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JudgmentCONCISE PROJECTS LIMITED VS GREEN VIEW VILLAS LIMITED12 min read

CONCISE PROJECTS LIMITED VS GREEN VIEW VILLAS LIMITED

High Court at Milimani High Court · · Moses Ado

Introduction
1. There are two applications before this Court for determination.

2. The first is the Applicant's Notice of Motion dated 23rd February 2026, brought under Section 7 of the Arbitration Act, 1995, seeking interim measures of protection in aid of arbitration pending resolution of a dispute arising from a construction contract between the parties.

3. The second is the Respondent's Notice of Motion dated 26th March 2026, seeking to vary, set aside and/or discharge the interim orders granted by this Court on 6th March 2026 pursuant to the first application.

4. By consent of the parties and direction of this Court, both applications were canvassed together by way of affidavit evidence and written submissions, it being common ground that they raise overlapping, and in substantial part identical, questions of fact and law.

5. The submissions were briefly highlighted in Court by the parties’ respective Advocates.

6. This ruling therefore disposes of both applications.

Background

7. The parties, on or about 14th September 2023, executed the Joint Building and Construction Council (“JBCC”) agreement (“the Contract”), under which the Applicant was engaged as contractor for the construction of 99 villas on the Respondent's land, the Green View Villas project.

8. The Contract contains, at Clause 39, provisions governing termination, and at Clause 46, a sequential dispute-resolution mechanism comprising (i) amicable settlement and/or mediation under Clause 46.2.1, (ii) adjudication under Clause 46.2.7/46.3, and (iii) arbitration.

9. By a notice dated 12th February 2026, the Respondent purported to terminate the Applicant's employment under the Contract, citing poor workmanship, substandard execution of works, failure to remedy identified defects, and failure to comply with lawful instructions, and demanded immediate vacant possession of the site.

10. On 23rd February 2026, the Applicant, through its Advocates, simultaneously (i) issued a Notice of Dispute and Call for Amicable Settlement under Clause 46.2.1 of the Contract, and (ii) filed the present Notice of Motion seeking interim orders restraining eviction, lock-out, denial of access, or interference with the project, and seeking preservation of the status quo ante as at 12th February 2026, pending arbitration.

11. On 6th March 2026, this Court granted interim orders substantially in terms of the orders sought, in the presence of Counsel for the Respondent.

12. The Respondent opposed the substantive application through a Replying Affidavit sworn by Wang Liyong on 11th March 2026, and thereafter, on 26th March 2026, filed its own Notice of Motion seeking to discharge the orders of 6th March 2026, alternatively seeking a conditional variation pending a joint valuation. This second application was supported by a Certificate of Urgency and the Supporting Affidavit of Grace Pharez, and later a Supplementary Affidavit dated 7th April 2026 and a Second Supplementary Affidavit dated 30th April 2026.

13. The Applicant filed a Replying Affidavit dated 9th April 2026 in answer to the Respondent's application, and a Further Affidavit sworn by Ebenezer Odoom on 29th April 2026, updating the Court on developments in the Clause 46 process.

14. It is common ground, borne out by the correspondence exhibited by both sides, that following the grant of the interim orders the parties in fact proceeded with elements of the Clause 46 process: a joint site inspection and stock-taking were conducted; the Applicant's plant, tools and materials were removed from site for safeguarding with the knowledge of both parties; the respective Quantity Surveyors engaged in a valuation exercise; and by letter dated 24th April 2026 the Applicant tabled a consolidated final account claiming a total sum of Kshs. 380,265,181.42, comprising value of work done, interest on delayed payment, loss of profit, and expenses said to have been incurred in respect of financing described as the “Almasi” exposure, and called for a final Clause 46 sitting on 28th April 2026.

15. The Respondent did not attend the meeting of 28th April 2026. By email dated 29th April 2026, the Respondent's Advocates took the position that the quantum payable was properly a matter for the intended arbitral proceedings. The Applicant's Advocates thereupon recorded the amicable settlement stage as having failed and issued an Adjudication Notice under Clause 46.2.7 of the Contract.

The Applicant's case

16. The Applicant's case, as developed in its submissions, is that Clause 46 was properly and sequentially invoked; that the dispute is not confined to quantum but extends to the validity of the termination, delayed-payment interest, loss of profit, financing exposure, and the final closure of the parties' contractual relationship; that the subject matter of the intended arbitration remains under threat of unilateral alteration should the Respondent be permitted to hand the site to another contractor before the final account is agreed; that the Respondent has not discharged the burden of showing fraud, collusion or material non-disclosure such as would justify disturbing an order made with Counsel for the Respondent present in Court; and that, in any event, the Respondent has offered no concrete security for the sums claimed.

The Respondent's case

17. The Respondent's case is that the termination was properly effected under Clause 39, following prior protests from independent consultants regarding workmanship; that the Contract stood automatically terminated by effluxion of the notice period on or about 2nd March 2026; that Clause 46 prescribes a strictly sequential mechanism — amicable settlement, then adjudication, then arbitration — which the Applicant bypassed by moving directly to this Court and by simultaneously filing its Notice of Dispute and the present application, evidencing an intention to pre-empt rather than pursue the contractual mechanism.

18. It was further the Respondent’s position that joint inspection, stock-taking and valuation have in fact been carried out, such that the only matter genuinely outstanding is quantum, a pure money claim compensable in damages. They maintained that Clause 39.6.1 of the Contract expressly entitles the Employer to engage another contractor upon termination, independently of the arbitration clause, and that the continued suspension of works exposes the Respondent and third-party purchasers, who pre-purchased 70% of the units off-plan, to escalating and potentially irreversible prejudice, including structural deterioration flagged in field test reports of the National Construction Authority.

19. Finally, the Respondents expressed their willingness to furnish security, including its title to the suit property, said to be worth in the order of Kshs. 250,000,000, for any sum ultimately found due.

Analysis and Determination

20. Having duly considered the pleadings, affidavits, annexures, submissions and authorities relied upon by both parties, I am satisfied that the main issue for determination is whether the Applicant has established a basis for interim measures of protection under section 7 of the Arbitration Act and, consequently, whether the orders issued on 6th March 2026 should be maintained, varied, discharged or otherwise set aside.

21. The applicable legal framework is Section 7(1) of the Arbitration Act provides that it is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, an interim measure of protection from the High Court.

22. The essentials to be considered by a court exercising this jurisdiction were authoritatively set out by Nyamu, J.A. in Safaricom Limited v Ocean View Beach Hotel Limited & 2 Others [2010] eKLR, namely: (a) the existence of an arbitration agreement; (b) whether the subject matter of the arbitration is under threat; (c) what, in the special circumstances, is the appropriate measure of protection after an assessment of the merits of the application; and (d) for what period the measure ought to be given, so as to avoid encroaching upon the tribunal's decision-making power.

23. It is also well settled, and I bear firmly in mind, as held in Safaricom Limited (supra), that a court exercising jurisdiction under Section 7 does not sit as a court of first instance on the merits of the underlying contractual dispute, and must be judicious not to grant relief that would pre-empt or prejudice the outcome of the arbitration.

24. Equally, and as was emphasised by Ogola, J. in Itabuild Imports Limited v A.I.C Kijabe Hospital [2015] eKLR, an arbitration clause and a termination clause in the same instrument ordinarily operate independently of one another, and an arbitration clause is not, without more, to be read as freezing a respondent's contractual entitlements upon termination, including any entitlement to engage a replacement contractor.

(i) Existence of an arbitration agreement

25. In the present case, it is undisputed that Clause 46 of the JBCC Contract provides the parties' agreed dispute-resolution mechanism, and both parties' pleadings proceed on the basis that arbitration is the ultimate forum for the determination of their dispute on the merits. The first Safaricom essential is therefore satisfied.

(ii) Whether the subject matter of the arbitration remains under threat

26. At the time the orders of 6th March 2026 were sought and granted, I am satisfied, based on the evidence on record, that the Applicant had established a real and legitimate apprehension. A termination notice had been issued demanding immediate vacant possession; the Applicant's plant, tools, materials and personnel remained on site; and there was, on the material then available, a genuine risk that an uncontrolled handover would compromise the accuracy of any subsequent stock-taking, measurement and valuation exercise, to the prejudice of the Applicant's ability to establish and recover sums properly due to it.

27. Interim protection to preserve the site pending an orderly joint inspection was, in my view, a legitimate and proportionate response at that stage. Consequently, I do not find that the orders of 6th March 2026 were improvidently granted.

28. The position has, however, materially changed since 6th March 2026. It is common ground, and indeed confirmed in the Applicant's own Replying Affidavit, that: a joint site inspection and stock-taking have been conducted; the Applicant has itself removed its plant, tools and equipment from the site “for safeguarding purposes”; the parties' respective Quantity Surveyors engaged in a valuation exercise; and the Applicant has, by letter dated 24th April 2026, tabled a fully particularised final account. It therefore follows that the Applicant’s very apprehension that justified the original prayer and order has, on the parties' own showing, been substantially addressed and overtaken by events.

29. What remains genuinely in dispute between the parties, on a fair reading of the final account tabled by the Applicant itself, is the propriety of the termination and its financial consequences: the value of work done, interest on delayed payment, loss of profit, and financing exposure. These are all, in substance, monetary claims.

30. I respectfully adopt the observation of Ogola, J. in Itabuild (supra), that where a claim is essentially a money claim, an award of damages is ordinarily an adequate remedy, and that continued suspension of construction works, without any indication of when the same might resume, is itself a form of prejudice which a court exercising this jurisdiction should be reluctant to visit upon the other party absent good reason.

31. I am fortified in this view by the persuasive reasoning in Lalji Meghji Patel & Company Limited v Presbyterian Foundation, Miscellaneous Application No. 113 of 2020, [2026] KEHC 4713 (Ngaah Jairus, J.), where, on materially similar facts involving a completed joint inspection and stock-taking exercise, the Court held that there was no danger that further development of the property, whether by the original contractor or a substitute, would extinguish or dissipate the subject matter of the arbitration so as to render the arbitral proceedings otiose, and that interim measures exposing a project to further waste would be detrimental to both parties.

(iii) What would be the appropriate measure of protection?

32. I accept the Respondent's submission that Clause 39.6.1 of the Contract, which is not disputed as to its terms, entitles the Employer to engage another contractor to complete the works upon termination, and that nothing in Clause 46 suspends that entitlement pending resolution of the dispute.

33. I further accept, on the uncontroverted evidence of the National Construction Authority field test reports and the Project Engineer's report, that continued suspension carries a real risk of structural deterioration, and that the Respondent, having pre-sold a substantial proportion of the units off-plan, faces mounting and escalating exposure to third parties who are strangers to the arbitration agreement and whose rights this Court cannot ignore in weighing the balance of convenience.

34. I am, however, not persuaded that the Applicant's claim to a final, orderly reconciliation of accounts should go entirely unprotected. The Applicant has invested considerable effort, through the Clause 46 process, in producing a particularised final account. I am also mindful that the Respondent has, through its own pleadings, voluntarily offered to furnish security for whatever sum may ultimately be found due, whether by way of its title to the suit property or by deposit into a joint interest-earning account. It is appropriate, and consistent with the interests of justice, to hold the Respondent to that offer as a condition of relief.

35. In the result, I find that the appropriate measure of protection, having regard to the circumstances now obtaining, is a security for the Applicant's monetary claim, and a preservation of the integrity of the final account and reconciliation process already substantially undertaken by the parties. A continued restraint on construction itself would, on the facts as they now stand, exceed what is necessary to protect the subject matter of the arbitration and would risk causing the very prejudice — structural deterioration and third-party claims — that this Court ought, so far as possible, to avoid.

(iv) The period of the measure

36. Consistent with the fourth Safaricom essential, any measure of protection granted must be time-bound so as not to encroach upon the adjudicator's or arbitral tribunal's own jurisdiction.

37. Accordingly, I consider it appropriate that the security and reconciliation measures ordered below subsist until the conclusion of the Clause 46 process (adjudication, and if necessary, arbitration), or further order of the arbitral tribunal seized of the matter, whichever first occurs, and that they be revisited, if necessary, by that forum rather than by this Court.

Disposition

38. For the foregoing reasons, the Respondent's Notice of Motion dated 26th March 2026 is allowed in part. The Applicant's Notice of Motion dated 23rd February 2026 is equally allowed in part. I hereby direct and issue the following orders:

(a) The interim orders issued on 6th March 2026 are hereby varied, to the extent that the Respondent is at liberty to proceed with, and to engage any contractor, architect, engineer or project manager to continue and complete, the construction of the Green View Villas project, PROVIDED THAT this liberty shall take effect only upon and subject to compliance with order (b) below.

(b) As security for the Applicant's monetary claim, the Respondent shall, within fourteen (14) days of this Ruling, deposit the original title deed to the suit property, or a duly registered charge over the title to the property, into the joint custody of the parties' respective Advocates.

(c) The Respondent, any incoming contractor, and their respective agents and employees, shall not interfere with, dispose of, or in any manner deal with the Applicant's plant, tools, equipment or materials already identified and safeguarded pursuant to the joint stock-taking exercise, pending final reconciliation of accounts under Clause 46 of the Contract.

(d) The parties shall proceed with, and use their best endeavours to conclude, the Clause 46 process, including the Adjudication Notice already issued, without prejudice to either party's right thereafter to refer any unresolved matter to arbitration in accordance with Clause 46 of the Contract.

(e) The security and preservation measures at order (b) above shall subsist until the conclusion of the Clause 46 adjudication and/or arbitration process, or until varied by the adjudicator or arbitral tribunal seized of the matter, whichever first occurs.

(f) The costs of both applications shall abide the outcome of the Clause 46 adjudication and/or arbitration.

39. It is so ordered.

DATED, SIGNED, AND DELIVERED AT NAIROBI
THIS 17TH DAY OF SEPTEMBER 2026

HON. MR. JUSTICE MOSES ADO
Judge of the High Court

In the Presence of:
Moses C/A
……………… for the Applicant

……………for the Respondent
    CONCISE PROJECTS LIMITED VS GREEN VIEW VILLAS LIMITED CONCISE PROJECTS LIMITED VS GREEN VIEW VILLAS LIMITED