19 January 2013

Kenya: Cereals Board Fights to Save Sh500 Million From Auctioneers

NATIONAL Cereals and Produce Board yesterday sought to stop the attachment of its property saying it was bound to lose Sh500 million.

Mohammed Nyaoga and Patrick Lutta for the NCPB, asked Lady Justice Nancy Kamau to grant orders stopping the attachment by Erad Suppliers causing a loss of public money.

The board said it was fighting the claim by Erad as it was based on mischief and corruption. Nyaoga said that any inclination to pay the company would be contrary to public policy and which would condemn the taxpayers to pay Sh500 million for relief food that was never delivered.

Late last year, the board failed to stop the supplier from demanding the money after the judges of the Court of Appeal said that its application was not clear. The move forced the board to head back to the High Court to seek the stay orders.

NCPB has been trying to stop the execution of an arbitration award that was entered against the state corporation. The board is embroiled in a dispute with Erad Suppliers and General Contractors, who want to enforce the contract signed between them in August 2004 for the supply of 40 metric tonnes of white maize.

A dispute arose between the parties and the matter was referred to an arbitrator. And in his decision of July 2009, the arbitrator- Evans Gaturu ruled in favour of the supplier and the award was published before lawyers representing all parties.

The parties later moved to the High Court seeking the adoption of the award but instead NCPB filed a different case seeking to set aside the award. The case was later dismissed by Justice Leonard Njagi forcing NCPB to move to the Court of Appeal.

The NCPB has lost most of its properties to auctioneers who have obtained orders to enforce awards. The board pleaded with the court saying that award was large amount given that tax payers were set to lose about US $ 3,106,000 if the award was not set aside.

In reply yesterday, Erad through its lawyer Ahmednasir Abdullahi asked the court to dismiss the application saying it was an abuse of court process. According to Abdullahi, the corporation has filed several applications of the same nature and which have been dismissed.

Lady Justice Kamau will give her ruling on January 23 but she directed the parties to maintain the status quo until then.

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