Supreme Court orders KEBS to pay Dubai firm 1.6B, as ICSID rules in favour of Kenya against Cortec.

In one of the most ironic and surprising legal turn of events, within a short span of 48 hours, the Kenyan Supreme Court ruled in favour of a foreign firm against its very own Kenyan company, while thousands of miles away in Washington DC, the International Centre for Settlement of Investment Disputes (ICSID) ruled in favour of Kenya against mining company, Cortec.

In the first case involving the Kenya Bureau of Standards and a Dubai based firm, the Dubai firm is set to receive a compensation of Sh1.6 billion from the Kenyan government for breach of a fuel inspection tender by the Kenya Bureau of Standards (Kebs) 11 years ago.

This follows a decision of the Supreme Court judges to reject a request to review a judgment they passed in December last year that found Kebs liable for breach of the contract awarded to Geo-Chem Middle East in 2009.
The Apex court led by acting Chief Justice Philomena Mwilu said the application for stay of the court’s judgment dated December 18, 2020 was “an appeal in disguise”.

In urging court to suspend execution of the judgment, Kebs argued that the application was in public interest because payment of the amount involved expenditure of public funds, occasioning excessive burden on the taxpayer.

In the second case which took place in Washington DC between the Kenyan Government and two mining companies, Kenya has for the second time won a Sh200 billion case against Cortec Mining Kenya Limited and Stirling Capital Limited over revocation of their licence in 2013.

The two wanted the International Centre for Settlement of Investment Disputes (ICSID) to overturn a 2018 tribunal decision, which found the license was a protected investment.

The firms had been granted license to mine niobium and rare earth minerals at Mrima Hills in Kwale County but it was later cancelled by the government, forcing Cortec to challenge the revocation.

In 2018, the investor-state arbitral tribunal dismissed the case and ordered the companies to pay costs of around $3.5 million to the government, compared with the $6.5 million it was seeking.

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    Written by Joshua Wanga

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