A dispute between retail chain Naivas Ltd and a former landlord over unpaid rent amounting to Sh52.3 million has been referred to arbitration.
Naivas argues that its business went down when the government started building the Kiserian-Ngong road, limiting access to the mall that housed its store.
It says the landlord, Premier Home & Properties Ltd, is to blame for building the mall close to the road and leaving no buffer zone to allow easy access to the complex.
Naivas leased the store for 10 years from August 2012. It says it used to get about 2,000 shoppers daily until sometime in October 2019 when the road work.
The work blocked access to the supermarket, causing it to lose business and it had to close down.
Naivas says the issue is whether it is entitled to terminate the lease and whether it is liable for rent amounting to Sh52,306,053 for the unexpired period
“Blocking access to the premises affected the business and flow of customers which is about 35 per cent, and attempts to engage the property dealer were futile. This left the shop with no choice but to close down,” the retailer’s representative Evelyne Njeri Wanjau told the High Court in Kajiado.
But Premier Home & Properties maintains it is entitled to the rent. It says Naivas requested a 10-year fixed term with no termination clause. The lease was to expire on July 31, 2022.
The firm says trouble started on December 31, 2020 when Naivas terminated the lease prematurely and that there had never been a dispute about the lease.
Premier Home & Properties’ representative, Jane Wangui Maina, denied that the retailer engaged the firm on the issue.
She said the property firm had suffered a loss of Sh52.6 million as a result of the retailer’s premature termination of the lease.
Judge Chacha Mwita referred the matter to arbitration after finding that the lawsuit was filed in court in violation of a clause in the lease agreement that calls for arbitration when disputes arise between the parties.
“I am satisfied that the matter raised in the pleadings is an issue that falls within the arbitration clause and one which should be referred to arbitration,” he said.
He directed the two parties to appoint an arbitrator within 30 days and, in default, the president of the Law Society of Kenya should pick one.