Varsity loses bid to stop paying contractor
Posted Monday, August 6 2012 at 23:30
A university has lost a bid to stop a contractor from demanding payment for work done.
Mr Justice Eric Ogola of the High Court at Milimani ordered the Presbyterian University of East Africa (PUEA) to instead seek arbitration with Elsek and Elsek on how to settle the Sh226 million it owes.
The university had applied to the court to stop the firm from claiming payment and to restrain it from interfering with its buildings until the application was heard and determined.
PUEA said it entered into various agreements for construction work for lecture halls and laboratories.
It said the contractor failed to meet some of the obligations and breached more than 20 terms and conditions.
It said when asked to rectify the problems, the company instead raised extraneous issues not in the agreement, hence the decision to withhold payments.
But in his ruling, Justice Ogola said the university had not given sufficient evidence of the alleged breaches.
He further noted that the university was also in breach of some obligations as it issued postdated cheques to Elsek and Elsek which could not be honoured as the signatories had changed.
“In the circumstances, it only means that the plaintiff has not yet honoured its financial obligations to the defendant. In this regard, the plaintiff is not entirely honest and clearly a court of equity which this is, would expect the plaintiff’s hands to be clean,” the judge noted.
PUEA had claimed that the contractor had threatened to demolish buildings thus interfering with the studies of the students, but in the ruling, the court noted that the alleged interference had not been demonstrated.
“There is no evidence of the alleged interference. The plaintiff is just being apprehensive,” the judge noted.
On the issue of payments, Justice Ogola said that the university had not established that they had made any payments to the contractors.