Government fails to stop Sh147.77 million Nakuru markets construction case

The government has failed in its bid to stop a Sh147.77 million case over the construction of Economic Stimulus Programme markets within Nakuru County. Judge Joseph Sergon dismissed an objection to the case filed by the Principal Secretary for Housing and Urban Development, the Attorney General and Tej Architects.

The judge ruled that the case filed by Extreecon Engineering on May 12, 2026, would continue to full hearing and determination. “The Preliminary Objection dated June 5, 2026, is dismissed in its entirety and costs are granted to the applicant,” ruled Sergon.

Sergon maintained that the existence of an arbitration clause, as submitted by the government, could not oust the court’s jurisdiction to hear the case. The said arbitration process, whether imminent or otherwise, would raise questions that would require full hearing.

The court also dismissed the submission that Extreecon concealed the existence of four notices dating from March 10, 2025 to August 19, 2025, allegedly communicating expiry of its contract. The court needed to examine the affidavit on record to determine what was not disclosed and assess its materiality.

The court also took note that it needed to examine the contract termination in terms of its lawfulness and validity. Further, Sergon noted that Tej’s appointment as the government’s Supervising Consultant was contested by Extreecon and the court needed to determine the same after trial.

Extreecon moved to court seeking an order restraining the government from terminating its contract on the construction of the markets. The company wanted the government stopped from acting on its termination letters issued by the south rift office of the Principal Secretary on May 2 and one by Tej Architects on May 7.

Luke Owino, the Managing Director of Extreecon, submitted that the company was a lawful contractor for construction of the markets in Nakuru from 2023. The contract sum for the project was Sh147.77 million. The company had achieved 59.33 percent progress against payment of only 27.3 percent of value certified.

He stated that on May 7 the government purported to terminate the contract and convened a joint exercise on May 14 to re-tender the outstanding works. The company argued that the purported termination occurred notwithstanding allegations that Tej’s appointment was procedurally irregular.

In response, the government filed an objection raising five points of law. It also challenged the jurisdiction of the court, citing a mandatory arbitration clause in the contract signed on March 1, 2024.

The court’s decision means the dispute will now proceed to full hearing. Issues around the termination, the role of the supervising consultant, the level of work completed and the payments made will be examined on their merits.

The Economic Stimulus Programme markets form part of efforts to improve trading infrastructure in various counties. The Nakuru projects under the contract have become the subject of the current legal contest.

Both parties will now prepare for the substantive hearing. The dismissal of the preliminary objection clears the way for the court to consider the full evidence and arguments from each side.