The High Court of Kenya has ruled in favour of Machiri Ltd, a contractor hired in 2014 to demolish buildings at the Jomo Kenyatta International Airport (JKIA).

Justice Alfred Mabeya directed the Kenya Airports Authority (KAA) to pay the contractor Sh300 million and an additional Sh133.2 million held in KAA bank accounts.

The dispute arose from a Sh388.2 million contract for the demolition of airport halls, baggage areas, and office blocks.

Machiri Ltd completed the work in July 2016 but faced payment delays from KAA.

Arbitration proceedings ensued, with the arbitrator awarding the contractor the original contract sum along with accrued interest.

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This decision brought the total owed to Sh812 million.

KAA contested the ruling on multiple grounds.

Firstly, they argued that Machiri Ltd should have filed their claim under the Government Proceedings Act, which requires notification of the Attorney General before suing the government or its agencies.

Justice Mabeya, however, disagreed, stating that KAA did not qualify as a government department and operated as a separate legal entity capable of being sued.

"Secondly, it is not shown and there is nothing on record that it (KAA) is a department of the government of Kenya," Mabeya stated.

Secondly, KAA challenged the interest rate applied and the use of FIDIC contract conditions within the arbitration.

They argued that the arbitrator's calculations exceeded reasonable commercial lending rates and that the chosen contract terms were not fully applicable to the project.

However, the judge upheld the arbitration decision on these points.

With KAA refusing payment, Machiri Ltd returned to court seeking to attach KAA's bank accounts to recover the outstanding balance.

The court's order compels KAA to settle a portion of the disputed amount while leaving the remaining Sh378.8 million to be pursued through other means.