Court blocks sale of Kenya Railways property

June 8, 2012 2:02 pm


The temporary orders, Justice Mabeya said, will remain in force until June 28 when the case will be heard again/FILE
NAIROBI, Kenya, Jun 8 – The High Court has stopped the auctioning of property worth billions of shillings belonging to the Kenya Railways Corporation (KRC) over a dispute with Ederman Properties Limited.

High Court Judge Alfred Mabeya suspended orders obtained by the private firm to attach Kenya Railways property over an alleged breach of contract.

Mabeya varied orders obtained earlier by Ederman Properties attaching the corporation’s property after KRC terminated a Sh26 billion contract it had entered into with the firm for the construction of a Golf City.

The temporary orders, Justice Mabeya said, will remain in force until June 28 when the case will be heard again.

KRC and the Registered Trustees of KRC Staff and the Retirement Benefit Scheme had moved to court through lawyer Cecil Miller contesting the order saying they were obtained in concealment of material facts.

Miller had argued that the orders were highly detrimental and prejudicial to the scheme as it cannot lease or dispose of the same yet it is through such that it can generate income to pay over 11,000 pensioners.

The pensioners payments, the court heard, computes to over Sh56 million.

When the case resumes, the court will hear why the dispute should be referred to arbitration.

Kenya Railways and the scheme want the dispute referred to arbitration in compliance with the law arguing that the High Court is barred by the Arbitration Act from presiding over or determining the parties’ disputes when there is an arbitration agreement consented to by parties.

“The court does not have jurisdiction to preside over and determine the issue presented in light of Section 6 of Arbitration Act,” Miller said.

Ederman Ltd went to court being aggrieved by KRC’s move to terminate its contract following disagreement over terms and contents of the contract document.

The firm on the other hand contends that it submitted a bid and was declared the successful tenderer.


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