Consequences of sharing SGR contracts worry Kenyans

Kenya could pay dearly for violation of the strict confidentiality terms of the contracts which give China sweeping powers.

Chinese workers on a railway track

Speculation is rife over the consequences of the decision taken by Roads and Transport CS Kipchumba Murkomen to publicise the agreements signed in the award of the Standard Gauge Railway project.

The agreements were entered into between the China Exim Bank, National Treasury, Kenya Railways Corporation and Kenya Ports Authority to facilitate the construction of the SRG from Mombasa to Naivasha.

CS Murkomen had earlier promised to share the documents - that have been shrouded in secrecy with Kenyans, despite the strict confidentiality terms.

Saboti Member of Parliament Caleb Amisi, who is also a member of the Defence & Foreign Relations Committee, said he is fearful that Kenya could pay dearly for any violation.

We broke a clause on confidentiality in the China Vs Kenya SGR contract. A beggar has no choice. We could pay dearly for this! ” he said in a post.

According to the agreements revealed, Kenya had committed to maintaining secrecy, which explains why retired President Uhuru Kenyatta’s administration kept the documents concealed.

A promise by Kenyatta to personally share the contracts did not amount to much.

"The borrower (National Treasury) shall keep all the terms and conditions hereunder in connection with this agreement strictly confidential.

Without the prior written consent of the lender, the borrower shall not disclose any information hereunder or in connection with this agreement to any third party unless required by applicable law,” reads the confidentiality clause in the contract.

The consequences of a breach of confidentiality include dealing with the ramifications of lawsuits, as well as loss of business relationships.

It is not clear whether CS Murkomen had received written consent from China Exim Bank before sharing the contracts.

Earlier in May 2022, The High Court in Mombasa ordered the government to provide two activists with agreements relating to the construction of the SGR.

Despite the project being undertaken in Kenya, the documents reveal that the contracts are governed by Chinese law.

This means that should a dispute arise regarding breach of confidentiality, arbitration would be done in China, which would have the last word.

Clause 15.1 of the agreement stipulated the governing law; “This agreement and the rights and obligations of the parties hereunder shall in all aspects be governed by and construed in accordance with the laws of China."

Clause 15.3 further stated that disputes that could not be resolved by friendly consultations, would be submitted to the China International Economic and Trade Arbitration Commission.

The agreement added that any arbitration shall take place in Beijing and any awards shall be final and binding upon both parties.

A number of Kenyans have expressed worry over the consequences of the contracts publication, but many also say it is within their right as Kenyans to know the contents in the agreements.

"Of course the public have the right to know but release of the contract contravenes disclosure provisions in the contract. Kenya cannot disclose content of contracts without creditor consent. Now watch a crisis unfold. China will severely punish KE for breach of confidentiality," banker Mohamed Wehliye said.

"It’s public information and under article 35 of the constitution of Kenya it’s a right; 35(1a) and (3). Murkomen was right to release the information. China can do whatever it pleases," Narok Senator Ledama Ole Kina said.

"I have just scanned through the SGR documents, and it has shown that the dispute will be resolved in Beijing; it will apply Chinese law, and it’s quite skewed against Kenya," National Assembly Deputy Speaker Gladys Boss Shollei said.

"The contract was between GoK and China's Exim bank. The government was operating on behalf of, and with the authority of the people of Kenya. Why would it be in breach if the people on whose behalf the loan was taken were to know the details of the agreement?" wondered Wagacire.

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