The High Court of Kenya has deemed an arbitration award to businessman Kamlesh Pattni’s World Duty Free Limited (WDF) as ‘illegal’ in a settlement dispute with the Kenya Airports Authority (KAA).

A judge dismissed a ruling that required KAA to pay WDF the sum of KES8.5bn (US$78,554,419.2) in damages, on the basis that an original agreement to operate duty free shops was based on ‘bribery and corruption’.

KAA had been ordered to pay WDF, trading as Kenya Duty Free Complex, a settlement in 2012 to end a long-running dispute dating back 30 years.

‘ILLEGAL, NULL AND VOID’

The dispute hinged on WDF’s claim to operate duty free shops exclusively at Jomo Kenyatta and Mombasa airports under a contract, something KAA challenged in a judgement.

The Court stated that the award contained in a letter dated 21 January 2013 is ‘contrary to public policy on account of the fact that that the arbitrator disregarded, ignored and or misinterpreted the legal effect of a 2006 decision by the International Centre for Settlement of Investment Disputes (ICSID) between World Duty Free Company and the Government of Kenya’.

As a result, the High Court has upheld the ICSID’s original decision that an agreement between the government and WDF on 27 April 1989 was ‘illegal, null and void’ as it was procured through ‘bribery and corruption’.

“Neither WDF nor Kamlesh Pattni has any right to operate duty free shops and to advertise at Jomo Kenyatta International Airport or Moi International Airport,” read a statement.

“We are pleased to note that the decision of the court brings to closure the long-standing disputes and court cases between KAA and WDF.”

Pattni surrendered the duty free shop operations at Jomo Kenyatta in 2013. These were later re-tendered by KAA and won by Dufry under a 10-year contract in 2014.