A Chinese firm has convinced the Court of Appeal to suspend the payment of Sh84 million to a local company over breach of contract in the construction of Sh82 billion Thwake Dam in the lower eastern.
A bench of three judges of the appellate court agreed with China Gezhouba group that payment of the said money would ideally render the appeal nugatory. The local firm successfully sued the Chinese contractor for breach of contract and the latter was directed to pay Sh683 million.
After pleading to have the decision suspended pending appeal, Justice Alfred Mabeya directed China Gezhouba to pay Sh84 million to be granted conditional stay. The firm rushed to the Court of Appeal, stating that it is doubtful whether the money, once paid, will be refunded in case its appeal is successful.
“We also note that the 1st respondent (JTG Enterprises ltd) has not demonstrated that it will be able to refund the monies if paid, given the fact that the same is colossal,” Justices Asike-Makhandia, Kathurima M’Inoti and Mumbi Ngugi said.
The judges said the submission by China Gezhouba was not sufficiently countered by the sub-contractor.
The local firm was contracted to do excavation and support for the main spillway project, for the dam in Makueni and Kitui counties.
Justice Mabeya ruled that the contractor failed to make payments for the works as were on site and as agreed in the sub-contract supplementary agreements, and in the process breached the contract.
The High Court judge said the Chinese firm admitted that the rock classification as contained in the original bill of quantities, on which the sub-contract was based, did not match the actual site position.
The court was informed that the sub-contractor was contracted to do excavation, protection and support of the main spillway.
The terms of the contract were fixed unit price and payments were dependent on the nature of excavated materials.
The multi-billion-shilling Thwake Dam project was financed by a loan from the African Development Bank and the government through budgetary allocations to the Ministry of Water.
However, the sub-contractor said upon commencement of the works, it noted that quantities of topographic soil layers as provided by the contractor did not correspond with the actual and practical conditions on the ground.
In the intended appeal, the Chinese firm said the trial court failed to appreciate the fact that the payment of the sub-contract to JTG Enterprises Ltd was governed by the express provisions of the sub-contract and the main contract.
Further, the court heard that the judge failed to appreciate the fact that under the said sub-contract, the monies due to the sub-contractor were only payable after receiving payment from the Ministry of Water, Sanitation and Irrigation.
