Equity blocks Passaris’ Sh35.8m pay

Businesswoman Esther Passaris. Equity Bank claims that an award to Ms Passaris’ firm, Adopt A Light, was based on a re-drafted contract. Photo/FILE 

By GALGALLO FAYO

In Summary

• Equity Bank claims that the award to Ms Passaris’ firm, Adopt A Light Limited, was based on a re-drafted contract.
• The lender alleges that the arbitrator ignored the word ‘‘all’’ in one of the clauses in the advertising contract signed on July 2006, thus making it liable for claims of a breach of contract.
• Details of the advertising deal were not provided, but Adopt A Light has been providing outdoor publicity. The arbitrators found that the lender breached the contract and held that Adopt A Light performed part of the agreement.

Equity Bank is in court to block payment of Sh35.8 million to Esther Passaris following an arbitration that awarded the business woman the amount for a botched advertising deal.

The Nairobi bourse listed bank claims that the award to Ms Passaris’ firm, Adopt A Light Limited, was based on a re-drafted contract.

The lender alleges that the arbitrator ignored the word ‘‘all’’ in one of the clauses in the advertising contract signed on July 2006, thus making it liable for claims of a breach of contract.

The arbitrators — including lawyers Njoroge Regeru, Njeri Kariuki and Ahmednasir  Abdullahi — awarded Adopt A Light Sh30.9 million in June and interest of Sh4.9 million.

“By proceeding to impose or replace the word ‘all’ with the respondent’s ‘modus operandi’  the Arbitral Tribunal effectively placed on the applicant what they were avoiding to place on the respondent; an unconscionable burden,” says Equity in court documents.

The lender claims that the skewed interpretation of the agreement meant that the second phase of the advertising deal had kicked off, hence exposing the bank to higher liabilities.

“It is against public policy for a court or arbitral tribunal to re-write a contract between parties,” says Equity, adding that full payment under the contract should not have been awarded since the contract was terminated before commencement of the second phase.

Details of the advertising deal were not provided, but Adopt A Light has been providing outdoor publicity. The arbitrators found that the lender breached the contract and held that Adopt A Light performed part of the agreement.

“The respondents (Adopt A Light) represented to the applicant that it had the required statutory approvals and consents including the consents of City Council of Nairobi to erect and maintain poles, billboards and masts within the City of Nairobi,” says Equity Bank.

Adopt A Light is yet to respond. The lender moved to the High Court under certificate of urgency arguing that the advertising firm had commenced the process to enforce the award. Commercial Court judge Eric Ogolla ruled that the matter was not urgent and directed the bank to get the hearing date from registry on priority basis.

“Pending the inter-parties hearing and determination of this application, there will be a stay of execution and or further proceedings arising from the award of the arbitral tribunal,” states Equity.

Adopt A Light has separately been fighting with the Kenya National Highways Authority over plans to pull down its billboards.

READ: Adopt-a-Light wins reprieve in billboards row