KICC and contractor in Sh800m court battle
A contractor and the Kenyatta International Convention Centre (KICC) are embroiled in a court tussle over the latter’s decision to cancel an award of a Sh800 million contract for the installation of prefabricated conference rooms.
Parbat Siyani Construction Limited says it had been awarded the contract on April 5, 2019, for Sh799,015,957, but the deal was terminated at the final stages of formalisation.
It wants to be paid Sh339 million as compensation for the steps it had undertaken towards the implementation of the project.
On May 27, 2019, the company was invited for a formal contract signing after negotiations and presentation of the proposed design but no formal contract was signed.
The tender validity period was 180 days. It involved the installation of the prefabricated exhibition and conference rooms at KICC grounds.
More than one year later, on April 8, 2020, KICC wrote to the contractor informing it that due to circumstances beyond their control, they were not in a position to continue the undertaking of the project.
The company was aggrieved by the KICC’s “decision to arbitrarily terminate the tender award without providing justifiable reasons” and has since sued seeking compensation.
It wants KICC to be ordered to pay the sum of Sh339,295,223 as compensation for steps commenced toward the implementation of the contract. It says it expended a significant amount of money.
The company says 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.
It secured the first win after Justice Anthony Mrima rejected a request by KICC to throw out the petition over alleged lack of jurisdiction and the company ought to have filed its claim before the Public Procurement Administrative Review Board.
KICC stated that “due process, laws, and regulations as set out in the Public Procurement and Asset Disposal Act, 2015 were followed in procuring and eventual cancellation of the proposed tender”.
It pleaded that the events leading to the legal dispute were based on the proposed tender and the process of procurement was followed, hence the court should invoke the doctrine of constitutional avoidance.
KICC further argued that the contractor had not disclosed why it took so long to bring file the petition in court from the date of award of tender.
But Justice Mrima rejected the arguments and ruled that the principle of constitutional avoidance or the doctrine of exhaustion was not applicable in the case.
This is because the Review Board does not have powers related to the grant of award of damages or grant of compensation for constitutional violations.
He added that there were defined constitutional issues for determination in the petition.