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Citizen Weekly

Friday, 19 September 2014

NAKUMATT SUED OVER CONSTRUCTION



Nakumatt Supermarkets has obtained temporary orders against NSSF stopping ongoing construction of the Hazina Trade Centre which houses its Lifestyle branch, claiming Sh1.6 billion compensation for lost business.

The Hazina Trade Centre, which at 39 stories is expected to be Nairobi’s tallest skyscraper, is undergoing construction to add onto its current eight floors.

The statutory workers’ retirement scheme, the National Social Security Fund (NSSF), owns the building. The retail chain further wants the court to block construction of the Sh6.7 billion tower until after 2023, when its lease expires. The retailer wants the construction that started in December stopped on the grounds that it is disrupting its business.


NSSF, however, in its defense said the suit had come as a surprise, arguing that the agreement signed between itself and Nakumatt allowed for construction of extra floors with no liability to pay any compensation for loss of profit resulting from the same.

“An order of injunction be and is hereby granted for 14 days only restraining the 1st and 2nd defendants from dropping building materials or causing noise or dust and/or from delivering building materials, machinery or in any way interfering in the suit property… or blocking the entrances with scaffold or any other material of whatsoever nature,” ordered Justice Lucy Gacheru.

NSSF and China Jiang Xi International, which is the contractor, are listed as 1st and 2nd defendants respectively. NSSF and the Chinese firm Tuesday asked Justice Gacheru not to extend the order that she issued on August 29.

They told the court that they have put in place all necessary security measures and reduced disturbance to the bare minimum.
NSSF told the court it will incur massive losses if the injunction obtained by Nakumatt is extended. The judge will on Wednesday morning make her verdict on whether the interim orders will be extended or not.

Nakumatt in its application says it has a 20-year lease agreement with NSSF from 2003 to carry its supermarket business from the ground, 1st and 2nd mezzanine floors of the building.
The supermarket says the contractor is interfering with its business by dumping building material waste, installing machinery and cranes, and causing what it calls unprecedented nuisance to its staff and shoppers.

The petitioner further says the contractor has blocked entrances by scaffolding the entire premises, interfering with human and motor vehicle traffic.
Nakumatt claims that attempts to have the issue sorted out has borne no fruit, arguing that it has been unable to access NSSF’s management.

Nakumatt says NSSF cannot undertake the project in its current form, arguing that the premise is a busy trading and shopping centre with hundreds of shoppers frequenting its supermarket business that operates for 24 hours.

The petitioner wants a permanent injunction stopping the construction until after the expiry of its lease, or until it reaches an agreement with NSSF.

It is further seeking Sh1.6 billion compensation for lost profit, arguing that the number of shoppers has dropped by 37 per cent, causing it huge loss and damages.
NSSF, citing clauses of the lease agreement, sought to dismiss claims for compensation arguing that Nakumatt had agreed to accept the business risks associated with future development of the building.