M-Pesa Academy row over Sh3bn school deepens

Guests tour the M-Pesa Foundation Academy during the institution’s official opening in Thika, Kiambu County. FILE PHOTO | NMG

What you need to know:

  • Lalji Meghji Patel & Company asks High Court to allow the dispute to be determined by the arbitrator.

A contractor who was fired by Safaricom’s M-Pesa Foundation Academy midway through construction of its Sh3 billion elite school in Thika has asked the High Court to allow the dispute to be determined by the arbitrator.

Lalji Meghji Patel & Company says an application filed by M-Pesa Foundation Academy is a ploy to delay the case.

M-Pesa Academy last year moved to court seeking stop the arbitrator, Mr Tom Oketch, from presiding over a dispute in which the contractor is demanding Sh143 million for work it did on the school between January 2015 and June 2016.

M-Pesa Academy argued that Lalji waived its right to pursue arbitration after agreeing to settlement talks, and that Mr Oketch’s appointment was irregular as the school was not given a chance to voice its opinion on the decision.

“It is the respondent’s position (Lalji) that continued discussion on amicable settlement was made in good faith and did not waive respondent’s right to arbitration but in compliance with clause the contract,” says Parbat Premji Patel, Lalji’s director in the response.

The High Court in November suspended the arbitral proceedings pending determination of the suit filed by M-Pesa Foundation Academy.

The contractor says the clause on the arbitration is binding to both parties in the dispute and argues that it resorted to that option after talks failed to bear any fruit.

After falling out in June 2016, the school terminated Lalji’s contract. M-Pesa Academy and Lalji did a joint inspection of the works that had been done but could not agree on how much was owed to the contractor.

The school took issue with some of Lalji’s works and ordered the contractor to stop and leave the site, then hired another firm to complete construction and rectify defects.

Following the deadlock, Lalji notified M-Pesa Academy of a dispute to be referred to arbitration.

The two parties could, however, not agree on who to preside over the proceedings.

Lalji then sought the Architectural Association of Kenya’s assistance with the appointment of an arbitrator, which saw Mr Oketch appointed.

In June last year, Mr Oketch dismissed M-Pesa Academy’s objection to the arbitration proceedings prompting the high court suit.

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