The Court of Appeal has suspended the execution of orders quashing directives issued by the government requiring that all cargo imported through the port of Mombasa be transported to Nairobi and the hinterland exclusively through the standard gauge railway (SGR).
The court suspended the orders pending the hearing and determination of an appeal challenging the quashing of the directives by a five judge bench of the High Court.
The decision is a big relief for the government due to the fact that had there been no suspension, transporters would have been free to move their imported cargo in whichever mode of transport they preferred.
The Kenya Ports Authority (KPA) had filed an application at the appellate court seeking to have the orders suspended pending the hearing of its appeal. The state agency argued that the directives were meant to effect the take or pay agreement, which is a conduit for the loan for the construction of the SGR to be repaid.
According to the take and pay agreement, KPA undertook to consign to Kenya Railways as a carrier of a set volume of freight and or other cargo, pursuant to commencement of SGR operations to KPA’s inland container depot (ICD) at Embakasi.
KPA had also argued at the Court of Appeal that with the quashing order in place, it would be impossible to meet repayment obligations, leading to default.
The ports agency also told the court that public finances would be spent in complying with the orders given, and it was apprehensive as to whether it would recover any funds paid out should its appeal succeed.
KPA also told the court that the issues to be argued on appeal are complex and of significant public importance.
Appellate judges Asike Makhandia, Hellen Omondi and Mumbi Ngugi ruled that their perusal of the application by KPA, grounds and supporting affidavit, raises the issue of violation of the Constitution and fair administrative procedure which, in their view, merits consideration by the court.
“We hold and find that the applicant (KPA) has shown that indeed it has an arguable appeal and has also shown its appeal would be rendered nugatory should the application fail,” ruled the judges.
They also added that the respondents had not shown whether they can refund sources utilised in complying with the orders.
In November last year, the High Court quashed the government’s directives and suspended them for 180 days.
The suspension for 180 days was to enable the government to remedy the faults identified by the High Court, among them conducting public participation on the directives.
The five judge bench of the High Court comprised Justices Lydia Achode, Eric Ogola, Anthony Mrima, Joel Ngugi and Pauline Nyamweya — who has since moved to the Court of Appeal.
They ruled that the directives were in violation of the Constitution as they were not subjected to public participation.
The five judge bench further ruled that the directives by the government on the requirement to have cargo transported via SGR affected the rights of Kenya Transporters Association (KTA) and other stakeholders, hence KPA and Kenya Railways were obligated to subject them to public participation.
Their decision was as a result of two separate petitions which were consolidated, filed by Mr William Ramogi, Ms Asha Omar and Mr Gerald Kiti and KTA.