By The Weekly Vision Team
The High Court has dismissed a case in which Cytonn Investment Limited sought a stay in a decision that ordered it to pay Sh 68 million to Crje East Africa Limited for breach of contract. Crje (East Africa) filed a suit in 2023 seeking a judgment on admission in its favour for an admitted sum of Sh 68,881,781.00 together with interest from 25th October 2021 until payment in full.
However, Cytonn opposed and sought the suit be stayed and the dispute between the parties be referred to arbitration. In a ruling delivered by Justice Peter Mutua Mulwa, he noted that East Africa had stated there was no dispute between the parties capable of being referred to arbitration. The court also noted that Cytonn had not specified the dispute and the nature of which it desired to be referred to arbitration, as it had admitted the plaintiff’s claim through a letter dated October 25, 2021, and paid partially.
“In the foregoing, I agree with the plaintiff that there is in fact no dispute to be referred to arbitration and there is no valid reason for the court to stay these proceedings,” the judge ruled. The judge was also in agreement that indeed, the letter was plain, obvious, and unequivocal that the defendant owes the plaintiff Sh 72,881,781.00.
The plaintiff has demonstrated that this has been partly paid (less Sh 4,000,000.00), leaving a balance of Kshs. 68,881,781.00, which it claimed. There are no valid reasons put forth by the defendant why the plaintiff should be denied the sum, he said. “In the foregoing, I make orders that the defendant’s Chamber Summons application dated November 27, 2023, is dismissed. The plaintiff’s Notice of Motion application dated 28th February 2023 is allowed. Judgement on admission be and is hereby entered for the plaintiff against the defendant for the sum of Sh68,881,781.00 together with interest from 25th October 2021 until payment in full”, Justice Mulwa ruled.
The court heard that the parties entered into a contract dated 30th April 2018 for the building and construction of a project known as The Ridge to be erected on the property L.R. NO. 28223/3 Ridgeways, which was a mixed-use development.
On March 15, 2023, East Africa Limited filed the suit, claiming that as the main contractor of the project, and in line with the contract, it engaged third-party companies and individuals to offer various services that were necessary for the completion of the project. It was the East Africa case that on or around 6th December 2018, the project works were suspended owing to Cytonn’s financial challenges and its inability to finance the project at the time. The project was therefore stalled up to or around October 25, 2019, by which time the defendant had managed to get the funding and the project work resumed.
They claimed that due to the interference with the project works, it became necessary for the parties to renegotiate and review some of the contract terms, culminating in an Addendum to the Contract dated 27th January 2020, signed by both parties.
“Phase 1 of the project, which was to be completed on or around the 14th February 2020, was now to be completed on or around the 5th May 2023. And that under Clause 8.9, as read with clause 8.8 of the contract, the plaintiff had the right to claim and be paid for costs arising out of suspension of the works,” the court ruling reads. The company claimed Cytonn breached the contract by failing to settle its claims, despite acknowledging the existence and quantum thereof. As such, Kshs. 68,881,781 being the sum due and owing and special damages for breach of contract.
