APPEAL

Reprieve for MKU in Sh511m dispute case against firm

MKU had appealed against a 2011 decision that found it liable to pay the amount,

In Summary

• The court also ordered Step Up Holdings to provide a Sh511million bank guarantee from a reputable bank within 30 days pending the hearing of the case.

• MKU did not place a legal defence arguing the matter was for arbitration.

Mount Kenya University (MKU) main campus in Thika.
Mount Kenya University (MKU) main campus in Thika.
Image: John Kamau

Mt Kenya University (MKU) has now been given a green light to defend itself in a Sh511million dispute against businessman Bernard Gikunda Mwarania’s firm.

Gikunda owns Step Up Holdings Company.

This is after High judge Hilary Chemitei gave the University 30 days to the applicant to deposit Sh511million in a joint interest-earning account in the names of both counsels pending the hearing and determination of the suit.

 “The applicant shall within 30 days from the date herein deposit Sh511 million in a joint interest-earning account in the names of both counsel for the applicant and the defendant pending the hearing and determination of the suit,” stated Justice Chetimei.

The judge also ruled that the interlocutory judgement entered against the applicant on the defendant on November 17, 2011, be set aside, he ruled.

The court also ordered Step Up Holdings to provide a Sh511million bank guarantee from a reputable bank within 30 days pending the hearing of the case.

The University had appealed against a decision of 2011 that found it liable to pay Sh511 million to Step Up Holdings.

According to court documents, in 2011 MKU and Step Up Holdings entered a verbal agreement to open a branch in Kericho town.

Step Up Holdings had until then run the MKU Nakuru Campus, paying collaborating fees to the university.

Step Up Holdings claims that a month after their verbal agreement, the university forced the firm to close the Kericho Campus, leading to a loss of Sh953,881.

The firm claims the university then illegally took over the campus by relocating 3,807 students and 295 staff to other premises. The court sided with Step Up Holdings and found the university liable for Sh511 million.

MKU did not place a legal defence arguing the matter was for arbitration.

The legal battle rekindles a 10-year dispute over university premises.