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KBL gets reprieve in tussle with contractor
Keg beer production line at the EABL plant in Ruaraka, Nairobi on October 9, 2019.
Kenya Breweries Ltd has won a reprieve after the High Court quashed a Sh65.2 million award to a contractor in a botched deal.
Justice Alfred Mabeya set aside the award stating that the taxing officer made an error by basing the fees on an award that was yet to be ascertained.
The brewer contracted Jilk Construction Company Ltd to construct the Sh15 billion factory in Kisumu city in 2017 but the parties fell out and the matter was referred to arbitration.
KBL had submitted that the taxing officer had taxed the bill of costs as if the final award had been granted.
The judge said that had the matter- the dispute pending before an arbitrator- been concluded and a final award made in the arbitration, the taxing officer would have had the necessary basis to use the final award as the subject matter for determining the fees.
“The interlocutory application did not attract any direct monetary value. Therefore, using the disputed amount in the arbitration to calculate the instruction fees would result in unjust enrichment,” said the judge.
Justice Mabeya said that allowing the bill as taxed would mean that if the arbitration is finally determined against KBL, the beer maker would have to be subjected to pay the costs of the arbitration twice.
“To this Court’s mind, that would amount to double jeopardy,” said the judge.
The contractor on its part maintained that the subject matter of the arbitration could be ascertained from the pleadings, a fact that was not disputed and the decision of the taxing officer was, therefore, reasonable.
“Accordingly, I find the application meritorious. The bill of costs ought to be re-taxed and recalculated based on the proper principles. I hereby remit the bill of costs back to the taxing officer for re-taxation,” the judge directed.
The court was informed that the dispute was before a tribunal concerning the scope of work under the contracts and conditions of contracts for building works.
But in the course of the arbitral hearing, a question on the impartiality of the arbitrator and his jurisdiction was raised before the tribunal and the tribunal delivered a ruling dismissing the application.
KBL was dissatisfied with the arbitrator’s ruling but its application was equally dismissed by the High Court with costs.
The contractor then filed a bill of costs based on the ruling seeking payment of Sh120 million, which the taxing officer Mary Osoro granted an award of Sh65.2 million.
The hearing before the arbitrator Mr Mutinda Mutuku has since been stopped after KBL made yet another application after the manufacturer complained about his fairness.