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{
    "id": 116508,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/116508/?format=api",
    "text_counter": 140,
    "type": "other",
    "speaker_name": "",
    "speaker_title": "",
    "speaker": null,
    "content": "Following this agreement, ICS Limited rendered some services namely; import verification, data capture and paper trail audit and submitted invoices to claim payment. However, not all claims could be paid before verification had been made and, therefore, many invoices remained outstanding awaiting this verification. Mr. Speaker, Sir, in the year 2000, the Ministry of Finance analyzed the services rendered by ICS Company Limited against contractual obligations for the Novation Agreement. The analysis unearthed a number of inconsistencies, notably that: (a) The ICS Company had invoiced the Ministry of Finance using Customs clean report of findings that were not in the PSI data base. (b) ICS Company was not able to conduct the paper trail audit as specified in the contract since they were not able to obtain data from PSI. (c) The ICS had prepared paper trail audit reports for other remaining months based on different data and not on the data from PSI after expiring of the contract and submitted invoices to the Kenya Government for payment. Mr. Speaker, Sir, the above-mentioned inconsistencies led to the rejection of the paper trail audit reports including CCRFs by the Government since they were invoiced outside the contractual obligation. The Government and ICS mutually agreed to verify the invoices for the entire contract period and accordingly reduced the amounts claimable and payable. Consistent with this, the parties also agreed that invoices for December, 2000 and January 2001 would also be subjected to similar verifications. Mr. Speaker, Sir, afterwards, ICS accused the Government of failing to facilitate the verification activities as per the contract obligations and consequently failing to pay ICS for services allegedly rendered under the contract. ICS subsequently presented the matter for arbitration in accordance with the clauses in the Novation Agreement. The Attorney-General identified counsels who represented the Government at the arbitration tribunal. Witnesses were also called, one officer each from the Economic Affairs Department at the Treasury, the Kenya Revenue Authority (KRA) and the Kenya National Audit Office (KENAO) who prepared the audit report that led to the stoppage of payments. Both parties were given ample time and opportunity to prepare and make submissions to the arbitration tribunal in Case No.14444/EBS/VRO at the International Chamber of Commerce, International Court of Arbitration, ICC involving Inspection and Control Services Limited, UK; versus the Ministry of Finance of the Government of Kenya. The Arbitration Tribunal, after full hearing of the dispute on 4th September, 2008, dismissed the defence of the Ministry of Finance and decided the case in favor of ICS. The Government was ordered to pay ICS a sum of US $6.9 million (approximately Kshs538 million) as fees due for services rendered under the contract agreement plus interest of 4.65 per cent compounded annually from 28th June, 2006. Mr. Speaker, Sir, the Government was also ordered to pay to ICS a further sum of US$2,259,943.71 (approximately Kshs176 million) as cost to cover arbitration and related legal fees. I wish to summarize the facts of the issue at hand as follows:- The award against the Ministry of Finance was based on alleged breaches of a contract dated 3rd September, 1998. As I have explained, the contract was for the verification of imports into Kenya between the Ministry of Finance and SWIPCO-SA. of Switzerland and the Novation"
}