KeNHA’s appeal against a Sh201 million contractor payout highlights the growing tension between government agencies and foreign firms in Kenya’s infrastructure sector, with broader implications for how disputes are resolved in future projects.
Background of the Case
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Kenya National Highways Authority (KeNHA) was ordered by a lower court to pay Sh201 million to SBI International Holdings (Kenya), an Israeli contractor, over disputed road works.
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KeNHA argued that the contractor’s work did not meet agreed standards, while the contractor insisted the payment was justified.
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The Court of Appeal has now granted KeNHA permission to challenge the ruling, giving the agency a chance to contest the payout.
Broader Context: Contractor Disputes in Kenya
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Kenya’s construction industry is a cornerstone of economic growth, but disputes over payments and project quality are common.
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Contractors often face delayed payments, contested claims, and lengthy litigation, which can stall infrastructure projects.
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The government has been working on reforms, including the Construction Payments Adjudication Bill (2025), aimed at providing faster, cheaper dispute resolution mechanisms compared to traditional court battles.
Implications of the Appeal
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For KeNHA:
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The appeal could save the agency millions if successful.
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It also sets a precedent for how government agencies defend themselves against claims from foreign contractors.
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For Contractors:
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The case underscores the risks of working with government agencies in Kenya, where disputes can drag on for years.
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Foreign firms may demand stricter contractual safeguards before engaging in future projects.
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For Kenya’s Infrastructure Sector:
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Prolonged disputes can delay road construction and other critical projects.
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The outcome may influence investor confidence in Kenya’s ability to manage large-scale infrastructure contracts fairly.
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Expert Perspectives
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Legal analysts note that litigation is costly and adversarial, often undermining efficiency in the construction sector.
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The Adjudication Bill is seen as a potential game-changer, offering quicker resolutions and reducing financial distress for contractors.
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However, until such reforms are fully implemented, cases like KeNHA vs. SBI International will continue to shape the landscape of infrastructure disputes.
Writer Attribution
By Amina Njoroge, African Business Correspondent
