391. While the Tribunal agrees with the Government in respect of its “illegality objection”, it is
nevertheless deeply concerned about the vague terms in which the allegation of corruption was
made, and the lack of evidence given in support. The Government relied largely on surmise and
speculation. However, shortly before the Hearing on the merits in Dubai, the Claimants produced
a witness statement from Mr. Masibo dated 17 November 2017. The appearance of Mr. Masibo
401
Mr. Saba Fakes v. Republic of Turkey, ICSID Case No. ARB/07/20, Award, 14 July 2010, CL-52, paras. 152-155.
142
as the Claimants’ witness ought to have given the Respondent an opportunity to prove its
corruption case if there was such a case to prove.
392. Mr. Masibo’s statement gave rise to numerous issues, but despite the Claimants’ request
for additional documents in relation to what Mr. Masibo had said (or not said) in his witness
statement, it was not until Day 4 of the Hearing that the Government belatedly produced three
documents to the Claimants
402
which included two statements that Mr. Masibo had previously
given to the Kenyan authorities shortly after the events in question, namely on 22 November 2013
(Exhibit R-254) and a further statement of the same date (Exhibit R-255), both of which were
highly relevant.
393. In addition, the Government belatedly produced a transcript of proceedings against Mr.
Masibo in the Chief Magistrate’s Court at Milimani Law Courts, Criminal Case No. 1087 of 2017
(Exhibit R-253).
394. In the course of the Hearing, the Tribunal learned from a Government witness, Mr.
Raymond Mutiso, that he had testified in the prosecution of Mr. Masibo on 20 December 2017.
The Government did not produce a transcript of this testimony.
395. In addition, and regrettably, when Mr. Masibo was cross-examined, the Government chose
not to put to him questions regarding the allegations of corruption even though such allegations
lay at the heart of the Government’s case against the Claimants. This omission was manifestly
unfair both to Mr. Masibo and the Claimants.
402
See Tr. Day 4, p. 43.
143
396. Even more egregiously, despite having failed to give Mr. Masibo an opportunity to defend
himself in the witness box, the Government persisted in its Closing Submissions to seek a finding
that Mr. Masibo had acted corruptly on the basis of “red flags” of circumstantial evidence. Mr.
Masibo ought to have been given the opportunity in cross-examination to explain away, if he could,
the allegations made against him.
397. Allegations of corruption were also made against Mr. Jacob Juma, but these too were
essentially unsubstantiated apart from some evidence that in the past Mr. Juma had provided
relatively modest amounts of money (in the neighbourhood of US $1,500.00) from time to time to
Government officials in pursuit of his various projects. None of this evidence in respect of Mr.
Juma related to the events at issue in this arbitration.
398. Essentially, the Government’s case came down to the proposition that Mr. Masibo had
conducted himself in office with such gross inconsistency and inexplicable haste as well as
disregard for his statutory duties starting from the time Mr. Jacob Juma became involved with
Mrima Hill, that the only rational explanation for his misconduct must be corruption.
399. In the Tribunal’s view, it is not appropriate for a Party to make such serious allegations of
corruption and then not only fail to support it with credible evidence but to withhold from the
opposing party documents which shed significant light on the conduct of the individual (Mr.
Masibo) at the center of the bribery allegations.
400. Accordingly, in considering the disposition of costs, notwithstanding that the Government
succeeded in its “illegality objection”, the Tribunal wishes nevertheless to express its concern at
the excessive level of the Government’s claimed costs and, more importantly, its disapproval of
the Government’s conduct of the corruption allegations.
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401. In the circumstances, the Tribunal declines to grant the Respondent’s claim for costs of US
$6,452,858.42 but reduces the award by 50%. In the result, the Government will be entitled to
recover costs in the sum of US $3,226,429.21.
402. The costs of the arbitration, including the fees and expenses of the Tribunal, ICSID’s
administrative fees and direct expenses, amount to (in US $):
Arbitrators’ fees and expenses
Ian Binnie
Kanaga Dharmananda
Brigitte Stern
136,113.50
106,432.42
161,682.79
ICSID’s administrative fees 106,000.00
Direct expenses 134,893.57
Total 645,122.28
403. The above costs have been paid out of the advances made by the Parties in equal parts.
403
As a result, each Party’s share of the costs of arbitration amounts to US $322,561.14.
404. The Tribunal orders the Claimants to pay the Respondent US $322,561.14 for the expended
portion of the Respondent’s advances to ICSID.
