Sh300m plant case drags on

Daily Nation (Kenya) - - SUNDAY REVIEW -

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A pay­ment wran­gle pit­ting the Kenya Bu­reau of Stan­dards and a con­trac­tor who con­structed a Sh300 mil­lion bio-chem­i­cal plant at its head­quar­ters in Nairobi is back in court.

Ap­pel­late judges dealt Kebs a se­vere blow af­ter they re­jected its ob­jec­tion to an ap­peal by Cen­tu­rion En­gi­neers and Builders Ltd chal­leng­ing the set­ting aside of Sh385 mil­lion awarded by an ar­bi­tra­tor for breach of con­tract.

The par­ties en­tered into a con­tract in 2009 where Cen­tu­rion was en­gaged by Kebs to carry out build­ing works for al­ter­ations and ex­ten­sion of its bio­chem­i­cal lab­o­ra­to­ries for Sh80 mil­lion.

Cen­tu­rion and Kebs later var­ied the con­tract to in­clude ad­di­tional work on the plant and both par­ties agreed that upon com­ple­tion, the build­ing would be mea­sured and val­ued by con­sul­tants from the Min­istry of Pub­lic Works and any nec­es­sary vari­a­tions ad­dressed.

The com­pleted work was val­ued at Sh228 mil­lion but in an un­ex­plained turn of events, Kebs de­clined to pay the con­trac­tor and the mat­ter was re­ferred to ar­bi­tra­tion. The ar­bi­tra­tor, Mr Mwangi Gichuiri, on May 5, 2015, awarded Cen­tu­rion Sh385 in full and fi­nal set­tle­ment.

How­ever, Kebs moved to the High Court seek­ing to set aside the award. On De­cem­ber 9, 2016, Jus­tice Tuiyot dis­missed the award cit­ing non-com­pli­ance with Sec­tion 47 of the Pub­lic Pro­cure­ment and As­set Dis­posal Act.

The judge said the vari­a­tion of the con­tract ex­ceeded the per­cent­age limit set out in the Act.

Ag­grieved by the de­ci­sion, Cen­tu­rion moved to the Court of Ap­peal to have Jus­tice Tuiyot's rul­ing re­versed. The con­trac­tor's lawyer's poked holes in the High Court de­ci­sion, say­ing it was er­ro­neous and that it over­looked var­i­ous sec­tions of the law.

“The judge's de­ci­sion failed to take into ac­count the pur­poses and ob­jec­tives of the Pub­lic Pro­cure­ment and Dis­posal Act and ig­nored the pro­ce­dural mech­a­nism in the Act and the wider pub­lic in­ter­est it was in­tended to serve,” stated lawyer Al­fred Nyandieka.

The Court of Ap­peal has now al­lowed Cen­tu­rion lawyers Waweru Gatonye and Mr Nyandieka for to lodge the ap­peal for re­ver­sal of set­ting aside the award within 30 days from Novem­ber 23.

Cen­tu­rion lawyers ar­gued that it would be an un­just en­rich­ment for Kebs to vary a build­ing works con­tract, get the works done, have the lab­o­ra­to­ries com­pleted and then de­cline to pay.

Judges Asike Makhan­dia, Agnes Mur­gor and Otieno Odek con­curred that the ap­peal against the High Court de­ci­sion was mer­ited and al­lowed it to be filed for hear­ing and de­ter­mi­na­tion.

“Cen­tu­rion has iden­ti­fied sev­eral points of law al­legedly fall­ing within the am­bit of gen­eral im­por­tance,” ruled the judges.

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