A contractor who built a new hangar and office block for Jetlink Express has asked the High Court to stop the collapsed airline from selling the Sh174 million property until its Sh29.5 million dues are cleared.
Sharaddha Builders Limited says it has received information that Jetlink is selling off its assets and now fears that it will be unable to recover its dues from the collapsed airline.
Jetlink hired Sharaddha in 2010 to oversee the project’s construction, but the two firms have since differed over the amount the contractor is still owed.
Jetlink says the contract with Sharaddha provided for arbitration in the event of a dispute, and wants the court to refer the case to an arbiter.
“Sharaddha has completed the construction of the new hangar and office block as agreed. Jetlink has not paid the final certificate for Sh29.5 million despite demands made. Jetlink is in the process of selling the property and has threatened to shut its Nairobi operations. The said closure would prejudice Sharaddha greatly in the recovery of its dues,” the firm says.
The airline suspended services in November citing cash shortages after it was unable to access about $2 million (Sh202 million) worth of ticket sales held in bank accounts in South Sudan. Heavy debt owed to several creditors like Equity Bank have stalled its planned revival.
Jetlink in its application for arbitration adds that the suit is time barred and insists that Sharaddha had 90 days to seek resolution of any dispute arising from the contract as per Kenya’s building regulations.
“Sharaddha has commenced this suit in breach of an arbitration agreement. Sharaddha and Jetlink through an agreement dated January 2010 agreed to resolve any dispute through arbitration.
“This suit is also time barred by dint of article 45 of the Joint Building Council of Kenya which requires disputes to be resolved through an arbitration process commenced within 90 days of occurrence of the matter raising dispute,” says Jetlink.
The collapsed airline says it has no problem with the suit being referred to arbitration, and wants Justice Joseph Sergon to stop any further proceedings in the case until it agrees with Sharaddha on the mediation option.
Jetlink executive director Kiran Patel, however, says the judge should strike out the entire suit if Sharaddha are opposed to mediation, as the contractor breached the agreement signed prior to commencement of the project.
Mr Justice Sergon will deliver his ruling on October 15.