Attorney General’s failure to defend case involving Sh321 million claim returns to haunt

Failure by the Attorney General to defend a Sh321 million claim by a construction company five years ago continues to haunt the Government to date.

The High Court in Nairobi recently threw out an application by the AG attempting to justify the opinion that Kirinyaga Construction was not entitled to the money it is demanding.

Justice George Odunga also refused to allow the AG to enjoin the Kenya Revenue Authority into the matter. The AG wanted KRA to file an affidavit showing that Sh202 million was used to defray tax liabilities of Kirinyaga Construction.

The AG told the court that the money had been remitted to KRA by Treasury to pay the tax owed by Kirinyaga Construction.

“If the respondent (AG) decided to pay a sum due to a third party, who was not entitled to such payment, such payment cannot be taken to have been made in settlement of the decree in question,” said the judge. But Justice Odunga said the AG might be off the hook if he proves, during the hearing of the main case seeking to compel the Government to pay, that he legally settled the Sh321 million claim.

 “It is clear that apart from the fact that the existence of a judgment against the Government, the law recognises that due to the special role played and the central position held by the Government in the management of the affairs of the country, there is a necessity for further proceedings to be undertaken before judgement can be implemented,” said Odunga.

The dispute dates back to 2003 when the Government contracted Kirinyaga Construction Company to rehabilitate access roads to Sagana State Lodge. Upon completion of the work, a disagreement arose between the two parties on the amount to be paid. Kirinyaga Construction Ltd, associated with former Mathira MP Ephraim Maina, lodged a suit in 2009 claiming breach of contract against the Attorney General.

The AG never defended the suit. On November 8, 2010 the AG and Kirinyaga Construction entered into a consent agreeing that the company be paid Sh321,986,556.94 for work done. The construction company was however not paid after the Ministry of Finance refused to honour the court order reached by the consent of the two parties.

Seek orders

The refusal by the AG prompted the company to file another case asking the court to compel the Ministries of Finance and Public Works to pay the cash. On April 23 last year, High Court Judge Weldon Korir allowed the company to apply for orders compelling the Finance Principal Secretary to pay the money. Before the main case could be heard, the AG in August 2013 sought to have KRA enjoined in the matter. The parties will now argue their cases in the main suit.