Grain Bulk Handlers Ltd loses 24-year grain handling monopoly at Mombasa port

KENYA – The monopoly of handling grains at the Mombasa port in the hands of tycoon Mohamed Jaffer’s Grain Bulk Handlers Ltd (GBHL) has ended after the Court of Appeal allowed a second firm to set up shop.

This ruling marks the end of a 24-year era of monopoly in grain handling at the Mombasa Port, previously enjoyed by Jaffer’s GBHL, paving the way for Portside Freight Terminals to establish a competitive facility.

Court of Appeal judges Pauline Nyamweya, Imaana Laibuta and George Odunga found that the High Court erred in stopping Kenya Ports Authority (KPA) from awarding Portside Freight Terminals the deal for building a second facility at the port.

The three judges said awarding the contract to Portside was not discriminatory and that the KPA and the Treasury did not breach the Constitution in tapping the firm.

This decision reshapes the grain handling landscape at the port, emphasizing the judiciary’s commitment to fostering a competitive market in Kenya.

The verdict, in addition, signals a shift towards increased competition in the grain-handling sector in the country.

According to experts, the legal battle between Jaffer’s GBHL and Portside Freight Terminals underscores a broader trend of heightened competition in the operational landscape and market where Jaffer’s conglomerate and its business units operate.

This recent court action comes after Atta Kenya Limited, a prominent manufacturer of wheat flour and animal feed products based in Mombasa, recently filed a lawsuit against Grain Bulk Handlers Limited and four other entities, alleging a multi-million-shilling grain dispute that has persisted for over a decade.

The move came after two defendant witnesses volunteered to take to the stand, to explain who authorized the disposal of 29,500 metric tons of wheat to Grain Bulk Handlers Limited belonging to Atta Kenya Limited in 2014.

Appearing before the Mombasa High Court on February 19, the plaintiff, Atta Kenya Limited wanted the court to declare the sale of the wheat illegal and surcharge the Grain Bulk Handlers Limited, Commissioner – Customs and Border Control, Beyond Auctioneers, Grain Bulk Handlers Limited and Oloo and Chatur Advocates.

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