By Regan Oluoch
The State will pay Sh390 million to a construction company after losing a case to Consulting Engineering Services (India) Private Limited, bringing to a close a 14-year contractual dispute over consultancy work on the Mwache Dam project in Kwale County.
The ruling, delivered by the High Court’s Commercial and Tax Division in Nairobi, affirms the validity of a consultancy agreement awarded on May 31, 2010, when the Ministry responsible for water infrastructure contracted the Indian engineering firm at a value of $4.3 million to undertake detailed design work and prepare tender documents for the flagship dam project.
The contract, which formed the technical backbone of the Mwache Dam development, was later expanded through two addenda. The first, signed in 2012, introduced additional irrigation design works valued at $431,346. A second variation in 2013 incorporated services linked to World Bank financing requirements, adding a further $1.24 million to the scope of work.
According to court documents, the firm completed a viability study in September 2011 and subsequently delivered final technical reports and tender documentation in 2017, forming the basis for the project’s engineering design framework.
However, although 19 invoices were raised under the agreement, the government only settled eight, amounting to roughly half of the contract value. The last payment was made in December 2012, leaving 11 invoices outstanding. Despite prolonged delays and repeated demands for payment, the firm proceeded to complete and submit all required deliverables for the project.
Frustrated by years of non-payment, Consulting Engineering Services (India) Private Limited moved to court in 2021, seeking recovery of Sh390 million for services rendered in one of Kenya’s key coastal water infrastructure projects.
In its defence, the Attorney General’s office challenged the claim, arguing that the procurement process lacked legal validity and that no binding contract existed to obligate the State to pay. “There was no valid procurement process that preceded the execution of the contract,” the Attorney General argued.
The court, however, dismissed this argument, holding that the existence of signed agreements, processed invoices and official correspondence demonstrated that the State had fully acknowledged and implemented the contract. The judge found that government agencies had not only engaged the consultant but had also received and utilised the technical designs for a national flagship project.
In her ruling, Justice Freda Mugambi observed that the government could not benefit from highly technical engineering outputs, integrate them into national infrastructure planning, and later seek administrative technicalities to avoid payment obligations.
The court concluded that the consultancy contract was valid and enforceable, ordering the State to settle the long-standing Sh390 million debt, effectively ending a dispute that has lingered for more than a decade.
