Court dismisses Cytonn’s bid to stop Ksh68m order

 The High Court has dismissed a case in which Cytonn Investment Limited sought a stay in a decision that ordered it to pay Ksh68 million to Crje East Africa Limited for breach of contract.

Crje (East Africa) filed a suit in 2023 seeking a judgment on admission in its favour for an admitted sum of Sh68,881,781.00 together with interest from October 25, 2021, until payment in full. However, Cytonn opposed and sought the suit stay and the dispute between the parties be referred to arbitration.

In a ruling delivered by Justice Peter Mutua Mulwa, he noted that East Africa Crje had stated there was no dispute between the parties capable of being referred to arbitration.

The court also noted that Cytonn had not specified the dispute and the nature in which it desired to be referred to arbitration as it had admitted the plaintiff’s claim through a letter dated October 25, 2021, and paid partially.

“In the foregoing, I agree with the plaintiff that there is in fact no dispute to be referred to arbitration and there is no valid reason for the court to stay these proceedings”, the judge ruled.

Unequivocal The judge was also in agreement that indeed, the letter was plain, obvious and unequivocal that the defendant owes the plaintiff Sh72,881,781.00.

The plaintiff has demonstrated that this has been partly paid (less Sh4,000,000.00) leaving a balance of Sh68,881,781.00 which it claimed. There are no valid reasons put forth by the defendant why the plaintiff should be denied the sum, he said.

“In the foregoing, I make orders that the Court dismisses Cytonn bid to stop Sh68m order House developer had opposed a breach of contract ruling of October 2021 that wanted it pay plaintiff Sh68m defendant’s Chamber Summons application dated November 27, 2023 is dismissed.

2.The plaintiff’s Notice of Motion application dated February 28, 2023 is allowed. Judgment on admission be and is hereby entered for the plaintiff against the defendant for the sum of Sh68,881,781.00 together with interest from October 25, 2021 until payment in full”, Justice Mulwa ruled.

Project construction The court heard that the parties entered into a contract dated April 30, 2018 for the building and construction of a project known as The Ridge to be erected on the property L.R. NO. 28223/3 Ridgeways, which was a mixed-use development.

On March 15, 2023, East Africa Limited filed the suit claiming that as the main contractor of the project, and in line with the contract, it engaged third party companies and individuals to offer various services that were necessary for the completion of the project.

It was East Africa case that on or around December 6, 2018, the project works were suspended owing to the Cytonn’s financial challenges and its inability to finance the project at the time.

The project was, therefore, stalled up to or around 25th October 2019, by which time the defendant had managed to get the funding and the project works resumed.

They claimed that due to the interference with the project works, it became necessary for the parties to renegotiate and review some of the contract terms, culminating to an Addendum to the Contract dated January 27, 2020, signed by both parties.

“Phase 1 of the project which was to be completed on or around the 14th February 2020 was now to be completed on or around May 5, 2023. And that under Clause 8.9 as read with clause 8.8 of the Contract, the plaintiff had the right to claim and be paid for costs arising out of the suspension of the works”, the court ruling reads.

The company claimed Cytonn breached the contract in failing to settle its claims, despite acknowledging the existence and quantum thereof.