High Court drops injunction blocking the sale of houses

A judge on Tuesday rejected an undertaking by a Chinese constructor seeking Sh350 million from Erdemann Property Group, which is involved in the development of housing projects in Mlolongo along Mombasa Road.

Mr Justice Daniel Musinga said the undertaking by Liu Hui on behalf of China Wu Yi Company could not stand because he had not been authorised by the company.

Hui is described in court papers as the overall overseer of the company’s operations in Kenya.

Consequently, the judge discharged an injunction granted last week, blocking the sale of the housing units in Mlolongo by Erdemann.

China Wu Yi is accusing Erdemann of refusing to clear its debt after completing the construction of the housing units.

China Wu Yi alleges that it was contracted by Erdemann in July 2008 to build several apartments along Beijing Road in Mavoko Municipality.

The housing project is known as Great Wall Apartments.

The project funded by China Development Bank for Sh920 million was to last for 56 weeks.

According to the agreement, the loan was to be disbursed on a monthly basis to cater for monthly certificate payments.

Development Bank of Kenya was also to fund part of the project.

A supplementary agreement was later signed between the two companies allowing China Wu Yi to access credit of Sh171 million secured by 90 units.

Through lawyer Waweru Gatonye, China Wu Yi says the companies signed an additional supplementary agreement that inflated the final settlement amount of the project to Sh1.03 billion.

China Wu Yi told the court that Erdemann declined to pay the money, forcing them to obtain temporary court orders barring Erdemann from disposing of the remaining housing units and several parcels in Mavoko, Kiambu and Nairobi.

But on Tuesday, Erdemann, through lawyer Gichuki King’ara, said it had paid the entire amount owed to the contractor, adding that China Wu Yi had failed to show evidence of failure by the investor to pay for the services.

Erdemann is separately seeking Sh26 billion in another dispute with Kenya Railways Corporation (KR) and trustees of the Kenya Railways Staff Retirement Benefit Scheme for breach of contract over a proposed Sh40 billion golf city project in Nairobi.

The investor claims it won the 2009 tender to convert the current Railways Club golf course along Haile Selassie Avenue and Uhuru Highway into a golf city with a five-star hotel on a 63-acre piece of land.