Local contractor Epco Builders has asked the High Court to bar the National Housing Corporation (NHC) from releasing Sh123 million to American firm Lemna International Inc following a pay dispute over 230 houses it was sub-contracted to build in the State corporation’s Lang’ata housing scheme.
Epco Builders says Lemna, which was hired by the NHC to oversee construction of the houses, subcontracted it to do the works at Sh862 million. It adds that it completed the works but Lemna is yet to pay it a Sh123 million balance despite several demands.
The local subcontractor adds that letters to the NHC requesting the State corporation to intervene have failed to elicit action.
The NHC is yet to respond to the suit but has asked the High Court to strike it out, arguing it has no contract with Epco Builders hence should not be dragged into the payment dispute.
The 230 houses are part of the NHC’s Lang’ata Housing Scheme Phase IV. The houses were completed in 2012.
“Lemna has in breach of the contract failed, ignored or neglected to pay Epco Builders the sum of Sh123,818,265 and has continually ignored demand letters and reminders from Epco Builders...” Epco says.
“Epco Builders has written to the NHC, being Lemna Inc’s employer on diverse dates requesting it to intervene and have the issue of unpaid dues addressed but to no avail,” the local subcontractor’s managing director Ramji Devji Varsani adds in suit papers.
The NHC however argues that the sums in dispute have arisen from a contract it is not party to hence it has been wrongly enjoined in the suit.
“Epco Builders was contracted by Lemna Inc as an independent contractor, thus Lemna Inc is solely responsible for payment of the contract price,” the NHC says.
Justice Olga Sewe has ordered the NHC and Epco Builders to file their written arguments on whether the NHC should be struck out of the suit and appear before another judge—Rachael Ngetich—on September 22 for a mention.