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Economy

Airbase contractor seeks jail for PS over Sh1bn claim

Nairobi-based contractor Kay Construction is seeking to jail Defence PS Peter Kaberia for allegedly stalling a Sh1 billion payment it was awarded by an arbitrator for work done on the Laikipia Air Base.

Kay Construction has sued Attorney General Githu Muigai on behalf of the Department of Defence, saying Mr Kaberia has in contempt of court refused to effect the Sh1 billion payment despite being furnished with the arbitrator’s ruling and a court order directing the government to pay the firm.

Arbitrator Joseph Thuo in 2011 ordered that the government pays Kay Construction Sh335 million for the works on the Laikipia Air Base. He also ordered that the amount would gain a 16 per cent interest from 2009 until the construction firm is paid in full.

Kay Construction in July last year obtained an order from the court directing the government to pay it the dues.

The AG has opposed the suit, arguing that money decrees such as that Kay Construction is pursuing cannot be executed using contempt of court proceedings.

“On January 12, 2016 the Ministry of Defence held a meeting with Kay Construction following which the plaintiff agreed to the Ministry’s proposal to pay the principal amount plus actual interest accrued over the years based on commercial bank rates as opposed to the interest rate in the decree.

“Mr Kaberia has disregarded and continues to ignore the orders of this court and is consequently denying the applicant its rightful dues for work done over 20 years ago,” says the construction firm’s director Hasmitta Patel in an affidavit.

Prof Muigai however insists that Kay Construction did not furnish Mr Kaberia with the court order and arbitration ruling in person hence it is unfair to crucify him for allegedly stalling the payment.

He adds that Kay Construction has not proven that Mr Kaberia has received funds from the Treasury to offset the Sh1 billion payment.

Kay Construction says in its suit papers that it had communicated with Mr Kaberia between November and December last year and that the PS eventually agreed to pay it the due sums.

“The decree in issue was not directed at Mr Kaberia and therefore he cannot be held in contempt.

Kay Construction has not proved that Mr Kaberia received funds from the consolidated fund to offset the decree herein and has refused to pay the decretal sum,” Prof Muigai holds.

Justice Eric Ogola has ordered the parties to appear before him on March 18 to set a ruling date for the Attorney General’s opposition to the suit.

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