The Kenya Airports Authority (KAA) has suffered a major financial setback after the High Court ordered it to pay contractor Doch Company Limited more than KSh1.25 billion in damages over the termination of a KSh398.9 million Nanyuki Airstrip rehabilitation contract.
The court dismissed KAA’s attempt to overturn the arbitration award after finding that the agency missed the statutory deadline for challenging it, exposing the state corporation to mounting interest charges.
The dispute dates back to September 3, 2014, when KAA awarded Doch the contract to rehabilitate the airstrip’s runway, apron and car park. The project was initially expected to take 12 months, with completion scheduled for November 2015.
However, progress remained slow, reaching only 42 per cent by July 2016, despite a nine-month extension to the contract.
KAA terminated the agreement on August 22, 2016, citing concerns over implementation. Doch challenged the decision, arguing that the termination was unlawful and seeking compensation for the resulting losses. The disagreement proceeded to arbitration under the contract’s dispute-resolution provisions.
The arbitrator issued an award in favour of Doch on March 18, 2022. Under the ruling, KAA was required to pay approximately KSh1.25 billion in damages, together with simple interest at 16 per cent annually from the date of the award until full payment.
The legal setback arose when KAA applied to have the award set aside on June 16, 2025, arguing that the damages and interest were excessive, the award offended public policy and the arbitrator had exceeded the scope of the dispute.
The court found that the agency had been notified on March 18, 2022, that the award was ready for collection, triggering a three-month period for challenging it.
The judge rejected KAA’s explanation for the delay, noting that the agency had not provided a plausible account for failing to complete the process earlier.
The court also ruled that the size of the award compared with the original contract value did not, by itself, establish unjust enrichment or a breach of public-finance principles. KAA’s application was struck out, allowing Doch’s enforcement application to proceed.
The financial exposure has grown considerably because of the interest provision. Using the daily interest figure cited in the judgment, the principal and accumulated interest reached approximately KSh2 billion by October 8, 2026, excluding costs.
The case also revives concerns raised in earlier audits over contract management, additional works and delays at the airstrip. For KAA, the immediate challenge is meeting the court-ordered liability, while the wider lesson concerns the cost to public funds when contract disputes and legal deadlines are not handled promptly.
