17 October 2017

Kenya: Nakumatt Junction Ruling Set for Next Week

Photo: Daily Nation
Nakumatt Junction on Ngong Road in Nairobi.

Troubled retailer Nakumatt will on Wednesday next week know whether it will continue to be a tenant at the upmarket Junction Mall.

The retailer is fighting a bid by the mall's owners to shut down its premises following alleged breach of the tenancy agreement.

Nakumatt yesterday urged High Court Judge Joseph Onguto to restrain the Junction Ltd from evicting it, saying there is already in place an order issued on August 28 stopping all creditors from interfering with its management and operations.

Under the law, property belonging to a company or individual facing insolvency proceedings in court, as is the case with Nakumatt, is protected from attachment for purposes of recovering the debt.

The Junction Ltd, however, says that it is currently facing huge losses and that there is no guarantee Nakumatt will be able to compensate it.

The owners of the mall urged the court to vary the August 28 order so as to allow them to evict Nakumatt and cushion themselves from further losses.

"The damage to us can't be redeemed by the fact that Nakumatt is already facing a petition for being unable to pay its debt. It means that we will have to underwrite all the losses from October 1," said Junction Ltd's lawyer.

Nakumatt is said to owe the Junction between Sh50 million and Sh75 million.

It also emerged that Nakumatt and the mall's owners had entered into an agreement in relation to the premise. The Mall owners told the court that Nakumatt has continued to use the premises in a manner that is against the surrender agreement.

The lawyer representing the Mall owners said that the damage they are currently facing is enormous given that Nakumatt as an anchor tenant, was the driving force of all the other tenants and that following the latest turn of events, other tenants have already approached them asking for rent reduction of almost 25 percent.

The Mall owners pleaded with the court to allow them evict Nakumatt from their premises saying that it is not unusual since the retailer has already vacated the Thika Road Mall (TRM), and that surrender of the premises is therefore necessary.

"We don't know whether we will be paid. The Junction Ltd will not have a remedy in the present circumstances," said the lawyer for the Mall owners.

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