Financially troubled Moi University has received a major reprieve after a contractor withdrew a court case seeking more than Sh1 billion , lifting one of the biggest financial threats hanging over the institution as it battles a deepening debt crisis.
The university secured the vital lifeline after Vishva Builders Ltd withdrew a suit over a Sh185.3 million award that had ballooned to more than Sh1 billion through accumulated interest, following a botched construction project dating back nearly three decades.
The withdrawal comes barely two months after the High Court ordered the attachment of the university's key bank accounts in a bid to recover the debt arising from abandonment of construction of the Faculty of Science Complex at the institution's main campus in Eldoret.
Court records show that Vishva Builders filed a notice withdrawing the suit at the High Court in Eldoret on June 25, 2026. When the matter came up for mention before Justice John Chigiti on June 30, 2026, the contractor informed the court that the dispute had been fully settled.
"Suits are instituted by a plaintiff and defended by a defendant and in this case by Vishva Builders Limited against Moi University. The notice to withdraw the entire suit against the defendant is hereby adopted as an order of the court. This file is marked as settled and consequently the file is closed with each party bearing their own costs," ruled Justice Chigiti.
The judge also dismissed attempts by interested parties to oppose the withdrawal, noting that their legal standing ceased once the principal parties resolved the dispute.
"Where the principal party has lost interest in the suit or where the decretal sum is settled, as is the case here, then the garnishee and or the objectors no longer have any identifiable stake or legal business with the suit," Justice Chigiti ruled.
However, the court spared accounts holding funds earmarked for research and student scholarships.
"Having already found in the earlier ruling that the excluded accounts were opened for specific purposes such as research and student scholarships, good order dictates that I uphold that decision, as I so do," Justice Wananda ruled.
The judge criticised the prolonged litigation, saying it was unacceptable for a commercial dispute of such magnitude to remain unresolved in court for almost 25 years.
Court documents show that Moi University entered into a contract with Vishva Builders on November 13, 1990, for the construction of the Faculty of Science Complex together with ancillary external works at the university's main campus.
The agreed contract price stood at Sh476.3 million after negotiations reduced the initial tender amount from Sh547.7 million.
Construction stalled after the university cited financial constraints and requested the contractor to suspend the works after seven payment certificates had been issued.
The contractor complied, with construction stopping in April 1991 before both parties mutually terminated the contract in November 1999.
The university undertook to settle the contractor's dues once funds became available and after verification by a government task force on pending bills.
According to court documents, the university paid Sh57.2 million, together with a Sh6.3 million retention sum under interim certificates.
By the time work stopped, the project was only about nine per cent complete because the institution could not raise sufficient funds to continue.
The contractor later moved to court and was awarded Sh185.3 million for the terminated contract. Failure by the university to settle the award saw interest accumulate over nearly 25 years, pushing the claim beyond Sh1 billion.
On February 2, 2024, the High Court entered judgment ordering Moi University to pay about Sh1.2 billion after applying interest at prevailing bank rates.
A year later, on February 2, 2025, Vishva Builders obtained a decree for about Sh1.08 billion, reflecting the computed amount due after accrued interest.
The withdrawn case removes one of several financial burdens facing Moi University. The institution continues to grapple with numerous challenges, including a disputed Sh25 million tender for a new gate project and the diversion of Sh7.7 million in student fees into a private account by dishonest employees.
It is also burdened by a Sh3 billion loan taken to modernise New Rivatex, after previously spending Sh600 million to acquire the textile firm.
The university's financial strain has been compounded by declining student enrolment, which dropped from 50,000 in 2015 to 27,000 in 2021, closure of non-viable satellite campuses, reduced government capitation amid rising personnel costs driven by unfunded collective bargaining agreements.
The newly constituted Moi University Council says it has embarked on an ambitious restructuring programme aimed at restoring the institution's financial stability and operational efficiency.
The recovery plan includes infrastructure reorganisation, revenue diversification, staff rationalisation, closure of non-viable campuses and broader cost-cutting measures.
The Auditor-General, Nancy Gathungu, has ordered a forensic audit of the institution's accounts as it has certified outstanding debts estimated at Sh8 billion.
"We have put in place strategies that will ensure that the university does not collapse. Refurbishment of student hostels is ongoing, staff are now receiving salaries on time and the university will soon reclaim its glory," he said.
