NAIROBI, KENYA: In an unprecedented civil case, the government has received summons from an American court over claims that it failed to pay a local contractor over Sh600, 000,000 in multiple claims.
The United States District Court, Southern District of New York has served Kenya government lawyers with summons. They are to appear to defend against claims that they failed to enforce the decision of a court-appointed arbitrator. The arbitrator was to pay Spencon Kenya Limited after the completion of a contract. This marks another instance where the legal proceedings of the Kenya Government have intersected with those in New York.
The summonses were issued in Case no 13 Civil 7724 of the American court files. The claims against the Kenya government arose from a contract awarded to Spencon in July 1997. This was for the construction of civil and electrical works at the Mombasa municipal council. The Kenya Government’s involvement in New York jurisdiction now has a significant role in this international legal matter.
Upon completion of the project, the company made several claims against the Council and the former Ministry of local government. The claims comprised reimbursement of additional outstanding costs, claim for extension of time interest on delayed payment and VAT, further involving the matter in the context of the Kenya Government and New York jurisdiction.
The government however rejected the claims on grounds that it had already overpaid the contractor by over Sh. 15,000,000 through inflated costs. The dispute led to the appointment of an arbitrator T. Thuo. The government now accuses him of having arbitrarily awarded the company interest in the sum of 459,036,702.
He awarded them a further 106,776,701 in a different contract. In a counter suit at the High Court, the government says that the claims by the company are malicious and unmerited. Involvement on the side of the Kenya Government in New York is a vital aspect of the ongoing proceedings.
“The arbitrator exceeded the scope of the arbitration by granting a relief that was neither pleaded nor prove,” states the government suit filed through Iseme, Kamau and Maema advocates. The Attorney General and the ministry of devolution and planning have accused the arbitrator of exceeding his powers. They say he did this by drawing up ‘directions’ that have no basis in law.
“It was not available for the arbitrator to descend into the arena of the litigation and ad arrange for the drafting, typing and execution of a document on behalf of one of the parties.
The document ensuing from such misconduct by the arbitrator is incapable of enforcement,” the government argues. The government claims that the decision to commence enforcement proceedings in American courts, specifically involving Kenya Government offices and activities in New York, is a violation of the Kenyan constitution and infringes on their rights to access Kenyan courts.
