The High Court of Kenya has recently dismissed an application made by the Kenya National Highways Authority (KeNHA) to prevent SBI International Holdings AG from enforcing an award of Ksh1.8 billion (approximately $17 million). The award had been granted to the contractor two years ago.
According to the Business Daily, SBI International Holdings AG had initiated the legal action seeking to enforce a decision made by the Dispute Adjudication Board (DAB) on June 4, 2021.
However, KeNHA opposed the enforcement, arguing that the matter should be referred to arbitration as stipulated in the contract’s terms.
Justice Mwita, presiding over the case, ruled that a thorough interpretation of the agreement’s clauses validated the DAB’s decision and mandated its enforcement.
He stated that the decisions of the DAB, while not final, impose a positive obligation on the paying party to promptly comply with the decision, making it immediately enforceable for the benefit of the successful party.
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The dispute in question originated from a contract related to the rehabilitation of the Kericho-Nyamasaria (A1/B1) Road on February 8, 2010. The DAB ruled in favor of SBI International on June 4, 2021, granting $4,887,199 (approximately Ksh698.3 million) and an additional Ksh1.07 billion (approximately $10 million).
However, KeNHA refused to honor the payment, leading SBI International to seek enforcement through the court. KeNHA objected to the enforcement of the award, arguing that the court lacked jurisdiction to decide the matter.
They claimed that, since they had already issued a notice of dissatisfaction and expressed their intention to initiate arbitration following the DAB’s decision, the case should be suspended and referred to arbitration.
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Despite KeNHA’s objections, the High Court upheld the validity of the DAB’s decision and dismissed the application, allowing SBI International to proceed with enforcing the Ksh1.8 billion million award. The ruling marks a significant development in the ongoing dispute between the contractor and the State agency.
