Kenya Pipeline Company (KPC) has suffered a major blow after Court of appeal rejected it’s application to temporarily suspend a demand for payment of Sh 4.4 billion to a Lebanese company that constructed the Mombasa-Nairobi pipeline.
Justices Roselyn Nambuye, Wanjiru Karanja and Hannah Okwengu while dismissing the application ruled that KPC failed to convince them that the appeal will be rendered useless, if the payment is not stopped.
“As the execution is in regard to a liquidated amount, there is no way the appeal, if successful will be rendered nugatory,” ruled the judges.
The three judges also said there was uncontroverted evidence that Zakhem International Construction ltd completed the works and handed the pipeline to the state agency.
KPC appealed a ruling delivered by High Court Justice Grace Nzioka who directed the firm to pay the amount within 30 days, even as the parties proceed with the hearing 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 disputed and therefore, I enter judgment in favour of the applicant in the sum of USD44,019,024 as claimed,” the Judge said.
KPC filed an appeal seeking to suspend the execution of the high court decision pending hearing of their intended appeal.
The Judge further said the interest arising from the amount, will be determined alongside other unresolved claims.
As way of resolving the matter, the court 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.
However, KPC rushed to the Court of Appeal arguing that the judge arrived at her decision erroneously. The court also heard that the judge delved into the merits of the case during the hearing of an application and arrived at a wrong conclusion.
Further, KPC said the amount will be paid by taxpayers yet they are not sure of recovering the billions, in case the appeal succeeds, since the company has no known assets in Kenya.
The Judges dismissed the case saying although KPC satisfied on one limb, that the case was arguable, they were not convinced that the appeal would be rendered useless if the appeal succeeds.
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