Economy

KeNHA bid to block Israeli contractor’s Sh1.3bn suit flops

KsmROAD

A section of the stalled Kisumu Boys Roundabout –Mamboleo road. FILE PHOTO | NMG

Summary

  • The High Court has declined a request by KeNHA to suspend proceedings of five cases filed by an Israeli contractor seeking to be paid Sh1.3 billion following termination of contracts for road construction.
  • KENHA also wanted to be granted permission to file its defense out of time.

The High Court has declined a request by the Kenya National Highways Authority (KeNHA) to suspend proceedings of five cases filed by an Israeli contractor seeking to be paid Sh1.3 billion following termination of contracts for road construction.

KENHA also wanted to be granted permission to file its defense out of time.

The cases were lodged by SBI International Holdings (Kenya) seeking enforcement of an arbitration award made by the Dispute Adjudication Board (DB) in relation to various contracts including the one for dualling of Kisumu Boys Roundabout – Mamboleo Junction.

But Justice John Mativo dismissed the application saying it was unmerited. He said KeNHA did not demonstrate that it has a plausible defence.

The judge noted that the dispute relate to a contract which had an arbitration clause.

He said the decision of the Dispute Adjudication Board (DB) dated July 10, 2020 directing KeNHA to pay the contractor the Sh1.3 billion is binding.

The Israeli contractor moved to court seeking enforcement of the DB decision rendered by adjudicator, John Papworth of Shapwick, England on July 10, 2020, directing KeNHA to pay the amounts within 14 days of the decision of DB.

"To the extent that these proceedings seek to enforce the DB decision, this court cannot intervene except in situations contemplated by section 10 of the (Arbitration) Act," said the judge.

The decisions of the DB have never been set aside, either by amicable settlement or by arbitration, so the decisions are enforceable and contractually binding upon KeNHA, judge Mativo stated.

KeNHA through its senior legal officer Nathaniel Chisenga Munga said the money will be paid from taxpayer’s coffers and that the omission to file the defence was not due to negligence.

Mr Munga said the delays was caused by technicalities and technological advancements at the Judiciary's e-filing platform.