High Court Orders Swift Filings in Explosive KBL–JILK Arbitration Battle

The High Court has today asked the parties in the case filed by JILK Construction Limited against the Competition Authority, Diageo PLC and others to file their responses to the latest suit within three days, with further directions set to be issued on Tuesday, February 24.

This is after some of the lawyers in the case complained that they had only known about some aspects of the case via social media, even as JILK’s lawyers insisted the documents had been sent on email.

Justice Francis Muthuku ordered that the applications be served physically within one day and the responses to be filed within three days of service. Further directions will be issued on February 24.

In the latest suit, JILK Construction Ltd wants the court to lift the orders made in December 2024 stopping the arbitrator in the dispute between Kenya Breweries Limited and the construction company from making an award.

JILK has attempted to rope in Diageo and East African Breweries Ltd executives in the case. Njoroge Regeru, acting for Diageo, said the company had no contract with JILK Construction Ltd while Prof Githu Muigai, acting for the EABL executives, said he had not been served the documents.

Justice Muthuku said the application to strike out Diageo from the case would be heard in priority.

Kamau Karori, who is representing KBL, said the company could not respond since the dispute between it and JILK is still under arbitration.

The multitude of applications in the matter have meant that the core of the dispute between the construction company and KBL have remained unheard.

The dispute between KBL and JILK officially began in November 2019, when JILK informed KBL of the termination of the contract between them for construction works at the Kisumu Brewery. By that time, JILK had been paid KSh1.2 billion. The dispute between the two companies was over an extra KSh163 million.

After terminating the contract and leaving the site, JILK wrote to KBL in January 2020 asking to be paid the KSh163 million.

The amount was not paid and in February 2020, JILK asked the Architectural Association of Kenya (AAK) to help appoint an arbitrator to solve the dispute between the two companies.

KBL agreed to have the arbitrator, as a neutral third party decide what ought to be paid, and the AAK appointed Mutinda Mutuku. Mutuku is a quantity surveyor and the Managing Director of Buildnett Consultants Ltd. JILK is owned by Pastor Engineer Sammy Maina Kamau.

In their case filed in December 2024, KBL said, that that’s when Mutuku and JILK began what the brewer described as “a deliberate and systematic scheme of corruption aimed at extorting money from the KBL. This scheme was executed through calculated actions designed to subvert the arbitration process for their benefit.”

KBL said it would later be told that six months before he was appointed as arbitrator, Mutuku had received KSh174 million from JILK. In January 2020, he received a further KSh150 million, which indicated that he had been in business with JILK before he was appointed arbitrator.

“KBL avers that the financial entanglements between Mutuku and JILK, and the suspicious timing of payments collectively point to a deliberate scheme to corruptly influence the arbitration process,” KBL said in its December 2024 filings.

After the arbitrator was appointed, KBL said, JILK inflated the amount in the dispute from KSh163 million to KSh2.4 billion, an increase of 1,372 per cent and way above the KSh1.5 billion budget for civil works at the Kisumu Brewery.

“The grossly inflated sum was introduced immediately after the Mutuku’s appointment, suggesting that JILK anticipated a favorable ruling on an issue that the arbitrator had no jurisdiction to adjudicate,” said KBL.

KBL also stated that Mutuku inflated his fees for the job by charging both KBL and JILK when he should have split the fees.

In one of the invoices, Mutuku had charged for 570 hours spent reviewing documents within 23 days, which would have meant that even if he had worked continuously for 24 hours a day, the total hours would have been 552 hours. He also invoiced for reviewing 40 bundles of documents afresh every time the matter was scheduled for hearing.

When the discrepancies were pointed out, Mutuku resorted to asking for his fees in advance and ignored or dismissed outright requests for clarification on his time.

Asked about the conflict of interest during the arbitration, Mutuku said he had acted as quantity surveyor in a project JILK was undertaking in 2018.

KBL said it was later informed that Mutuku, through his company, Buildnett and Pastor Engineer Sammy Kamau had worked together on projects for Mwalimu Sacco, Kenya Airports Authority, Kenya National Highways Authority and the Export Processing Zones Authority.

The whistleblower also said that the two frequently met at JILK’s offices at Tatu City and were secretly conspiring to ensure they would share the money after the award. Mutuku was also alleged to have been receiving money from JILK as the arbitration continued.

“These allegations painted a disturbing picture of a corrupted arbitration process and raised substantial concerns regarding the conduct of the 1st Respondent (Mutuku) and the integrity of the entire arbitration process, further entrenching the Petitioner’s belief that the current arbitration process cannot provide a fair hearing,” said KBL.

KBL had also enjoined the AAK for its flawed appointment of the arbitrator and the Directorate of Criminal Investigations for failing to investigate the matter despite the apparent corruption. The Commission on Administrative Justice, also known as the Ombudsman, was also enjoined as an interested party.

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