Kenya: Del Monte Wants Sh37 Million From Kenya Railways for Spoilt Pineapples

18 October 2021

Fruit processing multinational Del Monte wants Kenya Railways to pay it $338,915 (Sh37.6 million) as compensation for a consignment of pineapples damaged following a train accident inside Dandora Railway Station last year.

If successful, the petition could leave the state corporation sitting on a powder keg as it would open floodgates for similar demands.

Del Monte has sued Kenya Railways, arguing that the state corporation has refused to pay for the damaged consignment of pineapples, or release documents that would enable filing of a detailed compensation claim.

Kenya Railways is yet to file a response in the suit.

The Thika-based multinational has since February, 2020 had a contract with Kenya Railways for the transport of fruits meant for export to Mombasa.

Under the contract now filed in court as evidence, Kenya Railways had agreed to pay for any loss or damage to goods, in the event that the state corporation was in custody at the time of any incident.

Only acts of nature, war, auctions, government orders or negligence in packaging by clients would excuse Kenya Railways from liability.

Early morning on June 3, 2020 a train fell off its tracks inside Dandora Railway Station.

Kenya Railways at the time said that the incident involved a train plying the Ruiru-Nairobi route, forcing the company to suspend passenger services between the two towns on June 3, 2020.

Del Monte's suit has now revealed that freight services were also affected, and that goods worth millions were destroyed by the train derailment.

The Nation is yet to establish how many other companies ferrying their goods through Kenya Railways on the day were affected.

Managing Director Philip Mainga promised to check the state corporation's records on Monday to confirm whether its freight insurance was up to date at the time of last year's train derailment.

Logistics firms usually take out freight insurance to cater for refunds for goods damaged during accidents and while under their custody.

In court, Del Monte insists that the train derailment last year was a result of Kenya Railways' negligence, and wants the court to issue compensation orders.

Full transport costs

Between April 20 and May 31, 2020 Del Monte handed over 18 containers with pineapple slices, concentrate and tidbits to Kenya Railways for transport from Thika to Mombasa. The pineapples weighed a total of 427.96 tonnes.

Del Monte says it paid the full transport costs, but the court papers do not indicate the exact amount charged to ferry the pineapples to Mombasa.

The contract filed in court, however, indicates that transporting each container from Thika to Embakasi costs Sh15,000. This means that Del Monte paid Sh270,000 to move its 18 containers from Thika to Embakasi.

Kenya Railways loaded the 18 containers onto nine wagons.

After the incident, Del Monte Finance Director Stavros Constantinou wrote to Kenya Railways boss Philip Mainga requesting for the original police abstract recorded in regard to the incident, and the statement recorded by the ill-fated locomotive driver's statement and operation license.

Mr Constantinou also asked for Kenya Railways' comprehensive report detailing the state corporation's assessment of the derailment, alongside statements from any witnesses that might have seen the train fall off its tracks.

The information was aimed at determining how much Del Monte would claim from Kenya Railways for compensation.

"When the plaintiff learnt of the said accident, it wrote to the defendant a protest letter dated June 30, 2020 requesting for documents and further information in order to document the claim against the defendant. Despite numerous demands and reminders from the plaintiff to the defendant to pay up the damages, the defendant has totally refused, ignored and/or neglected to uphold its end of the bargain," Del Monte's finance and insurance officer Samuel Ngige Kamau says in court papers.

Kenya Railways has not responded to the suit.

Aside from the Sh37.6 million compensation, Del Monte wants the High Court to award it general damages, interest on all amounts claimed and payment of the multinational's legal bills.

The Kenya Revenue Authority (KRA) on February 1, 2020 confirmed that it had witnessed the destruction of what was left of Del Monte's damaged goods.

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