Mt Kenya University (MKU) has received a temporary reprieve in a Sh511 million case against businessman Bernard Gikunda Mwarania.
The legal battle between MKU and Mwarania's Step Up Holdings over premises, in which the university is located in Nakuru County, has been ongoing for a decade.
The reprieve comes after a Nakuru High Court ruling permitting MKU to file a defence in the multi-million row pitting the institution against Mwarania’s company, Step Up Holdings.
“The interlocutory judgement entered against the applicant or defendant on November 17, 2011, is hereby set aside,” Justice Hilary Chemitei ruled.
The court directed Step Up Holdings to deposit a Sh511million bank guarantee from a reputable bank in Kenya within 30 days to await the hearing of the legal tussle.
Justice Chemitei added, “The applicant shall within 30 days from the date herein deposit Sh511 million in a joint interest-earning account in the names of both counsel for the applicant and the defendant pending the hearing and determination of the suit.”
MKU is appealing a ruling issued in 2011 that found the institution liable to pay Sh511 million to Step Up Holdings after entering a verbal deal to open a branch in Kericho town.
The firm had until that time managed the MKU Nakuru Campus and paid collaborating fees but claimed a month after the verbal deal MKU forced it to shut the Kericho Campus, causing it to lose Sh953,881.
Step Up Holdings claims MKU then took over the campus relocating 3,807 students and 295 staff to other premises.
Due to this, the court ruled in favour of Step Up Holdings finding Mt Kenya University liable to pay it Sh511 million after it failed to present a defence seeking arbitration on the matter.