The Kenyan government has been directed to pay Parbat Siyani Construction Limited over Ksh.39 million after the High Court ruled that the termination of a contract for a prefabricated exhibition centre at the Kenyatta International Convention Centre (KICC) was unlawful.
Justice Lawrence Mugambi, who delivered the ruling, faulted the government for employing delaying tactics and failing to sign the award within the required timeframe. He stated that the actions of the state were unconstitutional and lacked transparency and accountability.
“There was no transparency and accountability on the part of the respondents. Public bodies must not be allowed to abuse their powers,” Justice Mugambi ruled.
Despite the ruling, the court has granted the government a 28-day stay of execution, allowing it time to review and file an appeal. The government, through its legal representatives, argued that the funds would be drawn from public coffers and should not be paid out before exhausting all legal options.
Parbat Siyani Construction Limited had initially been awarded the contract in 2019, but the government terminated the agreement in its final stages. The company then moved to court, seeking Ksh.339 million in compensation, citing massive financial losses incurred in preparation for the project.
Justice Mugambi criticized the management of KICC for failing to respond to the contractor’s letters, further noting that their conduct was inconsistent with constitutional procurement guidelines.
“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,” he said.
The ruling underscores the government’s obligation to uphold fair contractual practices and ensure accountability in public procurement. The case also highlights the legal risks involved when state agencies fail to honor contractual agreements.
With the government indicating its intent to appeal, it remains to be seen whether the decision will be upheld or overturned in the higher courts. However, the judgment serves as a warning against unjust contract terminations and the potential financial repercussions that may follow.
