Years after plans to build Africa’s tallest building in Nairobi collapsed, Jabavu Village Limited is facing a battle from several parties over alleged debts and breach of contract arising from the project.
Jabavu village has planned to build Africa’s tallest building in Nairobi’s Upper Hill area, called the Pinnacle Project.
The Pinnacle project is a mixed-use development consisting of four basements, a 5-story mall, an approximately 45-story hotel building, and a 68-story commercial/residential building according to documents filed in court.
Plans for Sh20 billion fell through largely through the burden of financiers and court cases over a piece of land that the contractor planned to use for the storage of construction equipment.
The latest case was triggered by a demand sent to the company by Credit Bank demanding payment of $9,520,996 (about Sh1.23 billion).
The lender contracted Bespan International Ltd to collect the debt and sent a letter on June 24, 2024, demanding payment within seven days, as it could not be auctioned by debt collectors.
Jababu Village Ltd rushed to court under a certificate seeking to block the planned auction.
The firm through lawyer Kiprop Chesergon said in an application that High Court judge Alfred Mabeya has granted a temporary injunction last year, restraining lenders and Purple Royal Auctioneers from interfering, selling, or taking over parcels of land in Upper Hill.
“Despite the clear and unequivocal terms of the order, and in an attempt to subvert the authority of the court, the 1st respondent has extended instructions to the 3rd defendant (Bespan International), who is now intending to auction the suit property in violation of the court order, ” said Mr Kiprop in the application last month.
In November last year, the company stopped a statutory demand by lenders of Sh578 million.
In its application, the company said it could not be considered bankrupt because the value of its assets exceeded its alleged debts.
Jabavu Village stated that they are doing a housing project that they expect to receive Sh7.68 billion and that the lender is aware of the project and the actions the company is taking to increase liquidity and cash flow for the purpose of the project.
In opposing the case, Credit Bank argued that the company recognized the debt and that they were guaranteed.
According to the lender, it is free to enforce the seized securities and has the right to apply alternative recovery methods such as insolvency proceedings.
Last month, another judge rejected another case filed by a design and consulting company based in Dubai, which claimed to have been contracted to do civil and structural work at a cost of $1.25 million for the construction of a skyscraper.
Meinhardt (Singapore) PTE Limited and Meinhardt (Turkey) Engineering and Consulting LLC have sued Jabavu Village Ltd along with White Lotus Projects Limited, White Lotus Projects Incorporated as well as Poosapati Sita Ramachandra Raju.
The Dubai company also sued the directors of Jabavu Village Ltd Mr. Abdulkadir Ahmed Hussein and Mr. Ahmed Ali Abdi.
The Dubai-based company said it was hired for engineering design for the Pinnacle project.
However, this work was canceled due to feasibility constraints, leading to a subsequent engagement for engineering design for mixed-use residential and commercial plans.
The company said the total contract amount is $1.4 million (Sh190 million) and a further $831,000 (Sh107 million) for the design of safety, security, lifts, and lighting.
The Dubai-based company accused White Lotus Projects Ltd of breaching the contract and failing to pay for the services provided and in letters dated July 4, 2018, and July 17, 2018, the contractors issued notices of suspension of work due to non-payment of fees.
Further, in another letter dated November 26, 2018, the contractors informed White Lotus Projects Ltd of the breach of contract and their intention to terminate the service.
The Dubai company asserted that the use of the two separate entities was deliberate and aimed at deceiving the service providers contracted by White Lotus Projects Ltd, a shell company with no known assets, and that the defendants obtained the services without the intention of paying for intellectual property.
The company is seeking $280,000 in special damages and another $1,009,799 in general damages for deception and fraud and a permanent injunction preventing the Defendants from using the engineering design.
Jabavu Village Ltd stated that the allegations by the Dubai company are speculative, wild and conjecture.
It further states that there is no legal or contractual relationship with the Dubai company.
Jabavu village further denied that there was any collusion or conspiracy as alleged and termed the claim as a total fabrication.
In dismissing the case, Judge Josephine Mong’are said after looking at the evidence, she was inclined to agree with the defendants that the Dubai-based company had not established a cause of action against them because of the contract.
The judge said that the company’s efforts to say that Mahat Noor, the director of Jabavu Village Ltd and who signed the letter dated March 5, 2019, was the director of “White Lotus Projects Kenya”, went too far and did not bring the defendant in the privacy of the subject contract.
“The Plaintiff’s allegation that the Defendants benefited from the subject contract is without evidence and without evidence. For these reasons, I agree with the Defendant that the claim against them has no legs to stand and fall at this time,” said the judge.
