BY SAM ALFAN.
A company contracted by National Hospital Insurance Fund(NHIF) to provide architectural and consultancy services for the establishment of a Medical Centre of Excellence has lost a Sh1.4 billion claim.
Judges Hannah Okwengu, Kathurima M’Inoti and Sankale Ole Kantai dismissed an appeal by Baseline Architects limited seeking to reverse the striking out of Sh1.4 billion claim by the High Court.
“For the above reasons we come to the conclusion that this is not a matter deserving leave to appeal under section 39 of the Arbitration Act as the applicant has not met the threshold for granting leave to appeal. Accordingly, the application is dismissed with costs,” ruled the appellate judges.
The dispute arose concerning the payment of a sum of Sh.1.8 billion demanded by the company as professional services.
The matter was referred to an Arbitrator who ruled in favour of the Baseline Architects ltd and condemned NHIF to pay the amount which had been offered for consultancy services.
But justice Fred Ochieng (now Court of Appeal judge) overturned the decision, forcing the company to file the appeal.
The company faulted the judge for finding that the provisions of the Public Procurement & Disposal Act 2005 were applicable to the procurement of the applicant’s services.
“The judge erred in law by failing to state and lay a basis for the public policy breach that shocked his conscience, because the fees assessed by the Arbitrator was offered by the respondent to the applicant in writing, no public policy issue was raised before the arbitrator in respect of the amount of fees by relying on the quantum of fees awarded by the arbitrator and linking the same to the starting of construction of the project as matter of public policy that shocked his conscience, the learned judge was importing issues that were never canvassed before the arbitral tribunal, thereby opening up factual findings by the arbitrator against established arbitral jurisprudence in Kenya,” claim the company in the appeal.
NHIF had opposed the application arguing that the company’s claim was predicated on an illegality, the transaction not having adhered to procurement procedures, and the project never took off.
