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Economy

Chinese firm claims houses in Suraya pay row

 Fourways Junction estate
The Fourways Junction estate in Kiambu County. Suraya denies entering into a house-for pay deal with the Chinese contractor. PHOTO | SALATON NJAU 

A dispute in which a Chinese contractor is seeking to possess 10 houses in phase one of the Fourways Junction is set for hearing in March.

China Wu-Yi claims it struck a deal with real estate firm Suraya Property Group and Muga Developers, which own the project’s land, that it would be given the houses as part payment for its services in the Sh1.76 billion project on Kiambu Road.

In its court papers, however, Suraya Property has denied the claims stating that even if there was a deal to that effect, the property is charged to Equity Bank #ticker:EQTY, which granted the Sh1.76 billion cash for the project.

Fourways Junction is located some 500 metres from the leafy Runda Estate in Nairobi and overlooks the Northern bypass.

In a ruling last month, Justice Francis Tuiyott directed China Wu-Yi to serve Equity Bank with the court documents adding that the lender was also free to join the case as an interested party.

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In the ruling, justice Tuiyott said the injunction sought by China Wu-Yi cannot be fairly and fully adjudicated without the involvement of Muga Developers and Equity Bank.

China Wu-Yi said in the suit papers that Suraya advertised in a newspaper in March 2009, a tender for the construction of Fourways Junction, phase I. The Chinese firm said it completed the job.

As at August 2011, the pending certificates had accumulated an outstanding sum of Sh166 million. The parties allegedly engaged in talks and it was proposed that the developer pays Sh30 million for bill of quantities, a further Sh57 million was to be paid in cash after the houses were sold and the balance of Sh79 million was to be repaid by transferring four hibiscus villas and two tulip apartment units to the construction company.

With more negotiations, the payment plan was revised such that instead of selling some of its houses to raise Sh57 million, China Wu-Yi would instead be given more houses instead of the cash. The deal entailed three more hibiscus villas and one tulip apartment to make it seven hibiscus villas and three tulip apartments.

The construction company, however said the real estate company failed to honour the deal, only handed to it four villas and refused to transfer the title of all the house as agreed.

And during routine checks, the company said it met a buyer who said he was in the process of purchasing one of the houses they had agreed, should be transferred to it.

“The plaintiff is further apprehensive that the defendant may issue title to the houses to unsuspecting third party purchasers,” Mr Wu Yun, the project manager said in an affidavit.

He wants the court to compel the developer to honour its obligations including the amount due of Sh73.7 million and transfer the houses as agreed.

Mr Peter Muraya, a director of Suraya said the advertisement was placed by Plence Architects Ltd, a different legal entity. He said Suraya could not unilaterally make a decision to give or transfer the houses to the construction company because the property is charged to Equity Bank.

The arrangement, he said, is void and cannot be enforced without involving the bank. He further denied breaching any agreement.

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