20 August 2014

Kenya: Two Firms Battle Over Control of Sh100 Million Planes

A company associated with Fly540 is petitioned a decision requiring it to hand over two of its aircrafts worth $1.2 million (Sh105.6 million) to a private company despite cancellation of sale agreement.

According to court documents Sandhoe Investment Kenya said it is challenging the decision by arbitrator John Ohaga and its execution.

Sandhoe Investment Kenya had initially entered into sale agreement with Seven-Twenty Investment for sale of two aircrafts but rescinded its offer after the latter breached time limit within which payment was to be done. Subsequently the matter was referred for arbitration

Ohaga who was the sole arbitrator in the matter ruled on July 10 , 2014 that Sandhoe investment Kenya should complete the transfer of two aircrafts to Seven-Twenty Investment. He further directed Seven-Twenty to pay the outstanding balance of the purchase price for the two aircrafts.

Aggrieved by the decision Sandhoe Investment Kenya has now moved to court seeking to have it rescinded.

Sandhoe says Ohaga in his award dealt with a dispute not contemplated by terms of reference to the arbitration.

For example, it said, in determining whether time was of essence to an agreement between the two parties the award solely relied on a third parties failure to enforce an undertaking.

The company further complained saying the award went far beyond the scope of the inquiry.

The court was told that the award of the arbitrator not only dealt with a dispute beyond the scope of the reference but was blatantly in contradiction with public policy which requires certainty in the application of judicial precedent.

Sandhoe Investment Kenya says the continued possession of the aircrafts by seven twenty international pursuant to the award exposes aircrafts to a high risk of wastage and deterioration which is severely detrimental to its title in the aircrafts worth in excess of $1.2 m.

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