How Moi men’s firm won Sh510m from govt

The company at the centre of a Sh510 million suit against the government at the International Court of Arbitration is linked to two former aides of former President Daniel arap Moi, the Sunday Nation has established.

The two aides nominated two principals, a brother of one of them and an Asian, to look after their interests in Nairobi while they served in the retired president’s administration.

Inspection and Control Services Limited (ICS) and Swipco, SA are seeking $6.9 million (Sh510 million) for breach of contract for pre-shipment inspection.

The firm, which now includes both companies, obtained ex parte orders to freeze an account entitled “Kenya Government account” at the Crown Agents Bank in London used to pay pensioners in Britain. It is reported to be threatening to seize the Kenyan High Commission in London to put pressure on the government to pay up.

But Foreign Affairs permanent secretary Thuita Mwangi denied such a threat exists, saying the mission is protected under international protocols. The registered offices of Swipco, according to documents filed at the registrar of companies, are Lausanne in Switzerland. It was not possible to establish whether ICS is incorporated in Kenya as there is no file at Sheria House.

When Swipco was first incorporated in Kenya in November of 1993, its offices were on the second floor of Nanak House on Kimathi Street. But when Swipco was taken over by ICS, the combined firm’s offices were at Nation Centre.

The documents to incorporate the company in Kenya were submitted by the law firm of Hamilton, Harris and Matthews on November 17, 1993. The directors of the Swiss firm were listed as Philippe Jaccard (chairman), Enrique Segura (general manager) and Jean-Claude Roch (member). ICS has a website but there is little information on Swipco, which it absorbed in 2000.

The two Moi aides fell out after the former President retired in 2002 and the companies relocated to Uganda. Before the fallout the two had sought payment of about $1 million from the government for pre-shipment inspection.

The Finance ministry, through the customs department, Swipco and ICS, had entered into a contract for consultancy services on pre-shipment inspection. But when the company presented its invoices for the services rendered, the ministry queried them and stopped payments.

Breach of contract

The Swiss firm invoked the arbitration clause in the contract and submitted a request for arbitration to the International Chamber of Commerce’s International Court of Arbitration alleging breach of contract by the ministry of Finance and demanding payment of $6.9 million in unpaid invoices.

The ICC, under the rules of arbitration, appointed a tribunal, and Attorney-General Amos Wako represented the government. Nairobi lawyer Fred Ojiambo was the expert witness for the Swiss firm. Prof Githu Muigai appeared for the Treasury. Mr Ojiambo appeared for one of the parties in the Anglo Leasing deal involving tamper-proof passports. He is also a partner at Hamilton, Harris and Matthews.

According to Finance secretary Mutua Kilaka, the tribunal ruled in favour of ICS and Swipco on September 4, 2008. The AG advised the government to pay. “The ruling also came in the middle of our budget, and we promised to put it in our next budget,” Mr Kilaka said. But he said on October 23, 2009 ICS obtained orders freezing one account at the Crown Agents Bank in London.

“The Ministry of Finance has instructed the AG to seek indulgence of the claimants with a view to resolving the matter within the current budgetary constraints,” Mr Kilaka said, adding while the government was looking for a reprieve, Crown Agents Bank has also moved to the High Court of Justice to challenge the manner in which the applicants obtained the ex parte order. Mr Kilaka said the frozen account was used by the Kenya Government to pay its pensioners in Britain.