Court gives NHIF 7 days to award Mututho’s firm new contract

By , K24 Digital
On Mon, 22 Apr, 2024 18:13 | 4 mins read
NHIF offices in Nairobi.
NHIF offices in Nairobi. PHOTO/NHIF

A judge has given the National Health Insurance Fund (NHIF) board and its Chief Executive Officer (CEO) seven days to comply with a High Court order to renew a medical insurance contract to a firm belonging to former NACADA chairman John Mututho.

Justice Josephine Mongare of Milimani High Court, Commercial and Tax Division On Monday, April 22, 2024, ordered the NHIF board and CEO Elijah Wachira to fully comply with her order issued on February 6, 2024, in favour of Mututho's firm JOMEC Limited within a week.

"I hereby caution parties of the seriousness of the contempt proceedings and direct the NHIF Board and its CEO to strictly comply with the Consent Court Order dated February 6, 2024, without fail. The matter will be mentioned on Monday, April 29, 2024, to confirm full compliance by NHIF," the judge stated.

The new directive by Justice Mongare comes after the NHIF lawyer Brian Odongo apologized to the court for failure to honour court orders and urged to be given more time to comply with her order.

"Your honour, I apologised for the contempt by NHIF and I undertake to purge the contempt by issuing the relevant new service agreement to JOMEC Limited within one week," lawyer Odongo stated.

The judge gave the directive following a contempt of court application filed by Mututho's firm JOMEC Limited on Thursday last week accusing the NHIF board and CEO Wachira of disregarding court orders to execute new service delivery agreements for the provision of medical health services by the firm's health facility.

Mututho wants Wachira and NHIF board found guilty and sentenced of contempt of court on grounds that they have refused to facilitate the renewal of the service delivery agreement for the provision of medical health services as gazetted at JOMEC's health facility as earlier ordered by the court

The documents filed in court show that through a consent of court dated January 2, 2024, and filed before Justice Mongare on February 5, 2024, JOMEC and NHIF entered into an agreement to settle the matter on condition of settlement of an all-inclusive sum of Ksh188,277,911 in full and final settlement in one instalment.

Further, the consent orders provided that both NHIF and JOMEC “shall execute new service delivery agreements for the provision of medical health services” as gazetted at JOMEC’s health facility within the legal framework and regulations governing NHIF.

Justice Mongare adopted the consent filed in court by the two parties and directed the order be served to four NHIF accounts domiciled at the National Bank of Kenya, Co-operative Bank of Kenya Limited, Equity Bank and Kenya Commercial Bank to facilitate the payment totalling to Ksh350 million being accrued damages and damages legal fees to JOMEC limited.

The court papers reveal that NHIF has only complied with one order, where they paid Mututho's company the millions of shillings owned by the insurer and now want the NHIF board and CEO committed to civil jail for contempt of court for failure to comply with the second order to renew its contract.

“The respondent has only complied with Order 1 (2) of the said Consent Order and has hitherto failed and/or refused to comply with the Consent Order 1(3) of the subject Consent Order that requires both the applicant and the respondent through the facilitation of the contemnor to execute new service delivery agreements for the provision of medical health services as gazette at the applicant’s health facility within the legal framework and regulations,” Mututho in his affidavit filed in court.

NHIF CEO's letter

The former NACADA chairman says that through a letter dated April 9, 2024, NHIF CEO Wachira wrote to his company’s lawyer vide correspondence reference number HF/HQ/LEG/5/138 Vol (7) saying the Fund is unable to execute the new service delivery agreements cited in the consent registered at the High Court citing the transition clauses of NHIF to the Social Health Authority (SHA).

“As part of these guidelines, the contracting authority of the NHIF Board has been aligned to its mandate to wind up the Fund under the First Schedule of the Social Health Insurance Act. Therefore, the Fund is unable to enter into a new contract for the provision of healthcare services, however, your client Messers JOMEC will be engaged during the next contracting cycle,” the letter addressed to Wachira & Mumbi Advocates read in part.

An affidavit filed in court by Mututho adds that the contents of the letter indeed confirm that the board and Wachira'a uncanny behaviour and intent to keep parties including the court in endless litigation through their contemptuous demeanour, an art they seem to have perfected since the inception of the lawsuit.

"It is noteworthy that the respondent's Chief Executive Officer, the contemnor herein, played a pivotal role in the negotiations leading to the consent. At the time of the negotiations, the respondent and the contemnor knew too well that the Social Health Insurance Act was in place but nevertheless went ahead and executed the consent," the former NACADA chairperson says.

As per the contemnor's letter, Mututho states there is an evident and so obvious attempt by the NHIF to use the ongoing transition processes to avoid the mandatory legal requirement for issuance of the medical contracts

"The fact remains clear that the Social Health Insurance Act. No. 16 of 2023. enacted on October 19, 2023, came into force on November 22, 2023, while the consent was executed on February 5, 2024," He says adding undoubtedly, the NHIF board and the CEO were aware of all matters attendant to the laws and cannot now choose a different trajectory by making a mockery of the consent orders of the court

Despite service upon the NHIF Board and its CEO, Mututho contends that they have wilfully and blatantly disregarded the court orders and have failed, neglected and or refused to comply with the same without any justifiable cause at all.

"That as a result of the respondent and contemnors refusal to comply with the Court's Consent Orders, the applicant has been unable to offer NHIF services to its patients despite having complied with the necessary regulatory framework and obtained all the requisite approvals, permits and certificates," Mututho says.

Further, He says that his company stands to suffer immense losses as a result of omissions occasioned by NHIF's declining to issue JOMEC with the service delivery contracts where it was agreed that it shall recover the waived sum of Ksh166.086.533.81 from the intended service delivery contracts.

"No legal justification has been tendered by the Respondent and or the Contemnor for their disobedient conduct, and in the absence of legitimate grounds, the Respondent's disobedience may properly be described as contempt of Court. l, therefore, Seek the court to summon the NHIF board and its CEO to show cause why they should not be committed to civil jail for blatantly failing to comply with a court order," Mututho says.

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