The London Court of International Arbitration (LCIA) has fined former central bank governor Nahashon Nyaga, Bidco CEO Vimal Shah, and businessman Stephen Mwagiru Sh1.7 billion for dishonestly claiming to have paid Sh2 billion to Socfinaf, the former owner of 10,000 acres that Tatu City developer Rendeavour acquired.
The ruling could see the ownership of Tatu City, a multi-purpose development in Ruiru, Kiambu County, settled for good.
Rendeavour, through Cyprus-based company SCF Holdings II Limited (SCF), initiated the arbitration case against Manhattan Coffee International Holding (MCIH), the company through which Shah, Mwagiru, and Nyaga hold their Tatu City shares which are now in question.
The court’s arbitrator, Mr Simon Nesbitt QC ruled SCF had proved the claims of misrepresentation which validated the award of damages against the Kenyan trio.
The Court’s Ruling
MCIH was found to be in breach of the Deposit Advance Agreement entered with SCF on June 2008 and was liable to pay Sh1 billion for misrepresentation and damages. In addition, the court ordered the trio to pay interests on the sum from 2008 and the arbitration cost bringing the total amount to Sh1.7 billion.
“It is now common ground that the representation was false. Neither party asserts that the deposit was paid. Accordingly, it is unnecessary to draw an inference from their refusal to explain what arrangement, if any, had been made with the sellers on their principals or what that arrangement might have been,” the court ruled.
The arbitrator found that Mwagiru’s evidence was unsatisfactory despite denying having made the representation and that earlier in the arbitration he had agreed that the deposit was paid.
There was also a record of Shah saying that a deposit had been paid to the sellers after discussions between Mwagiru and Nyaga.
Additionally, the court discovered that the trio lied to the owner of SCF Stephen Jennings that his deposits to Tatu City were discounted.
“They misled the claimant that a payment of Sh2 billion had already been made to the sellers. I am, therefore, satisfied that the claimant has proved that by entering into the agreement with the Kenyan partners, he suffered a loss of US$10.5 million,” Nesbitt said.
According to the court, the trio failed to show the court that they had paid the $20 million to the sellers.