Strabag v National Irrigation Authority (Kenya) — DAB Enforcement Quick Guide
Featured snippet: The High Court enforced five Dispute Adjudication Board (DAB) decisions by summary judgment. Notices of Dissatisfaction (NODs) did not excuse the Employer from the “promptly give effect” duty where it failed to move on to amicable settlement/arbitration and did not timely seek a Section 6 stay.
What the Court held (plain-English)
Clause cross-walk (1999 ↔ 2017)
Mini-checklist you can act on
- Serve NOD within 28 days (1999: 20.4; 2017: 21.4) — calendar it.
- Start amicable settlement promptly (1999: 20.5; 2017: 21.5) — set a 56-day window.
- Commence arbitration if unresolved (1999: 20.6; 2017: 21.6). Don’t miss any local Arbitration Act deadlines for stay.
- Comply with DB/DAAB decision pending final outcome (1999: 20.4/20.7; 2017: 21.4/21.7).
Sources (highlighted)
Key Legal Issues — Strabag v National Irrigation Authority (Kenya)
Featured snippet: The High Court treated the five DAB decisions as binding obligations under FIDIC’s “pay now, argue later” architecture. Notices of Dissatisfaction did not suspend payment, and the Employer’s failure to promptly pursue amicable settlement → arbitration (and to seek an early stay) left no triable defence to a liquidated claim—making the matter apt for summary judgment.
1) Premature court action vs contractual dispute resolution
Could Strabag go to court before completing amicable negotiations and arbitration under FIDIC Clause 20.5 → 20.6? The Court framed this as a jurisdiction/admissibility question. The answer turned on the nature of what was being enforced: a binding DAB decision—which must be given effect “promptly” unless and until revised by amicable settlement or arbitral award. In short, the contract’s multi-tier process governs finality, but does not erase the interim payment obligation.
2) Effect of Notices of Dissatisfaction (NOD)
An NOD prevents a DAB decision from becoming final, but it stays binding until revised. The Employer argued that NODs pushed the dispute into arbitration first; Strabag argued binding effect was still enforceable. The Court’s approach aligns with “pay now, argue later”: an NOD triggers the amicable → arbitration track for final determination, yet the interim payment duty remains.
3) Summary judgment vs. “triable issue”
Strabag sought summary judgment for a liquidated sum reflected in the five DAB decisions. The Employer pointed to the arbitration clause and a general denial. The Court considered whether any of that created a genuine triable defence. Where the sums are crystallised by binding DAB decisions and the resisting party has not diligently advanced the contract’s dispute steps, mere references to arbitration do not, by themselves, defeat summary disposal.
4) Waiver of arbitration right (Section 6 stay timing)
Under Kenya’s Arbitration Act, a party relying on an arbitration agreement should apply for a stay no later than when entering appearance. Here, the Employer entered appearance and even filed a defence but did not seek a timely stay. The Court viewed this as making the “go to arbitration” objection stale, allowing the court process on enforcement to proceed.
Mini-checklist (1999 ↔ 2017 references)
Court’s Ruling & Reasoning — Strabag v National Irrigation Authority (Kenya)
Featured snippet: The High Court (Mabeya J) granted summary judgment compelling payment of the five DAB awards, plus interest and costs. The Employer did not timely invoke arbitration (no Section 6 stay on appearance) and raised no other triable defence. The DAB decisions remained binding—and effectively final in context—so the court enforced the “pay now, argue later” architecture.
Arbitration not invoked in time (Section 6)
The Employer failed to apply for a stay of proceedings and referral to arbitration at the time of entering appearance as required by Section 6 of the Arbitration Act. By the time the arbitration point was raised, the statutory window had closed, making the objection stale. The court therefore proceeded without any bar from the arbitration clause.
No other triable defence
The Employer admitted the five DAB decisions existed and did not dispute the sums. No allegations of fraud or procedural irregularity were advanced. With the arbitration objection dismissed, the defence lacked a genuine triable issue—leaving a liquidated claim suitable for Order 36 summary judgment.
Status of the DAB decisions
Under FIDIC 20.4 → 20.6, DAB decisions are binding and must be promptly given effect unless revised by amicable settlement or arbitral award. Here, NODs were served but no amicable settlement or arbitration followed within the contractual timelines—and the Employer did not seek a stay when sued. The decisions therefore remained in force and were treated as the definitive basis for payment.
“Pay now, argue later” applied
The court enforced the interim architecture of FIDIC adjudication: pay first, argue later in arbitration if desired. Allowing the Employer to avoid payment and avoid arbitration would hollow out the contractual system, so the court granted relief to prevent that outcome.
Orders granted
Judgment entered for Strabag: payment of the adjudicated sums (per plaint), interest at court rate from the date of judgment until full payment, and costs of the suit.
Mini‑checklist (counsel’s quick actions)
Implications for FIDIC Contracts & Dispute Resolution
Featured snippet: Kenyan courts will enforce binding DAB decisions to protect cash flow unless a dissatisfied party diligently pursues amicable settlement → arbitration. A late or half‑hearted arbitration stance risks waiver, leaving DAB outcomes enforceable via summary judgment.
1) Enforcement of Dispute Board decisions
DAB decisions are “binding, even if not final”. Where the losing party neither pays nor advances the contract’s next steps, Kenyan courts may grant summary judgment to enforce payment. This strengthens the “pay now, argue later” spine of FIDIC and improves cash‑flow certainty for contractors.
2) Follow the multi‑tier sequence (NOD → amicable → arbitration)
A Notice of Dissatisfaction stops finality, not binding effect. To preserve your challenge, you must move promptly to amicable settlement (often a 56‑day window) and then commence arbitration if unresolved. Sleeping on these steps leaves the DAB decision in force and ripe for enforcement.
3) Arbitration clause ≠ automatic shield (waiver by inaction)
Under Kenya’s Arbitration Act, you must seek a stay no later than appearance if you intend to arbitrate. A tardy request can be treated as waiver, letting the court enforce the DAB outcome. Courts will not allow tactical delay to undermine the contract’s dispute architecture.
4) Courts encourage DABs/DAABs and ADR
By enforcing the outcomes of contract‑based adjudication, Kenyan courts signal that DABs/DAABs matter. Employers are incentivised to comply—or to swiftly move to arbitration—rather than ignore determinations. Contractors gain confidence that adjudication is a meaningful gateway to recovery.
5) Momentum for adjudication reform
Commentary notes that Kenya lacks a statutory 28‑day adjudication regime like the UK. Yet this case shows courts can still give teeth to contract adjudication. Expect renewed debate on statutory adjudication to increase speed and predictability for payment disputes.
Mini‑checklist (contract manager’s actions)
Commentary & Reaction — Strabag v National Irrigation Authority
Featured snippet: Kenyan legal and construction circles view Strabag v NIA as a pro-enforcement milestone: courts will give teeth to binding (even if not final) DAB decisions and expect parties to prosecute the FIDIC sequence—NOD → amicable → arbitration—without delay.
Legal community response
Commentators praise the court’s “no-nonsense” fidelity to the contract. By compelling compliance with the DAB awards, the judgment vindicates FIDIC’s structure and Kenyan arbitration law’s timelines. The emphasis on the 56‑day amicable window and timely arbitration is seen as a faithful reading of the Conditions.
Construction industry reaction
Contractors, engineers, and QS teams welcome the cash‑flow certainty: a neutral DAB decision can translate to a court‑enforceable outcome if the loser neither pays nor arbitrates. Employers are on notice—NOD without follow‑through is a risky strategy.
FIDIC & ADR experts
Specialists call this a teachable moment: draft Particular Conditions that reinforce compliance with DAB/DAAB decisions and clarify consequences for non‑payment. The approach aligns with international trends favouring interim enforcement while preserving the right to arbitrate merits.
Ongoing developments
The decision is already cited as persuasive authority. Reports indicate that NIA has appealed, and the sector is watching for confirmation or refinement. Meanwhile, the High Court’s ruling stands as a strong signal that Kenyan courts will keep FIDIC projects moving.