Hustle

Why MultiChoice has rejected Sh895m office block in Lavington

The MultiChoice office in Westlands. PHOTO | FILE
The MultiChoice office in Westlands. PHOTO | FILE

Pay-TV service provider, MultiChoice Kenya, is embroiled in a bitter dispute with a contractor after it rejected an Sh895 million faulty office block it had hired a local firm to build.

Cementers Limited, the contractors, have sued the TV firm arguing that MultiChoice is planning to sell the building located on Nairobi’s Oloitoktok Road even before the dispute is resolved.

Cementers on August 1 obtained orders allowing it to access MultiChoice Kenya offices and the project structural engineer in order to get the documents it was seeking to prosecute its case with the digital satellite television firm.

Justice James Makau further restrained MultiChoice from disposing of the building until the suit is heard and determined.

‘PRESERVE PROPERTY’

The orders restrained “MultiChoice or its agents from advertising or offering for sale the property…situated along Oloitoktok Road within the Lavington area of Nairobi County, and commanded the TV firm to preserve the said property in its current state pending the hearing and determination of the suit,” Justice Makau ruled.

MultiChoice Kenya Limited is listed as the first defendant in the suit while regional director of MultiChoice International Holdings East Africa, Stephen Isaboke, is listed as the second defendant.

Cementers Limited on August 6 confiscated some electronics and documents from MultiChoice offices, a move that the pay-TV firm challenged in court.

MultiChoice argues that granting Cementers Limited a blanket access to its premises was objectionable because it risks exposing confidential information on its customers such as names, addresses, smart card information and location.

MultiChoice says the seizure has affected its logistical operations and that of its sister firms in 15 African countries.

The TV firm argued that allowing third parties to access such information exposed it to the risk of being sued for breach of customer information.

FAULTY BUILDING

MultiChoice has further asked the court to allow it to continue with the planned sale of the property, arguing that the proposed sale is intended to mitigate the Sh4.6 million loss it is incurring per month to secure, insure and maintain the faulty building.

MultiChoice Kenya managing director, Eric Odipo, who is also listed as a defendant in the suit, says Cementers Limited’s contract was terminated in June 2017 after the contractor was given notice that also sought to refer the matter to arbitration.

Mr Odipo said MultiChoice opted to sell the building because it would not serve the intended purpose since the remedial works proposed would introduce more columns making the spaces more closed.

MultiChoice says the contractor had shown interest in buying the building, but allegedly moved to court the same week it was supposed to discuss the deal.

The firm wants the court to strike out the suit, arguing that the only option available is arbitration as provided in the contract.

High Court judge Grace Nzioka on August 9 ordered that no further confiscation of materials should take place and that Cementers releases all materials not authorized by the court for seizure.

Cementers Limited was on March 18, 2015 awarded the Sh895 million contract to build the MultiChoice office block. The firm undertook to complete the work within 83 weeks or October 2016.

SAGGING BEAMS

But in January 2016, some beams started sagging prompting the Conapex Consulting Engineers Limited and MultiChoice to commission independent experts to find out the cause of the sagging.

Conapex were the structural engineers overseeing the construction. Cementers Limited says after this defect was detected the structural engineer was replaced with Interconsult Limited, a firm that had been earlier engaged as an independent expert to audit the building after defects were detected.

Cementers Limited said MultiChoice declined to give it a signed copy of the report and instead shared an unsigned document.

The construction company claims that the report was doctored to show the sagging of the beams was caused by concrete. The report, Cementers says, was meant to absolve structural engineers from liability even as it became clear that the defect was structural for which structural engineers should have been held liable.

Cementers Limited claims that by the time the construction was stopped it had done 70 percent of the work, translating to Sh626.5 million.

The company claims that due to negative reputation emanating from the project it had lost a contract for development of Habitat valued at Sh1.3 billion and a Sh3.5 billion contract of Five Star Paradise in Kiambu.

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GALGALLO FAYO



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