M-Pesa Academy Contractor Demands Sh143 Million Owed During Construction

M-Safaricom's M-Pesa Foundation Academy
C.E.O, Safaricom M-PESA Foundation Academy, Les Baillie (second left) takes the President, H.E. Hon. Uhuru Kenyatta, through the Map of the school. This was during the Safaricom MPESA Foundation Launch. With them are other officials

Established to benefit at least 800 bright children from disadvantaged backgrounds with full scholarships, M-PESA Academy was officially opened in October last year.

Construction of the Sh3 billion state of art school on 100-acre piece of land in Thika, saw Lalji Meghji Patel & Company, a building and civil engineering contractors in Kenya contracted for the project.

During the construction of M-Pesa Academy, the contactor fell out with the school in June 2016, who terminated the contract. The school had issues with some of Lalji’s works and ordered the contractor to stop and leave the site, before hiring another firm to pick up from where he had left by rectifying defects and finishing up the construction.

M-Pesa Academy and Lalji did a joint inspection of his construction work and could not settle on how much the school owed him. Lalji sought assistance on the appointment of an arbitrator, through the Architectural Association of Kenya, which saw Mr Tom Oketch appointed.

The arbitrator was to preside over the dispute in which the contractor is demanding Sh143 million for work done in the school between January 2015 and June 2016.

M-Pesa Academy argued that Lalji waived its right to pursue arbitration after giving in to settlement talks and that the they did not air their opinion about the contractor’s appointment of Mr, Oketch. The High Court had suspended the arbitral proceedings pending determination of the suit filed by M-Pesa Foundation Academy, which Lalji terms as a ploy to delay the case.

“It is the respondent’s position (Lalji) that continued discussion on amicable settlement was made in good faith and did not waive respondent’s right to arbitration but in compliance with clause the contract,” says Parbat Premji Patel, Lalji’s director.

Mr Oketch dismissed M-Pesa Academy’s objection to the arbitration proceedings prompting the high court suit.

The contractor asked the High Court to allow the dispute to be determined by the arbitrator saying the clause on the arbitration is binding to both parties in the dispute and argues that it resorted to that option after talks failed.

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