Relief for local sub-contractor as court restrains Chinese firm

A Kenyan sub-contractor has sued a Chinese construction firm over refusal to pay a debt of Sh45 million for construction services. Tuk Chilo Ltd has sued China Road and Bridge Corporation (CRBC) claiming the Chinese firm failed to honour its obligation to pay them after completing projects relating to construction and upgrading of roads in various informal settlements.

The local firm claims the Chinese construction firm is in the process of winding up its operations in Kenya to relocate back to China any time soon and therefore they would suffer irreparable loss if not paid their debt.

High Court Judge Alfred Mabeya restrained the Chinese firm from selling, leasing or moving their equipment from Kenya pending the hearing of the suit.

Outstanding balance

“An order is hereby issued restraining the respondent from selling, leasing or moving their equipment from the jurisdiction of the court pending the hearing and determination of the application,” read the order. In their suit papers, the local firm claims failure by the Chinese firm to pay the outstanding balance is putting them at risk of having their properties auctioned.

The contract was entered on July 12, 2021. The contract was for the construction and upgrading of roads in various informal settlements and densely populated areas within Nairobi County.

Tuk Chilo has told the court they performed their part of the contractual obligation and handed over completed projects to the satisfaction of CRBC.

“Upon the execution of the contract, the firm was issued with a certificate of completion (the protocol of final account for completed projects) dated 28 February 2022 which they acknowledged on 15 March 2022,” says Tuk Chilo’ Managing Director Felix Otieno Odoyo in court documents. 

When the Chinese firm was issued with invoices upon successful completion of the projects, it paid part of the monies but allegedly refused to pay the balance of Sh44.39 million.

“We outsourced finances to perform our obligations in respect of the contract dated 12 July 2021and now under pressure by the financiers who threaten to auction our property as a result of China bridge failure to pay them,” Tuk Chilo claims in court documents.

Tuk maintains that they have held several meetings with the CRBC deliberating on the outstanding payments but they have exhibited laxity in settling the same. The Sh45 million was due sometime on February 28, 2022 but despite several reminders/demands, CRBC has ‘adamantly ignored and/or declined to settle the same’.

Irreparable loss

“The outstanding amount is substantial hence our business and operations has suffered irreparable loss and damages as a result of CBRC’s breach of its contractual obligation.” “Despite demand and notice of intention to sue having been issued, CRBC has failed, refused and ignored to pay the outstanding balance thus rendering this suit absolute necessity,” says the local firm in court documents.

When the matter came up for further directions before Justice Mabeya yesterday, the order was extended and matter listed for June 7.