Epco Builders is seeking to quash an arbitrator’s ruling that denied the developer the right to increase prices of the housing units above the cost indicated in the initial sale agreements.
A real estate firm has renewed its fight against 312 employees of national carrier Kenya Airways (KQ) over a Sh2.5 billion housing scheme.
Epco Builders has moved to the High Court seeking to quash an arbitrator’s ruling that denied the developer the right to increase prices of the housing units above the cost indicated in the initial sale agreements.
The developer was initially to sell the houses to KQ staff at Sh2.675 million each for two-bedroom units and Sh3.925 million for the three-bedroom units.
But the company now wants to be allowed to increase the cost by Sh575,000 for each of the two-bedroom units and Sh825,000 for each of the three-bedroom units, citing delays in completion of the project.
The firm holds that conciliator Martin Munyu went out of his scope in ordering Epco to retain the original selling price of the housing units.
Mr Munyu in his ruling held that the 312 employees were not part of a suit that Epco filed against KQ-- which delayed the construction-- hence could not be forced to suffer consequences of the case through an increase in pricing.
Epco has also challenged the manner in which Mr Munyu was appointed as an arbiter. But the KQ employees hold that Epco has filed the application outside the time provided for by law, as they did not raise the issue within 15 days of Mr Munyu’s appointment or even at the mediation hearings.
“The proceedings before the arbitrator proceeded with both parties participating fully, culminating in the issuance of an award.
‘‘Throughout the proceedings, the applicant never raised any dissatisfaction with the manner in which the arbitration was conducted. It is therefore dishonest for Epco to challenge the award of the arbitrator,” argues Nelson Ashitiva in court documents.
Epco also hired Tej Architects as the project’s designers, Geomax Consulting Engineers and Mathu & Gichuiri to build the housing estate.
The 312 KQ employees paid a 10 per cent deposit on the purchase price to finance purchase of the land from KQ, after which Epco used the same property to secure loans to cater for construction.
KQ sold land for the project to Epco for Sh100 million, but the developer says it incurred extra costs due to the national carrier’s delay in effecting transfer of the property.
The contractor says that it was given possession of the land in September 2011, and yet the agreement was that construction was to start in October 2009 and be completed by September 2011.
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