The High Court of Kenya has ordered the government to pay Ksh39 million to Parbat Siyani Construction Limited for unlawfully terminating a contract. The contract was for the provision and installation of a prefabricated exhibition centre at the Kenyatta International Convention Centre (KICC) grounds.
While delivering a ruling on Thursday, March 13, Justice Lawrence Mugambi accused the government of using delaying tactics and failing to sign the award within the stipulated time.
Mugambi ruled that the government’s conduct was in violation of the Constitution.
“There was no transparency and accountability on the part of the respondents. Public bodies must not be allowed to abuse their powers,” the judge ruled.
Court Orders Govt to Pay Company Ksh 39M for Terminating KICC Contract
At the same time, Justice Mugambi criticized KICC’s management for failing to respond to the contractor’s letters, stating that their conduct lacked transparency.
“In my view, the respondents employed delaying tactics. Their actions were not in accordance with the principles of procurement as set out in the Constitution,” the judge ruled.
The government, through its legal representatives, requested the court to stay the execution of the judgment, arguing that the funds would come from public coffers and that they intended to appeal.
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The court stayed the decision for 28 days to allow the government to review and appeal the ruling.
The case stems from when Parbat Siyani Construction Limited was awarded a contract in 2019, only for the government to terminate it in its final stages of formalisation.
Ksh 800M Court Battle
The company accused KICC management of cancelling the contract, worth Ksh 779 million, without providing justifiable reasons, which it argued was a violation of the constitution.
On the other hand, KICC sought to have the case dismissed, arguing that no formal contract had been signed, and therefore, the construction company had no legitimate claim.
The company explained that the tender was announced in December 2018, and it was officially notified of the award in April 2019 at a price of Ksh 799 million, inclusive of all taxes.
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Parbat Siyani accepted the award, visited the site, and began negotiations on the proposed designs. The tender validity period was 180 days.
However, more than a year later, the firm was informed in April 2020 that the contract had been cancelled due to circumstances beyond KICC’s control.
Additionally, the company wanted to be paid Ksh339 million as compensation for the steps it had undertaken towards the implementation of the project.
It noted that KICC’s decision was in breach of the contractor’s right to fair administrative action and legitimate expectation that KICC would formalise the contract as required under Sections 134 and 135 of the Public Procurement and Asset Disposal Act, 2015.
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