Blow for Pipeline in Sh4bn row with Lebanese tycoon

The Court of Appeal has rejected an application by Kenya Pipeline Company (KPC) to temporarily suspend payment of Sh4.4 billion to a Lebanese company that constructed the Mombasa-Nairobi pipeline.

A bench of three judges said KPC failed to convince them that the appeal will be rendered “useless”, if the demand for payment is not stopped. The judges said there was uncontroverted evidence that Zakhem International Construction Ltd completed the works and handed the pipeline to the state agency.

“As the execution is in regard to a liquidated amount, there is no way the appeal, if successful will be rendered nugatory,” Justices Roselyn Nambuye, Wanjiru Karanja and Hannah Okwengu said.

In June, Justice Grace Nzioka directed KPC to pay the amount within 30 days, pending the resolution of other matters, touching on the construction of the pipeline four years ago.

“Taking into account the aforesaid and evidence herein in total, I find and hold the applicants claim of EOT 1-4 is not in dispute and therefore, I enter judgment in favour of the applicant in the sum of USD44,019,024 as claimed,” the Judge said.

The Judge further said the interest arising from the amount will be determined alongside other unresolved claims.

As way of resolving the matter, Justice Nzioka suggested to the parties to consider a third party intervention to reconcile the accounts and settle the dispute. She said if they fail to agree, the matter will be determined by the court.