argued that the Environment and Lands Court did not have the jurisdiction to hear and determine the application.
On March 5 last year, Justice Charles Yano of the Lands Court ordered Nakumatt to vacate City Mall premises and also directed it to pay Sh27.8 million being outstanding rent, service charge and promotion fund as of November 1, 2017.
Mr Ngonze argues that the judge erred in allowing prosecution of the application by Ideal Locations in the face of express orders of stay emanating from insolvency proceedings at the High Court in Nairobi.
“The judge erred in discounting the appellant submissions in respect of the respondent action as brought under the provisions of Sections 561 (4) (e) and (f) Insolvency Act,” argued Mr Ngonze in his memorandum of appeal.
Through lawyer Willis Oluga, Ideal Locations opposed the appeal, arguing that the Lands Court had the jurisdiction to determine its application.
“It is apparent that the appellants do not object to the jurisdiction of the superior court (ELC), they only have a problem with Justice Yano but are otherwise agreeable to the matter being heard by a different judge of the ELC,” Mr Oluga told the Court of Appeal.
Mr Oluga told Appellate Judges Daniel Musinga, Gatembu Kairu and Agnes Murgor that the retailer’s former landlord did not take any action that is in contravention of Section 30 of the Insolvency Act.
He also argued that orders issued in insolvency proceedings at the High Court in Nairobi were not part of the record in the Environment and Lands Court.
Mr Oluga further told the court that Nakumatt’s intention has always been to cling to Ideal Location Ltd’s premises without paying rent.
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