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KeNHA gets nod to fight Sh201m contractor payment order
A road under construction. KeNHA has been allowed to appeal a court order requiring it to pay Sh201 million to an Israeli contractor over disputed road works.
The Kenya National Highways Authority (KeNHA) has been allowed to challenge a decision directing it to pay Sh201 million to an Israeli construction firm.
A judge of the Court of Appeal said SBI International Holdings (Kenya) had not demonstrated that it would suffer “weighty, infirming or uncompensable” prejudice if KeNHA is allowed to appeal against the decision.
The Sh201 million is one of multiple claims from the construction firm that the roads agency has been contesting.
KeNHA submitted that it did not appeal against the decision made in March last year because it became aware of the ruling after the period within which it was required to file an appeal had lapsed.
The agency expressed apprehension that it would suffer substantial financial loss and irreparable damage if the order was not granted, particularly since the judgment involved payment out of public funds.
“In the end, I allow the notice of motion dated May 30, 2025. The applicant shall, within 14 days hereof, file and serve a notice of appeal and, within 45 days of such filing and service, file and serve the record of appeal,” said the court in a ruling on January 30. The deputy registrar of the High Court had directed KeNHA to pay the amount on March 21, 2025, plus interest, to SBI International Holdings.
The State agency said it was dissatisfied with the decision and intended to appeal the entire ruling.
Gilad Mishni, the managing director of the construction firm, opposed the application, saying KeNHA was served with court documents but failed to file its defence within 14 days as required, forcing the court to enter judgment in favour of SBI International Holdings.
Further, the agency’s application to refer the matter to arbitration was also dismissed by the High Court in October 2024. The construction firm argued that KeNHA would not suffer prejudice, as the underlying dispute involved a “pay now, argue later” framework for completed road works.
Mr Mishni said settlement of a lawful judgment does not constitute a loss of public funds but rather protection of the fundamental right to access justice.
The court noted that KeNHA’s contention that the ruling was delivered in its absence was not challenged by SBI International. “Since there is no evidence of service of the notice, what the applicant asserts is believable,” said the court.
The court said that although the application was brought about 56 days late, the delay was, in its view, not overly inordinate and was excusable given the explanation provided by KeNHA.
The contractor has been seeking payment from KeNHA, including enforcement of a decision of the Disputes Board issued in April 2019, awarding it Sh1.3 billion following termination of the agreement for the dualling of Kisumu Boys Roundabout–Mamboleo Junction.
The contractor abandoned works on the eight-kilometre dual carriage in December 2018, citing unpaid arrears and delayed completion. There was also another decision directing KeNHA to pay Sh536 million.
