International arbitration court makes ruling on Tatu City
- Paul Ogemba
- Posted on: 01st Jul 2018 00:00:00 GMT +0300
Shareholder wrangles at the multi-billion shilling Tatu City real estate project in Kiambu County could come to an end if a decision by the LCIA is to go by.
Shareholder wrangles at the multi-billion shilling Tatu City real estate project in Kiambu County could come to an end if a decision by the London Court of International Arbitration (LCIA) is to go by.
This follows the LCIA’s decision to award the foreign investors US$17 million (Sh1.7 billion) against the Kenyan partners for dishonestly misrepresenting that they had paid US$ 20 million (Sh2 billion) to the sellers of Kofinaf Estate.
The landmark award is expected to settle the dispute over the ownership of the mixed-use ultra-modern development in Kiambu County.
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Mr Simon Nesbitt QC, the court’s sole arbitrator, ruled that SCF Holdings II Limited (SCF) owned by Stephen Jennings and his foreign partners, had proved claims of misrepresentation which justified the award of damages against Bidco chairman Vimal Shah, former Central Bank Governor Nahashon Nyagah and their partner, coffee farmer Stephen Mwagiru.
“It is now common ground that the representation was false. Neither party asserts that the deposit was paid. Accordingly, it is unnecessary to draw an inference from their refusal to explain what arrangement, if any, had been made with the sellers on their principals or what that arrangement might have been,” ruled LCIA.
The court ruled the Kenyan partners were individually and collectively represented in the negotiating team and that the decision to punish them will be binding.
Nesbitt found that although Mwagiru denied making the representation, his evidence during the hearing was unsatisfactory and had accepted earlier in the arbitration that the deposit was paid after discussions were held before the first stage of the transaction was completed.
Shah was also on record, according to the 127-page award document, that the US$ 20 million deposit had been paid to the sellers on the basis of discussions with Mr Mwagiru and Mr Nyagah.
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“They misled the claimant that a payment of US$20 million had already been made to the sellers. I am therefore satisfied that the claimant has proved that by entering into the agreement with the Kenyan partners, he suffered a loss of US$10.5 million,” ruled Nesbitt.
The arbitrator further ordered Shah, Nyagah and Mwagiru to pay interests on the sum from 2008 and the cost of arbitration which brings the total to US$17 million (Sh1.7 billion).
According to the court, Shah, Nyagah and Mwagiru were unable to demonstrate that they paid any money to either Rendeavour or to Socfinaf, the previous owner of over 10,000 acres of Kiambu land acquired by Rendeavour.
Rendeavour, through a Cypriot company SCF Holdings II Limited (SCF), launched the arbitration case in London against Manhattan Coffee International Holding (MCIH), a Mauritian vehicle through which Shah, Nyagah and Mwagiru hold their Tatu City shares, which are now in question.
The parties had agreed that the international arbitration will be final in settling the project’s ownership disputes.
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kiambu countytatu city