The Nairobi Hospital has moved to the High Court to stop insolvency proceedings initiated by security systems supplier Opticom (K) Limited over a disputed Sh32 million debt.
The hospital, through lawyer Moses Owuor, says the petition should be struck out to avert its being exposed to financial and operational jeopardy, which it says has an undesirable effect on the vulnerable patients it serves.
In its affidavits, the Nairobi Hospital holds that the petition is premature given the nature of the contract, which required arbitration in case of a dispute.
“The jurisdiction of this court has been invoked prematurely and the petitioner’s suit amounts to overkill and is otherwise an abuse of the court process,” the hospital says.
The dispute involves a tender worth Sh51 million for the supply and installation of pedestrian and baggage security scanners at the hospital.
The tender, awarded in December 2022, specified the delivery of Astrophysics XIS-3335 or an equal brand subject to the approval of the hospital. The duration of the project was 11 weeks.
Nairobi Hospital says that in September 2023, Opticom delivered and installed a different brand, Eastmage-E15536, in breach of its contractual obligations and without prior approval from the hospital as was agreed.
On December 8, 2023, after inspecting the equipment supplied and finding it unsuitable for its use, the hospital wrote to Opticom demanding that it be uninstalled and what was agreed upon delivered within 14 days.
“Instead of heeding the demand and despite its clear breach of contract, the petitioner responded with a counter-demand dated December 8, 2023 seeking full payment of the balance of Sh32,219,747.74 which is the disputed debt,” the hospital says.
The matter escalated to court after Opticom filed a petition for insolvency against the Nairobi Hospital, which the facility is now fighting to strike out.
Owuor says the court is not the proper forum to determine the dispute, claiming the hospital had the contractual right and obligation to declare a dispute and have the same determined by an arbitrator.
“This honourable court is not the proper forum to determine the suitability of the equipment supplied by the petitioner, the veracity of the concerns raised by the applicant herein and the sufficiency of the justifications offered by the petitioner for supplying the wrong equipment,” Owuor says.
Nairobi Hospital CEO Felix Osano maintained that the dispute should follow the contractual arbitration processes and that no payment is due for non-compliant equipment.
Justice Peter Mulwa on Monday declined to certify the matter urgent but directed the parties serve and file their responses pending further directions on November 6.
Meanwhile, a case management session on the same—before Deputy Registrar Adisa Chembesi—on Wednesday agreed that the matter was urgent and that the parties appear before the judge on September 24, after courts resume from their current recess.
Nairobi Hospital wants the court to suspend the liquidation proceedings, saying they threaten essential healthcare services.
“The existence of these proceedings threaten its credibility and ability to access services, infrastructure and products that are necessary for its optimal functioning.”
