Government fails to stop Sh147.77 market construction case

A section of the economic stimulus programme market under construction. The programme is designed to transform the rural areas.[File-Standard]

The government has failed in its bid to stop a Sh147.77 million case over the construction of Economic Stimulus Programme (ESP) Markets within Nakuru County.

Judge Joseph Sergon dismissed an objection to the case filed by Principal Secretary (PS) Housing and Urban Development South Regional, the Attorney General and Tej Architects.

The judge ruled that the case filed by Extreecon Engineering, a construction company, on May 12, 2026, would continue to full hearing and determination.

“The Preliminary Objection dated June 5, 2026, is dismissed in its entirety and costs are granted to the applicant (Extreecon),” ruled Sergon.

Sergon maintained that the existence of an arbitration clause as submitted by the government, could not oust the court’s jurisdiction to hear the case.

According to Sergon, the said arbitration process, whether imminent or otherwise, would raise questions that would require full hearing.

The court also dismissed the submission that Extreecon concealed the existence of four notices dating from March 10, 2025 to August 19, 2025, allegedly communicating expiry of its contract.

“This court needs to examine the affidavit on record to determine what was not disclosed, assess the materiality and weigh them against the applicant's account,” he ruled.

The court also took note that it needed to examine the contract termination in terms of its lawfulness and validity.

Further, Sergon noted that Tej’s appointment as the government’s Supervising Consultant was contested by Extreecon and the court needed to determine the same after trial.

“All the points raised by the respondents (government) require the court to weigh the competing affidavits, assess the strength of each party's case, and exercise judicial discretion,” ruled Sergon.

Extreecon moved to court seeking an order restraining the government from terminating its contract on the construction of the markets.

The company wanted the government stopped from acting on its termination letters issued by the south rift office of the PS on May 2 and one by Tej Architects on May 7.

“The court should put an interim measure of protection, preserving the status quo of the parties' engagement pending reference of the dispute to arbitration,” the company applied.

Luke Owino, the Managing Director Extreecon submitted that the company was a lawful contractor for construction of the markets in Nakuru from 2023.

“The contract sum for the project was Sh147.77 million. We had 59.33 percent progress against payment of only 27.3 percent of value certified,” he deposed.

He however, stated that on May 7, the government purported to terminate the contract and convened a joint exercise on May 14 to re-tender the outstanding works.

The company stated that the purported termination occurred, notwithstanding the allegations that Tej’s appointment was procedurally irregular.

In response, the government filed an objection, raising five points on points of law. It also challenged the jurisdiction of the court.

According to the government, the contract signed on March 1, 2024, contained a mandatory arbitration clause providing that no court should intervene in the arbitration process.