The Kenya National Highways Authority(KeNHA) has failed to stop a multi billion shillings worth suit against it for breach of contract.
An engineering and consultancy company AECOM ROA (PTY) Limited has sued the authority for breach of contract for
failing to pay outstanding sum under a contract of USD 316,047,000 and an additional Kshs 5,538,333.40.
It was contracted by the defendant to provide consultancy services for detailed feasibility study, environmental and social-
economic impact studies and detailed engineering upgrade of the Mombasa-Mariakani Road.
The firm claims it successfully provided those services, as per the contract. The amount the Plaintiff has sued for is for the
outstanding amount, not paid by KeNHA and the interest.
KeNHA raised an objection saying the adjudicating court had no jurisdiction and that the firm had failed to “ to invoke, and or exhaust the dispute resolution mechanisms provided under the contract.”
It further objected that plaintiff had breached the special conditions of the contract and that the firm had also failed to comply with statutory requirements on limitation of action contrary to Section 67 of the Roads Act.
KeNHA also pegged on an objection that the plaintiff had filed the case without giving a month’s prior notice and that action may not have commenced against it “until at least one month after written notice containing the particulars of the claim and of intention to commence the action or legal proceedings, has been served upon the Director-General by the Plaintiff or his agent.”
However the company in a rejoinder directed the judges attention to two letters, one October 24 2016 asking the Defendant to settle the contractual amount outstanding, and informing the Defendant that it would seek to recover the amount due by
alternative measures and the other February 9 2017, and stamped as received by the Defendant on the same date , by which letter the Plaintiff requested for payment of amount due.
A judge while dismissing KeNHA said that a such an objection “is raised on the basis that facts pleaded by other party are
“The fact remains that the Plaintiff gave notice 30 days before filing suit, as required under Section 679a) of the Roads Act,”
justice Mary Kasango ruled adding that, “on that basis that ground of objection is hereby dismissed.”
The other ground raised by KeNHA, the judge said, on the existence of arbitration clause in the parties contract.
“ The contract provides for amicable settlement of dispute, within 30 days of the other party’s request to settle, and if not settled in that manner the special condition applies,” she added.
The judge also faulted KeNHA for filing a Memorandum of appearance on August 18 2017 and simultaneously filing the
Preliminary objection, a thing she said is technically flawed.
“ The Defendant filed a defence and Counter-claim and therefore ran foul to the provisions of Section 6 of the Arbitration Act.
“The act act of filing that pleading resulted in the Defendant’s loss of reliance of Section 6 of the Arbitration Act,” the judge said adding that the mix match in KeNHA game plan makes its objection fail.
The judge has also directed that KeNHA pays costs in favour of AECOM.