Kebs empty accounts thwart Sh565m pay to labs contractor
The firm argued that Kebs introduced a criteria on eligibility, which it deemed offensive and discriminatory as it was fashioned to lock it out of the procurement process.
Depleted accounts held by Kenya Bureau of Standards (Kebs) have frustrated efforts by construction firm Centurion Engineers & Builders to enforce the collection of Sh565.5 million from the State agency.
Centurion built bio-chemical laboratories for Kebs in Nairobi through a 2009 contract, that was initially valued at Sh79.9 million but later grew to Sh228.7 million on additional works.
The standards body refused to pay the amount when the claim was presented, sparking a legal battle and arbitration that has seen Centurion collect small amounts through various garnishee orders, which allow creditors to recover debt through third parties like banks.
In the latest case, the contractor told the High Court that the amount owed by Kebs had grown to Sh569.3 million after Sh15.1 million had been recovered in a previous proceeding.
Justice Alfred Mabeya in a ruling issued on September 26, found merit in Centurion’s application and ordered National Bank of Kenya (NBK) to pay the contractor Sh2.4 million.
KCB-Bank Kenya was also ordered to pay Centurion Sh1.4 million, with the two banks allowed to deduct Sh50,000 from the amounts due to Centurion.
The contractor had sought to recover Sh569.3 million by attaching Kebs accounts at three banks –including Co-operative Bank of Kenya— but the standards body had overdrawn some of the accounts.
NBK told the court that two accounts listed were not maintained by Kebs while one had no funds, having been overdrawn and having a debit (negative) balance of Sh154.4 million.
The lender added that the 14 bank accounts attached did not have sufficient funds to satisfy the decree.
KEBS
“The first garnishee (NBK) expressed its willingness to comply with the court’s decisions regarding the handling of any available amounts,” the court said.
KCB said that Kebs had balances of Sh506,365 and Sh968,987 in two accounts, adding that these were insufficient to settle the claim by Centurion.
Co-op Bank told the court that Kebs did not hold two accounts listed in the court case.
“She further stated that there was no evidence that had been provided as to the existence of such accounts with the second garnishee (Co-op Bank),” the court said, quoting the affidavit filed by the lender’s official.
The court decided to make a partial enforcement of the decree in favour of Centurion, noting the negligible funds available in the accounts confirmed as belonging to Kebs.
“In accordance with Order 23 Rule 4 of the Civil Procedure Rules, the court finds that monies held in the identified accounts to the credit of the respondent should be applied to partially satisfy the decree,” the court said.
When Kebs declined to pay the Sh228.7 million claimed by Centurion, the matter was referred to arbitration in which the contractor was awarded Sh584.4 million as reported in the latest court decision.
In refusing to pay the contractor, Kebs has alleged that the claim was inflated substantially.
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