Roads agency ordered not to release Sh173m
in city project dispute

The High Court has ordered the Director General of Kenya Urban Roads Authority (KURA) to withhold Sh173.8 million due to a Chinese firm meant for the construction of 9.8km Ngong Road in Nairobi.

Justice Alfred Mabeya of Commercial Division ruled that it would be proper to preserve the money pending the outcome of an arbitration between the Chinese firm China Qingjian International Group and Enzyne Creations Limited which it had subcontracted.

The Chinese construction company had sub-contracted Enzyne Creations Limited for provision of various services and construction materials with regard to the construction of 9.8km road in Karen area.

The dispute arose between the parties after the Chinese road construction and engineering firm failed to pay the local company Sh173,801,105.69. The tender had been awarded by KURA.

According to Enzyne Creations, the matter was referred to arbitration to determine the dispute but the Chinese firm did not cooperate with the process of arbitration.

Total loss

The Kenyan firm moved to court to preserve any arbitral award that may be awarded in the dispute between itself and the Chinese firm.

It argued that China Qingjian Internal Group was a Chinese company and it did not know any of its assets, the location or its directors and any contracts they are involved in at the moment.

“Unless the amount sought in the arbitration is preserved Enzyne Creations would suffer a total loss of the award and the arbitration shall have been in vain,” argued the local firm in court documents.

But the Chinese firm opposed the suit, claiming that a director of its firm colluded with the local staff including the directors of the Enzyne Creations to embezzle funds from the firm.

“The mismanagement of the respondent (China Qingjian Internal Group) between 2020 -2021 had led to major losses including the dualling of 9.8 kilometres Municipal Road along Ngong Road tender,” argued the Chinese firm.

It argued that the delayed payment by KURA had made it difficult for it to settle its suppliers and subcontractors, who currently have judgments against the firm.

KURA also opposed the suit claiming that the local firm’s application sought to attach, in disguise of a preservation order, an amount that is unverified, uncertified, and unascertained.

Justice Mabeya, however, noted that the dispute arising between the parties would be determined through arbitration and that, although the Chinese firm is registered locally, it is Chinese owned and has no known assets in Kenya.