By Our Law Team on August 25, 2025
Construction is a field of frequent conflict: unpaid progress certificates, defective workmanship, project abandonment, delays and cost overruns, and disputes between developers, contractors, architects and engineers. How the dispute is resolved depends almost entirely on the contract and the stage of the project.
A clear written contract with a payment schedule, variation procedure, defect liability period and dispute mechanism prevents most disputes. Our construction lawyers in Nairobi draft and review building contracts before you sign, protecting developers and contractors alike.
Before choosing a forum or a remedy, map the contractual chain. A typical project involves the employer or developer, a main contractor, specialist subcontractors and suppliers, and a team of consultants - architect, engineer, quantity surveyor and project manager. Each relationship is a separate contract with its own payment terms, notice provisions and dispute clause. A claim that is strong against the main contractor may be unenforceable against a subcontractor, and the reverse, unless a collateral warranty or direct agreement connects the parties.
Funders add another layer. Where a bank or development finance institution is involved, the facility agreement usually obliges the employer to maintain insurance, obtain consent before varying the contract and preserve the funder's rights against contractors and consultants. A dispute pursued in breach of those requirements can trigger a default, so lenders should be brought into the strategy early - usually through their security trustee.
Most building disputes in Kenya are decided on the documents. The contract may be a standard form - Joint Building Council (JBC) conditions, FIDIC, or an institution form such as those published by the Architectural Association of Kenya - or a bespoke agreement assembled from a tender, bills of quantities and a letter of award. Whichever it is, the first questions never change: what was promised, what was paid, what notice was given, and within what time.
Reading the contract first frequently changes the strategy. The cheapest win is usually the claim that was noticed, documented and certified exactly as the contract the parties signed requires.
Unpaid interim certificates are the most common construction dispute in Kenya. The analysis is mechanical once the contract is to hand: was the application made in time, did the consultant certify it, was the certificate issued, and did the employer pay within the payment period? Where the employer deducts for alleged defects or delay, the question becomes whether the contract permits that set-off or whether it must first be established by agreement or an award.
Contractors should also watch retention, which is held to secure performance and defects and released in stages, and the release of any performance bond, advance payment bond or bank guarantee. Where the employer is a state body or county government, payment may be subject to the Public Procurement and Asset Disposal Act and internal approval processes - which is why a statutory demand or insolvency route is sometimes faster than waiting.
Delay claims are where construction disputes are won or lost. A contractor seeking more time must usually give notice of the delay event within a defined period, show that the event was not its own fault, and demonstrate the effect on the completion date through an updated programme. An employer claiming liquidated damages for late completion must show that the delay was critical and that it did not waive or contribute to it. Where both parties are at fault, the outcome turns on the contract wording and the quality of the programme evidence.
Watch the mechanics as closely as the merits: the rate and cap of liquidated damages, any notice the employer must give before deducting them, the validity of any extension of the construction period, and the effect of instructed acceleration or variations. These are all documents, and they are usually all in the contract.
Defective or incomplete work is the second-largest source of construction conflict. The employer inspects at practical completion, issues a snag or punch list, and holds retention through the defects liability period. Contractors, in turn, may dispute whether the work departs from the specification, whether the defect arises from workmanship or design, and whether the employer's own instructions, materials or interference caused it. A quantity surveyor's or engineer's assessment of the cost of rectification is normally decisive, and latent defects that appear after the defects period can still found a claim while the limitation period runs.
Once a project ends, memories fade and site teams disperse. The party that kept the best contemporaneous records usually wins: site diaries and daily returns, dated photographs and video, minutes of site and progress meetings, instruction registers, variation orders, delivery notes, correspondence, payment records, and approved programmes with their updates. Where a dispute is already brewing, preserve electronic records before mailboxes are closed and avoid informal site agreements that are never recorded in writing.
Two clocks run in every construction dispute. The first is contractual - the notice periods and limitation clauses in the contract, which can extinguish a claim if missed. The second is statutory: a claim founded on a contract generally has to be brought within six years, and a claim in tort, such as negligence or nuisance, within three years. Arbitration agreements carry their own time bars. Diarise the dates as soon as a problem appears, not after the final account is agreed.
Caught in a construction dispute? Get the right forum and strategy from day one - book a consultation with our construction law team.
