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The Nairobian

Telkom Kenya in court over Sh1.7b tender cancellation

Business

By Kamau Muthoni | Jan 11, 2016

Telkom Kenya has denied that it cancelled a Sh1.7 billion tender and forced a Kenyan firm affiliated to China's ZTE Corporation to employ a project manager who is at the centre of the dispute before the High Court.

The telecommunication company now says that Apex Vision Ltd, which had won a tender to maintain the former's equipment, submitted a curriculum vitae belonging to an Iranian a Mr Vahagn. The agreement between the two companies (Telkom and Apex) went sour over the hiring of the project manager.

Apex, in its court documents claimed that Orange's Chief Technical and Information Officer, Jean Marie Garcia, had fronted Vahagn but Telkom held that there were no underhand dealings when selecting the best candidate. "They were under no obligation to include Mr Vahagn's CV among those provided," Telkom's legal officer Robert Irungu said in his court papers. Mr Irungu argued that Apex was at liberty to select their preferred expert and further denied that the Chinese firm was forced to employ him.

The legal officer also denied that Telkom Kenya had cancelled the tender, saying that Apex was just abusing the court's time. The equipment maintenance tender was advertised last year and after considering the bids, Telkom signed a deal with Apex Vision.

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According to court documents filed on November 17 by Apex's lawyer, Charles Kihara, before High Court Judge Olga Sewe, Mr Garcia allegedly said the deal would only be effected once an Iranian national was absorbed into the firm. Mr Kihara told the court the Iranian, Vahagn, was employed for three months, but was fired after a review of his performance. He said Apex did not renew the job contract over legal limitations on employing foreign nationals when there are locals with identical skills.

Vahagn was also said to have been unco-operative with the rest of Apex's employees and would only take instructions from Garcia. But Telkom's legal officer said that Vahagn was kicked out under unclear circumstances. "I am aware that Mr Vahagn's employment was terminated under unclear circumstances. The second defendant has not issued any notice of intention to terminate the agreement to Apex Vision. I verily believe that the plaintiff's alleged apprehension is without basis and the present proceedings are an abuse of the court process," Irungu said.

Justice Sewe also heard that Telkom had yet to pay Apex Sh262 million for works done over the last two months. "The defendant has not made any payment that is due, owing now Sh262, 000,000. As a result, the plaintiff continues to use its money to fund the project."

Apex's lawyer pointed out that the firm has incurred Sh373 million in expenses by entering into contracts with third parties. The judge ordered that the status quo on the contract award be maintained until further orders from the court. She also ordered Telkom to compensate Apex for any losses it may lawfully suffer during the course of the case.