NCPB loses maize tender appeal #kenya

NATIONAL Cereals and Produce Board has lost an appeal it
filed disputing the demand of Sh267 million by Erad
Supplier.
The Court of Appeal on Thursday compelled the stated
owned cereals dealer to pay Erad the amount following a
High Court order which had been made earlier in favour of
the firm.
Appellant judges Roselyne Nambuye, Patrick Kiage and
Gatembu Kairu, ruled that NCPB did not demonstrate why it
wanted the court to rule in its favour.
"Given the considerations before us. we are not persuaded
that the applicant has made enough demonstration to prove
its case......The application is therefore dismissed," the
ruling read.
Before NCP appealed, Erad was awarded the amount after
an arbitrator found that board was in breach of an
agreement in which the company was contracted to supply
40,000 metric tonnes of white maize in 2004.
However before Erad could carry out the work, NCPB is said
to have failed to issue letters of credit to enable it import the
maize as indicated in the contract. As a result of breach of
contract, Erad claimed loss of profit and storage costs
which culminated in arbitration.
Arbitrator Evans Thiga had ruled in favour of Erad and
awarded it Sh564 million saying NCPB breached the
contract by deciding to amend agreements.
"Throughout the evidence, I was unable to find any breach
of the contract by Erad. In fact the party in breach was NCPB
for failing to perform its part of the contract," Thiga said.
However, the board was not satisfied with the decision and
moved to the High Court before judge Leonard Njagi who
ruled in favour of Erad a ruling the appeal court upheld.
NCPB in its defence accused the arbitration board of bias as
it did not consider its case as the company that Erad had
contracted to supply it with maize, Ropack CC International,
does not in fact deal in maize business.
The board said it is registered with South African
Department of Trade and Industry to offer financial
intermediation, insurance, real estate and business
services.
If further said that the company which Erad claimed for
storage charges, Chelsea Freight, is registered for air
transport.
Erad Suppliers is associated with Nairobi businessman
Jacob Juma.