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TheKuwaiti Court of Appeal ruled in favor of the Public Authority of Industry (PAI) in a commercial dispute with warehousing and industrial developer Agility, according to a company disclosure. The dispute revolves around a contract from 2003, concerning a land area in Doha, Kuwait, spanning 941k square meters. The land houses some of the company’s warehousing facilities, which it leases out to customers, according to its website.
The ruling: The court accepted the appeal made by the PAI, overturning a previous decision that had proven the existence of a contractual relationship between Agility and the PAI for a period of twenty years, starting from 1 January 2023, and ending on 31 December 2042, for the land in the Doha area.
The impacts of the ruling are still unclear: The financial impact of the decision is difficult to determine now because “the judgment will be appealed,” Agility said, without clarifying when it plans to appeal the decision. The court has also yet to issue a decision to evict the company from the site, according to the Agility disclosure.
But it could cost the company: If the PAI decides to initiate eviction procedures, Agility would lose the revenue from the site. However, if the PAI files an eviction lawsuit, it is expected that Agility will continue to generate revenue until the eviction ruling is enforced, it said in the disclosure. The land plot is one of five contested by the Kuwaiti government, which together constitute roughly 3.5% of the company’s consolidated revenues (KWD 43 mn), according to an earlier disclosure. The book value of these areas accounts for approximately 6% of the company’s total assets.
Background: Earlier this year, media reports suggested that the PAI may request Agility to vacate certain areas within a week. However, Agility said it had not received any official notification from the PAI or any other governmental entity, and said in a disclosurethat it has the right to manage these lands based on existing contracts and filed lawsuits against the PAI to prove that the contracts for the disputed lands have been extended.
The land plots in question: The five plots of land at risk include one located outside the industrial area in Sulaibiah, one within Sulaibiah, another in Amghara Industrial Area, and another outside the industrial area in Mina Abdullah.
