Kenya: The multi-billion shilling standard gauge railway (SGR) project faces another legal hiccup, this time occasioned by a dispute over the clearing of equipment shipped into the country for the construction work.
The new dispute pits the constructor, China Road and Bridges Corporation Kenya (CRBCK), against Urgent Cargo Ltd, the company contracted to do all the clearing work.
And following the dispute, directors of the construction company now risk being punished for allegedly disobeying a temporary court order restraining them from awarding the clearing business to any other company.
In the picture are two other firms – Landmark Port Conveyors and United E.A Warehouses Ltd – that have taken over the clearing of material for the SRG project which has been bedeviled by controversies since last year.
The China construction firm entered into an agreement with Urgent Cargo on August 24, last year, to exclusively provide all the clearing services for equipment and materials shipped in for the project.
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The clearing firm employed more staff and stationed them at the CRBCK offices at the port of Mombasa, specifically to handle the volume of business.
Between August 2014 and January 12, this year, business ran smoothly with each party observing its obligations under the contract.
But Urgent Cargo noted a change of heart in mid January, when the volume of work started diminishing.
On February 21, China Roads wrote to the clearing company instructing them to withdraw their employees from the premises in Mombasa. The constructors wrote again to the company seeking to have the agreement amended.
Upon investigations, Urgent Cargo established that since January 12, 2015, China Roads had been awarding clearing business to two other firms – Landmark Port Conveyors and United E.A Warehouses Ltd – in breach of the contract.
On February 27, they sued China Road at the High Court in Nairobi, and sought to have the company restrained from breaching the agreement.
The court issued a temporary injunction restraining the Chinese firm from breaching the agreement, pending the hearing and determination of the case.
On March 11, the case was moved to April 14 but the same orders were extended.
Urgent Cargo went back to court last week and applied to have the Chinese firm cited for contempt.
The application will be heard on March 25.
