Nakumatt wants eviction case by Mombasa mall struck out

City Mall in Mombasa County. PHOTO | FILE | NATION MEDIA GROUP

What you need to know:

  • But Ideal Locations Ltd says the case falls within the jurisdiction of the Environment court.
  • Mr Oluga said the defendant has breached the terms of lease agreement by defaulting in the payment of rent.
  • He argued business owners within the mall have complained about the negative impact Nakumatt’s poor performance.

Troubled supermarkets chain Nakumatt wants a case by its landlord at City Mall building in Mombasa seeking an eviction order against it over unpaid rent which stood at Sh27.8 million by November struck out.

Nakumatt Holdings Ltd, the parent company of the supermarket chain said Ideal Locations Ltd, the landlord, filed the case in the “wrong court”.

Lawyer Lawrence Ng’ang’a, for Nakumatt, said the Environment and Land Court does not have jurisdiction to preside over a matter relating to commercial and contractual issues.

Mr Ng’ang’a Monday told Justice Charles Yano that the court is not the one contemplated by the Insolvency Act.

“The court lacks constitutional jurisdiction to hear a matter subject of insolvency proceedings,” said Mr Ng’ang’a.

RIGHT JURISDICTION

Through lawyer Willis Oluga, Ideal Locations Ltd which seeks for an order to have Nakumatt immediately vacate the premises and, in default, to be at liberty to evict it, said the issues fall within the jurisdiction of the Environment court.

Mr Oluga said the defendant has breached the terms of lease agreement by defaulting in the payment of rent, service charge and promotion fund when the same have fallen due.

“The defendant is an anchor tenant in the premises and its performance has a direct and indirect impact on other businesses within the shopping mall,” said Mr Oluga.

He argued that business owners within the mall who are all tenants have complained about the negative impact Nakumatt’s poor performance has had on them with some threatening to either vacate the premises or stop paying rent.

“The rent collected from the property is assigned to service a credit facility of Sh545 million advanced to the plaintiff by Prime Bank Ltd with the premises as security,” said argued Mr Oluga.

NOT FOR CHARITY

The plaintiff further argues that it developed the mall for investment and not for charity purposes and since Nakumatt is no longer in a position to pay rent, it should vacate immediately.

Mr Oluga further told the court that Nakumatt’s continued occupation of the premises does not any useful purpose since it no longer does any meaningful business and the shelves are virtually empty.

The plaintiff argued that the possibility of Nakumatt paying rent is very remote especially after its much touted merger with Tusker Mattresses Ltd has been faced with serious objection.

Ideal Location Ltd argued that if Nakumatt continues to occupy the premises, the mall is likely to turn into a deserted and ghost structure with no traffic, hence it will affect the overall value of the prime commercial enterprise.